What is a Bullet Strategy?
The bullet strategy is based on the acquisition of a number of different types of securities over an extended period of time, but with all the securities maturing around the same target date. One of the main benefits of the bullet strategy is that it allows the investor to minimize the impact of fluctuations in the interest rate, while still realizing excellent returns on the investments. Bullet strategies are relatively simple to implement and construct. The first step is to determine at what point on the yield curve the series of investments should mature. This will help lead to the incremental acquisition of additions to the portfolio that will reach maturity on the same target date. Staggering the acquisition dates of the assets means that the risk associated with interest rates is diluted. The investor is able to pick up good deals on various bonds and other securities along the way, arranging the maturities to coincide with the desired final date. One of the advantages of the bul
