Hello OP,Just an curiosity question, for people who do duration matching, they might create a collapsing bond ladder. For example, I could create a 30 years bond ladder where each rung equal 1 year and then put the rest in stocks. Is my stock allocation essentially increasing as I age as I consume each rung or am I misunderstanding duration matching.
Duration matching starts with a a combination of long and short term bond funds for an investment horizon. Each has a % allocation that is recalculated each year as the LT fund which initially had the greater allocation is drawn down and the ST allocation % increases after the annual recalculation decreasing the term risk over the investment horizon.
This has nothing to do with stocks in this respect.
Statistics: Posted by rossington — Sat Jun 22, 2024 5:26 am — Replies 17 — Views 1207
