Bullet Strategy Definition

Forex Glossary

Definition

The word bullet plan identifies to a investment approach between buying fixed income securities which grow in precisely the exact same period. The bullet plan is popularly utilized by shareholders who desire funds on a particular date.

Explanation

The bullet plan includes the purchase of fixed income securities with similar maturity dates. The expression bullet comes from the relatively narrow focus on their investment portfolio. The strategy is often used while the investor requires the capital in a particular period. By way of instance, the bonds could be utilized to cover a marriage, finance a college education, or repay a mortgage.

When implementing the bullet plan, the buyer will purchase assets within a protracted time period. This permits the investor to make the most of some opportunities the market gifts, in addition to increase their bond site. Since interest rates can collapse because resources have been collected overtime, the investor needs to closely track the marketplace.