Iamfaith

Flooding with light

[Iamfaith @AmjustFaith]

Will 'the Sentinel' ever get a remake?

[Iamfaith @AmjustFaith]

My favorite pastime these days is spotting forced trending topics and blocking government bloggers #iposiku

[Crystal Asige @CrystalAsige]

You will never convince our generation that you can ever be trusted, ever again. When young people marched patriotically, wearing Kenyan flags on their backs and raising their voices, you responded with bullets and death. And NOW you have supposedly ‘heard’ and want dialogue? For 20 months you have been speaking, it’s our time now.

No more commissions of enquiry, no more multisectoral taskforces, no more reports, no more diverting our attention. If you have heard us, then no more talking—just act. We want to wake up in the morning with budget allocations reworked, with the Appropriations Bill overhauled, your MPs sacked, your Cabinet Secretaries sacked, the wheels of Constitutional amendments to begin turning, and your resignation on Gen-Z's desk for them to decide whether to accept.

This will go down in history, and we are no longer in an era where history can be manipulated. #RutoMustGo

[Imani Music @IamImani_ftcoc]

Shepherd of my soul I give You full control
Wherever You may lead I will follow
I have made the choice to listen to Your voice
Wherever You may lead I will go🎵

#ftcoC #ForTheCauseOfChrist

[Iamfaith @AmjustFaith]

I had my first hearbreak 11 years and a day ago... So 11 years ago i sat in the house waited for the Beat at 5 p.m to play 'Boyz II Men ft Charlie Wilson- More than you'll ever know' and proceeded to cry my heart out...

#HappyHeartbreakAnniversary
💙
#CanItellyouaStory

[Imani Music @IamImani_ftcoc]

LORD We Lift Up Your Name,
With our Heart Full of Praise,
Be Exalted Oh Lord My God
Hosannah In The Highest 🙌🤍
#ftcoc
#MondayWorship

[Iamfaith @AmjustFaith]

A few hours to my birthday and I am grateful.

@IamImani_ftcoc was birthed through prayer.. I really am Imani(Faith).

I cannot wait to behold what the Lord has in store for me this new year.

Your faithfulness never ceases🎶🙌

[Gichuki Kahome @kahome_steve]

That's it on bond laddering.

The bond ladder strategy is mostly used by risk averse investors looking for income over growth.

If you found this thread useful:

1. Follow me @kahome_steve for more amazing threads.

2. Retweet the first tweet so that other people may see it.

[Gichuki Kahome @kahome_steve]

What are the cons of this strategy?

1. It requires a higher amount of capital to make a bond ladder.

This is because you are buying a series of bonds.

2. Varying interest rates. Sometimes you will buy bonds when the returns are low, and this will lower the average returns.

[Gichuki Kahome @kahome_steve]

4. Manage inflation risk.

During times of high inflation, bonds tend to fetch higher returns.

Investors demand for higher interest rates from the CBK

Having a bond maturing every year, gives you the opportunity to grab bonds with higher returns.

[Gichuki Kahome @kahome_steve]

3. Manage interest rate risk.

By staggering maturity dates, you avoid getting locked into a single interest rate.

The bond ladder strategy is mostly used by risk averse investors looking for income over growth.

[Gichuki Kahome @kahome_steve]

2. Adds liquidity to your bond portfolio.

Bonds by their nature are illiquid. They can't be cashed out any time without penalties.

By buying a series of bonds with different dates of maturity, the investor guarantees that some cash is available within a short time frame.

[Gichuki Kahome @kahome_steve]

What are the pros of this strategy:
1. Manage Cash flow.

Since most bonds pay interest twice a year on dates that coincide with their maturity date,

Investors can structure predictable monthly bond income based on coupon payments with different maturity months and years.

[Gichuki Kahome @kahome_steve]

Assuming an average return rate of 12% and a tax of 15% on returns:

Each bond will pay you Sh 17K per year

The entire bond series will pay you sh 102K per year

And if you spread the bonds in different months, you will receive sh 8,500 per month in interest.

[Gichuki Kahome @kahome_steve]

If you buy the bonds on different months, and spread them in a series of 6 bonds, you will get paid interest every month of the year.

This is because interest in a single bond is paid out twice a year.

[Gichuki Kahome @kahome_steve]

You will have a bond maturing every year, paying you the interest and returning back your initial investment.

You can then use that to buy another bond to build the next step in your ladder.

That means you will buy another bond in 2024 with a maturity date of 6 years (2030)

[Gichuki Kahome @kahome_steve]

166K in a bond maturing 2 years from now (2025)
166K in a bond maturing 3 years from now ( 2026)
166K in a bond maturing 4 years from now (2027)
166K in a bond maturing 5 years from now (2028)
166K in a bond maturing 6 years from now (2029)

[Gichuki Kahome @kahome_steve]

Here's an example of a bond ladder:

Let's say you have sh 1 Million to invest in bonds.

Instead of putting the entire amount in a single bond, you put the money in a series of 6 bonds as follows:

166K in a bond maturing: 1 year from now (2024)

[Gichuki Kahome @kahome_steve]

3. Height of the Ladder
The longer the ladder, the higher the average return since bond yields generally increase with time.

The longer the maturity date of a bond, the higher the yield and vice versa.

[Gichuki Kahome @kahome_steve]

2. Spacing

The distance between rungs is determined by the span of time between the maturity dates of the different bonds.

This can range from months to years but the spacing should be almost equal.