Immunization is a risk-mitigation strategy that matches asset and liability duration so portfolio values are protected against interest rate changes. In other words, it's a way to protect your investments from the ups and downs of the market. And that's a good thing! After all, who wants to see their hard-earned money disappear when the market takes a turn for the worse?But there's another side to this coin. While immunization can help shield your portfolio from losses, it can also limit your potential gains. That's because you're essentially locking in current interest rates, which may be lower than what you could earn in the future if rates rise.So, like everything else in investing, there are pros and cons to immunization. It's up to you to decide whether the benefits outweigh the risks in your particular situation. But one thing is for sure: with immunization, you can rest easy knowing that your portfolio is at least partially shielded from Interest rate fluctuations.
