I have just been introduced to laddered bonds as a means of financing my mother who is 87. We are having Schwab set up the initial ladder since my mother trust Schwab more than me, I am only a Foolish 62 after all. Has anyone had experience maintaining a ladder once it is set up? We plan to invest in high grade Corporates because of the higher yield. I can't seem to get that much current data from either the WSJ or IBD and I have tried a few web sites but nothing really seems to provide me with what I think I need. Any suggestions out there?
Let's say you want to do a 5-year ladder and have $50000 available. You put $10000 in a bond that matures in 1 year (1 year Treasury bill would be fine); $10000 in one that matures in 2 years (2 year Treasury note also fine), $10000 in one that matures in 3 years (can get on secondary market or purchase from broker) $10000 in one for four years and the last $10000 in one for five years. Your mother then collects the interest, and every year a bond matures. You take the principal from the matured bond and buy another 5 year bond. You may also select bonds that pay their interest in different months, to provide income for every month. This would require 6 rungs on the ladder... Any more specific questions? Regards, Chris
Chris,I am interested in buying some corporate bonds in my IRA account I have with Vanguard. When I called, they said I needed to do my own research, and then direct them to purchase specific bonds. Is there a good source for specific bond information? I looked at the WSJ but they don't seem to have much. I heard the NYSE trades a lot of corporates, but could not find information on their site. So where do you get info?Thanks in advance.
<<I am interested in buying some corporate bonds in my IRA account I have with Vanguard. When I called, they said I needed to do my own research, and then direct them to purchase specific bonds. >>I understand that Merrill Lynch has some of the best products with laddered bonds.
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