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LADDER APPROACH TO GIC INVESTING
- spread out maturity dates of investments
- only portion of investment due each year only that portion
reinvested
- if interest rates decrease only reinvested portion will suffer
- passive investment strategy - involves establishing and maintaining
series of fixed income investments
- term usually 5-10 years
EFFECT: average rate of return over time of holding period
= weighted average investment rate paid for term of ladder
This material is for information purposes only and should not
be construed as legal or tax advice. Every effort has been made
to ensure its accuracy, but errors and omissions are possible.
Individual circumstances may vary and specific legal and tax advice
is recommended. Future tax changes and market conditions may affect
this information.
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