Dr. Seddik Meziani Offers Expert Insights on Fixed-Income Investing and CD Laddering for MoneyGeek

Feliciano School of Business professor in the department of Accounting & Finance, Dr. Seddik Meziani, answered a MoneyGeek reporter’s questions on Fixed-Income Investing and CD Laddering. MoneyGeek is a personal finance website providing expert-driven advice to help individuals make informed financial decisions. The reporter has requested that our marketing team share these articles on the Media section of the SBUS faculty page. Dr. Meziani explained that fixed-income investing suits those nearing retirement or seeking stable, low-risk returns, appealing to risk-averse investors focused on security and capital preservation. Evaluating options depends on risk tolerance, time horizon, and income needs, with high-quality bonds offering security but lower yields, and high-yield bonds providing greater returns at increased risk. Tax considerations, such as municipal bonds, can benefit high-income earners. For beginners, Dr. Meziani advised diversifying across bond types, managing interest rate risks through laddering maturities, and monitoring credit quality to balance risk and returns.

On CD laddering, he emphasized that this saving strategy depends on liquidity needs and comfort with locking funds for specific periods. For those with upcoming expenses, locking all funds in long-term CDs may not be ideal; instead, CD laddering offers flexibility through staggered maturities, allowing periodic access to funds while spreading out interest rate risks. CD laddering works best in a rising interest rate environment, enabling investors to lock in higher returns over time without losing liquidity. However, in a rate-cutting phase, shorter-term CDs offer adaptability. New investors should align CD maturities with expected expenses, regularly review their ladder, and balance short-term liquidity with long-term returns for a structured investment approach.”