“Laddering” retirement investment strategy providing a stable income for retirees

Mr. Xavier Chan, the Founder and Managing Partner of CWK Global, and Mr. Ray Lee, Vice-Chairman of Hong Kong Accounting Professionals Association, monthly share their views towards financial planning on “Privilege Vita”

When buying stocks, most people hope to buy at the lowest possible price, but even experienced investors can never be sure when the best opportunity will come. In light of this, many rational investors consider phased buying or monthly stock investment instead, hoping to enter the market at a fair cost.

Most investors focus only on the buying price, but we should take a more comprehensive and long-term approach when planning our retirement. The “exit” time is also a critical factor affecting investment returns. Since retirement means losing a stable salary income for most people, a stable cash flow from the investment portfolio is crucial for retirees.

“Laddering” is one of the methods used by professional institutions to manage bond investment portfolios. It distributes bonds in the investment portfolio evenly among bonds with different maturity dates. Every time a bond matures, the funds recovered will be used for daily expenses or reinvestment. This financial principle provides a concept for retirees to allocate funds to different financial products in their investment portfolios.