bones1 wrote: Why are the real yields so low? I can understand the low yields in nominal bonds, but what's driving the price for RRBs?
bones1 wrote: I'd really like to buy them with a yield closer to 2%.
ghariton wrote:Last time I bought any was at the end of 2008, when the real yield rose to 2.4%, as I recall. Perhaps similar bargains will be available during the next financial crisis.
squid wrote:So was this because investors didn't expect real growth in the economy, so the difference in yield between the types of bond narrowed?
newguy wrote:squid wrote:So was this because investors didn't expect real growth in the economy, so the difference in yield between the types of bond narrowed?
Or people were selling whatever they had that was still worth something.
The prices seem a bit high, and may represent the ask.
northbeach wrote:1.232% yield does sound all that bad given current GIC rates. Afterall, I get 1.232% plus the inflation rate on an increasing yearly principal amount (if there is inflation).
I need to buy a GIC and am trying to figure out if I should add to my RRBs (something I have been wanting to do, but low rates have stopped me) or take out a 5 year GIC.
I know that it is difficult to compare RRBs to short term GICs, but does anybody have any suggestions for me.
Why not a provincial strip? A quick scan of my discounter has a 10 yr. Prov. of BC strip with a YTM of 3.949% on $10K of face.
AFAIK the indexing is not capped.I believe indexing is capped at something like 6%.
Shakespeare wrote:AFAIK the indexing is not capped.I believe indexing is capped at something like 6%.
Correct. Federsl pensions are not capped.
bones1 wrote:But in any case, they will be capped at some point. Trudeau did it, and if a left-wing socialist like he would do it, so will any prime minister in times of high inflation and high debt.
Taxpayers (and thus voters) will have little desire to fund a high lifestyle of retired public servants, when it's clearly an insane perk compared to non-government workers.
You can get a "reduced allowance" at 50, which works out to be 50%. I was told that technically it wasn't a pension, but it still qualifies for the pension tax exemption.to no longer allow retirement on an immediate pension at 55
Shakespeare wrote: I was told that technically it wasn't a pension, but it still qualifies for the pension tax exemption.