Laddering for higher, more stable returns  By Philip Brewer on
11 April 2008 (Updated 14 April 2008) 1 comment Photo: Philip
Brewer  When investing in things that pay an interest rate--
things like CDs and bonds--it's tempting to try to get the
maximum interest rate, and then to try to lock up that rate for
as long as possible.  There's an alternate strategy that
provides good, stable returns with a lot less stress and a lot
less need for predicting the future:  Laddering.  There are two
downsides to locking in a rate:    • First, it might not turn
out to be a great rate.  You could have locked in a record-high
9% in 1979, only to have rates move higher and stay higher--they
wouldn't get that low again until 1986.   • Second, even if
turns out to be a great rate, eventually your bond matures, and
then you have to reinvest at whatever rates are then.  Just a
couple years later, in 1981, you could have locked in 14.5% for
30 years.  That did turn out to be a great rate, but those bonds
are going to mature in thr