What is “laddering”?
Laddering is the technique of regularly buying and selling securities in a portfolio so as to always maintain a constant number of securities as the portfolio moves through time. The theory, for 2 for 1, is that our stocks statistically do better than the market for 2 to 3 years, based on a Rice University study. We keep 30 stocks in the portfolio (30 months = 2 1/2 years). Each month we sell the oldest “at the top of the ladder” and buy a new stock to put “at the bottom of the ladder.” This procedure eliminates the problems associated with trying to time the market and agonizing over when to sell a stock. Top of Page • Why not 3 for 2 splits? The question is, “Why don’t we include stocks that have split 3 for 2 or by some other formula?” We include 2 for 1 and higher splits (such as 3 for 1), but not 3 for 2 or lower. Our procedure is based on one basic consideration. The entire 2 for 1 strategy and procedure relies on David Ikenbery’s Rice University original study and follow-up stud
Laddering is the technique of regularly buying and selling securities in a portfolio so as to always maintain a constant number of securities as the portfolio moves through time. The theory, for 2 for 1, is that our stocks statistically do better than the market for 2 to 3 years, based on a Rice University study. We keep 30 stocks in the portfolio (30 months = 2 1/2 years). Each month we sell the oldest “at the top of the ladder” and buy a new stock to put “at the bottom of the ladder.” This procedure eliminates the problems associated with trying to time the market and agonizing over when to sell a stock. Top of Page • Why not 3 for 2 splits? The question is, “Why don’t we include stocks that have split 3 for 2 or by some other formula?” We include 2 for 1 and higher splits (such as 3 for 1), but not 3 for 2 or lower. Our procedure is based on one basic consideration. The entire 2 for 1 strategy and procedure relies on David Ikenbery’s Rice University original study and follow-up stud
