Moneyzine
Contents
/Investment Guides /Bullet Strategy

Bullet Strategy

Moneyzine Editor
Author: 
Moneyzine Editor
1 mins
January 9th, 2024
Advertiser Disclosure
Bullet Strategy

Definition

The term bullet strategy refers to an investment approach involving the purchase of fixed income securities that mature in the same timeframe. The bullet strategy is oftentimes used by investors that need funds on a certain date.

Explanation

The bullet strategy involves the purchase of fixed income securities with similar maturity dates. The term bullet is derived from the relatively narrow focus of the investment portfolio. The approach is frequently used when the investor needs the funds in a certain timeframe. For example, the bonds may be used to pay for a wedding, fund a college education, or pay off a mortgage.

When executing the bullet strategy, the investor will purchase assets over an extended period of time. This allows the investor to take advantage of any opportunities the market presents, as well as diversify their bond portfolio. Since interest rates may fall as assets are accumulated over time, the investor must closely monitor the market.

Related Terms

Harvest Strategy
The term harvest strategy refers to the planned discontinuation of new investments in a line of business or product so the maximum profits can be extracted from it. Harvest strategies are oftentimes used when a product is nearing the end of its lifecycle, or the usefulness of a service is nearly over.
Moneyzine Editor
Moneyzine Editor
January 19th, 2024
Halloween Strategy (Sell in May and Go Away)
The term Halloween strategy refers to the selling of stock before May and not investing in equities again until the end of October. The Halloween strategy is based on a theory that the months of November through April provide investors with stronger capital gains than the remainder of the year.
Moneyzine Editor
Moneyzine Editor
January 19th, 2024
Fixed Income Strategies
The term fixed income strategy refers to several options an investor has when purchasing securities such as bonds. The three primary fixed income strategies include ladders, barbells, and bullets.
Moneyzine Editor
Moneyzine Editor
January 18th, 2024
Exit Strategy (Cashing Out an Investment)
The term exit strategy refers to a process by which an owner plans to withdraw their investment in a business. Exit strategies are important to venture capitalists, since extracting their money from a business allows them to reinvest those funds elsewhere.
Moneyzine Editor
Moneyzine Editor
January 17th, 2024
Event Driven Strategy (Event-Driven Investing)
The term event-driven strategy refers to an investment approach that attempts to exploit pricing inefficiencies that occur after significant corporate announcements. Event-driven strategies are used by large institutional investors when a company notifies the public of plans that will impact their future earnings potential.
Moneyzine Editor
Moneyzine Editor
January 17th, 2024
Bond Ladder Strategy
The term bond ladder refers to an investment strategy involving the purchase of fixed income securities with staggered maturity dates. The bond ladder strategy helps investors to manage interest rate risk and provides them with the opportunity to make a series of reinvestment decisions over time.
Moneyzine Editor
Moneyzine Editor
January 9th, 2024
Barbell Strategy
The term barbell strategy refers to an investment approach involving the purchase of fixed income securities with both long and short term maturities. The barbell strategy typically applies to bonds, and is thought to provide the investor with a portfolio that balances risk and reward.
Moneyzine Editor
Moneyzine Editor
January 8th, 2024

Contributors

Moneyzine 2024. All Rights Reserved.