I feel comfortable in my understanding of how RRBs are structured, what I lack is experience investing in them. I am interested in adding RRBs to my RRSP, but they seem expensive to me at the moment.
I plan holding to maturity, but I'm wondering if it is financially wise to invest today (Aug 13, 2009) given what seems to me to be an expensive proposition with a low yield. Any advice welcome. Obtained this data from BMO:
Par value $10000 (purchase price ~$17,785)
Maturity date December 1, 2026
Coupon yield 4.2500%
Real Yield Semi 1.818%
Real Yield Annual 1.826%
Current market price $177.8570
Real price $135.9390
Index ratio 1.30835 (Aug 17 settlement)
Accrued interest factor 1.173
Inflation Break Even 2.19
I plan holding to maturity, but I'm wondering if it is financially wise to invest today (Aug 13, 2009) given what seems to me to be an expensive proposition with a low yield. Any advice welcome. Obtained this data from BMO:
Par value $10000 (purchase price ~$17,785)
Maturity date December 1, 2026
Coupon yield 4.2500%
Real Yield Semi 1.818%
Real Yield Annual 1.826%
Current market price $177.8570
Real price $135.9390
Index ratio 1.30835 (Aug 17 settlement)
Accrued interest factor 1.173
Inflation Break Even 2.19