Bullet strategy is a strategy in which a portfolio is constructed so that the maturities of its securities are highly concentrated at one point on the yield curve.
The bullet strategy is based on the acquisition of a number of different types of securities over an extended period of time, but with all the securities maturing around the same target date. One of the main benefits of the bullet strategy is that it allows the investor to minimize the impact of fluctuations in the interest rate, while still realizing excellent returns on the investments.
This is useful when you know that you will need the proceeds from the bonds at a specific time, such as when a child begins college.
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