Perspectives Blog

December 2013 Archive

Asset allocation November 2013

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 12, 2013

Changes over previous allocations: 1. Remain modestly overweight equities, expect equities to outperform bonds; Central Banks remain accommodative. Leading indicators are improving, suggesting better global growth ahead. Expect cash and fixed income to underperform; continue to favor absolute return strategies. 2. Remain underweight U.S. equity allocations mainly on relative valuation (limited near-term upside). Better opportunities

Obamacare’s insurance exchanges

Columbia Management, Investment Team | December 9, 2013

Enrollment is low There is still confusion around plans Where do we go from here? Healthcare.gov’s performance has improved since its re-launch last week, but capacity and communications problems will persist. Through October, the reported number of enrollees in federal and state-run health insurance exchanges remains meaningfully below initial targets. The federal government is running

Correlation’s essential role in diversification

Columbia Management, Investment Team | December 5, 2013

Diversification strategies can help mitigate overall portfolio volatility. An important component of diversification strategies is correlation, or the measure of how one security moves in relation to another. Portfolios with lower correlation among assets will experience less overall volatility, even if the underlying assets are equally volatile individually. Most investors have heard about the concept

Gifting strategies with 529 plans

Columbia Management, Investment Team | December 3, 2013

529 college savings plans allow parents and relatives to implement advanced gifting strategies. Contributions can be prorated over five years without incurring federal gift tax consequences. With a 529 plan the account owner maintains control of the assets in the account even though contributions are considered completed gifts. Parents and relatives can benefit from advanced