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What is The Barbell Strategy?

Definition of The Barbell Strategy

The barbell approach means investing in only very short terms assets (bonds mainly), which give you interest immediately, thus helping with immediate cash flow and returns; and the longest-dated assets (bonds, usually 30 year old is the benchmark of top-rated government bonds, i.e. U.S. Treasury bills, which is the global standard benchmark bond), which allows you to benefit from the highest interest rates available. The shorter-dated bonds, though, still need to offer sufficient return to compensate for the Time Value of Money. The Time Value of Money is a concept that goes to the very heart of investment and means that a pound today is worth more than a pound in a year, because a pound now can be invested for a year (or whatever future time period you're talking about), so that in a year for the one pound invested today you will have, say one pound + 10 p (the interest accrued over the year).
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