Why Buy Bonds?

Stocks – Inflation

Bonds -- Recession

SIR Chuck McCoyBranch 174

July 18, 2013

Bond Ladders

Help you keep track of your bonds and space out maturities

Where Do I Start?

• Microsoft Excel is an easy program to get a ladder going

• Adjust row height and column width to fit the kind of table you want.

What’s A Ladder?

• A tabulation of bonds you own which can help you avoid two common problems:

• All of your bonds mature at once so you have a potful to reinvest at the wrong time

• You have been too conservative or too liberal in bond buying so that your risk/reward ratio is cattywampus.

Start with a Blank Excel Worksheet

Year Broker "A" "B" $ Broker "C" "D" $ Total $2013 1st2013 2nd2014 1st2014 2nd20152016201720182019202020212022-232024-252026-292030+

MUNICIPALTAXABLE

Typical Bond Ladder Maturity

Mr. Smith bought some Bonds; here is his handsome portfolio

Taxable (Corporate) Bonds:15 Atlantic Richfield 9-7/8 3/1/16 A- Non-callable (NC) Schwab 10 Coca cola Ent 8/1/17 AA- NC Wellstrade20 PPG Inds 6-5/8 3/15/18 BB+ Call 3/15/14 @ 100 Schwab10 Anheuser Busch 3/1/19 A- Call 3/1/14 @ 100 Schwab10 IBM Deb 11/1/19 A+ NC Wellstrade20 Sprint Cap 5/1/19 B+ Call 5/1/14 @ 100 Wellstrade

“Tax-Free” Muni30 Escondido HS Zero 11/1/17 BBB NC Ameritrade15 Stockton Pub Finance 4.0 8/1/18 A- Call 81/14 @ 100 Ameritrade10 Berkeley Bldgs 5.0 8/1/19 AA NC Fidelity10 LA Unif Sch Dist 4.5 12/1/22 AA- Call 7/1/17 @ 100 Fidelity20 Roseville Elec 5.25 2/1/23 A- Call 2/1/19 @ 100 Fidelity10 Bay Area Toll Auth 5.0 4/1/20 AA Call 4/1/19 @ 100 Ameritrade

Year Schwab Wellstrade $ Ameritrade Fidelity $ Total $2013 1st2013 2nd 50

2014 1st (20) + (10) (20) (15) 15

2014 2nd20152016 15 15

2017 10 30 (10) 50

20182019 10 (10) 10 + (20) 50

202020212022-232024-25

() - CallAll "Callable" are Called

MUNICIPALTAXABLE

Mr. Smith’s Ladder Maturity

Quality Schwab Wellstrade $ Ameritrade Fidelity $ Total $AAAAA+AA 10 10 20

AA- 10 10 20

A+ 10 10

AAA- 15 + 10 15 20 60

BBB+BBB 30 30

BBB-BB 20 20

B 20 20

CCCCC/C

MUNICIPALTAXABLE

Mr. Smith’s Ladder Quality