What is a barbell strategy?

When applied to fixed income investing, the barbell strategy advises pairing short term bonds with long-term bonds. The result gives the investor a cushion of long-term bonds in case yields fall, and a chance to do better if short-term yields rise. In practice, the barbell strategy is more frequently applied to bond portfolios.

How do you choose a barbell strategy?

For example, a conservative investor would choose to invest in low-risk assets that are unlikely to lose any money. But an aggressive investor would choose to invest in assets that have high potential rewards. The barbell strategy focuses on investing in both high-risk and no-risk assets.

What is a barbell investing strategy?

What Is the Barbell Investing Strategy? The barbell strategy is an investing strategy that aims to find a balance between risk and reward by investing in high-risk and low-risk assets while eschewing more middle-risk options. The barbell investing strategy is commonly used for fixed-income investing, but can also be used in equity markets.