Maturity (and we don't mean behaving like a grown-up) There are lots of different bonds available -- some issued by local, federal or state government; others by corporations. Whoever the issuer, a key point you need to consider is "maturity."				> Home > Glossary > Support
		When you buy a bond, you are loaning a sum of money to the issuer in return for regular interest payments. At the end of the road, the issuer pays back the amount you invested (your principal).
		A bond's maturity date is the date at which the bond issuer is scheduled to pay back your principal. Short-term bonds generally mature in up to three years. Intermediate-term bonds generally mature in three to seven years. Long-term bonds mature in more than seven years. Generally the upper limit is 30 years.
		Longer-term = Riskier Since a long-term bond locks your money up for a longer time, there is more chance of interest rates changing while your money is in the bond.
		If rates go up, you're stuck with a bond that pays below-market interest. If you try to sell it, you'll probably lose money because you'll get back less than the face value. This is why longer-term bonds are considered riskier than short-term ones, and they tend to pay higher interest rates in order to attract investors, and reward them for this additional risk.
		If rates drop, however, you'll suddenly find yourself in the enviable position of earning above-market rates. But your satisfaction could be short-lived, if the issuer is allowed to "call" in the bond.
		One strategy for diversifying a bond portfolio would be to stagger, or "ladder" the maturities so that you have bonds maturing at different times, on a regular basis. This makes it more likely that you will be able to take advantage of high interest rates when they come along, because you will likely have money available to reinvest.

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