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Discussion Starter #1
I want to dissolve some of my mutual funds in my RIF and create a five year bond ladder. I am not that familiar with bonds ie which ones to select etc. and would welcome your help. Thanks.
 

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Discussion Starter #3
bond ladder

Thanks for the sources. The ladder with the financials and industrials looks good to me. I suppose the returns would be better in a longer term 'package' Do you think I would be better to select individual bonds for my ladder rather than the group used in the 'cbo' ladder ? Thanks again for your help.
 

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Do you think I would be better to select individual bonds for my ladder rather than the group used in the 'cbo' ladder ?
If you can evaluate and select individual bonds then sure go for it.
Building your own bond ladder is always better than a bond fund because you know exactly what you will get at the end of each term.
However, it requires you to evaluate and select individual bonds.
The trouble I find with that is (a) brokerage spreads on bonds and (b) very limited and pitiful selection of bonds at most discount brokerages.
Most of the good, large issues never make it to discount brokerages or make it after many weeks/months.
Then there are spreads that eat into your YTM.
 

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There is actually a much wider selection out there on the market than what is advertised by your broker. You can pretty much buy any bond issue, but the spread might be wider since your broker might not have it in inventory and would have to buy it off another bondholder.

That being said, if you are building your own bond ladder, the spreads don't matter as much since you are probably going to hold to maturity. Which bonds you select for your ladder is going to depend on your risk profile.
 

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Discussion Starter #7
Thanks again for the input. Could I ask a question about strip bonds? Example : Telus Corp . offers a strip, maturing April15/2015 for $82.77 yielding 3.69%. What are the cost/yield variables if a person sells this bond prior to maturity ? I appreciate your help.
 

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Thanks again for the input. Could I ask a question about strip bonds? Example : Telus Corp . offers a strip, maturing April15/2015 for $82.77 yielding 3.69%. What are the cost/yield variables if a person sells this bond prior to maturity ?
Strips are easier to evaluate than regular bonds because there are no coupons and no re-investment risk.
So the only thing is the spreads that'll eat into your returns.
Both when buying and selling.
 

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There is actually a much wider selection out there on the market than what is advertised by your broker. You can pretty much buy any bond issue
Is there a particular source or website where you view all available or open issues?
I know about canadianfixedincome.ca but their listing doesn't seem exhaustive.
 
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