Investors have choices to make when investing in bonds.

One of those choices is the maturity date of their bonds and or bond portfolio.

We can buy short-term bonds, long-term bonds, and or everything in between.

Not all that different than buying a bank CD.

We can buy a short-term six-month CD.

We can buy a longer-term five-year CD.

Or we can create a diversified portfolio of CDs to

arrive at our target maturity date. Short-term bonds, just like short-term CDs, typically pay a lower

interest rate than long-term. And that's because all else being equal, short-term bonds are

less risky than long-term bonds. Interest rates fluctuate

daily, and it's hard to know if buying a long-term bond today will appear to be just as

attractive to us in the future when the interest rate environment might look dramatically

different. As a reminder, when you buy a bond, you are loaning your money to someone else,

either a corporation, a municipality,aning your money to someone else, either a corporation,

a municipality, or the government. In return, they're paying you interest on your loan,

just like you would pay interest on money that you borrow from someone else. So if you want to

commit to taking more risk and loaning your money to them for a longer period of time,

those entities will typically compensate

you for that risk and pay you a higher interest rate. But right now, that's not what's happening.

Right now, the yield on a AAA rated three-month U.S. Treasury bond is about 5%. On the other hand,

the yield on a 10-year U.S. treasury bond is about

3.5%. In other words, you are getting paid a lower interest rate for taking more risk, the

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