Climbing the Ladder

As interest rates hover around all-timelows, cash-strapped investors arefinding it hard to squeeze extra yieldout of their fixed-income investments.Short-term bonds offer paltryinterest rates, and while long-termbonds pay better, they carry the riskthat bonds will lose value as interestrates go up. The answer, some bondmavens say, is to ladder your investments.Put equal amounts of your portfoliointo bonds with a variety of maturities,ranging from 2 to 10 years. Asthe short-term bonds mature, invest theproceeds in 10-year bonds. Eventually,you'll have a portfolio of 10-year bondspaying top yields. With the bonds' staggeredmaturities, it's less likely you'llsell bonds at fire-sale prices if you needto raise cash.