Search results for: diversification

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Reducing risk — Absolute return and the pursuit of better diversification

Most investors are familiar with diversification — reducing one’s risk profile (i.e, annual volatility) without affecting return by adding different asset classes or investments to your portfolio. While this is true, the degree of risk reduction benefit depends directly upon the correlation of the portfolio’s assets.

Tagged with: Asset Allocation, Economy, Equities, Fixed Income, Markets

Holding multiple investments does not ensure better diversification

The degree of risk reduction benefit in diversification depends directly upon the correlation of the portfolio’s assets. Adding just one zero-correlated asset to a portfolio reduces risk 29.5%, while adding a thousand 66%-correlated assets reduces risk by only 19%.

Tagged with: Asset Allocation, Investing

Hungry for income? High yield munis could be your meal ticket

High yield muni bonds represent an attractive investment opportunity. Professional money managers can help with the intricacies of the high yield muni space.

Tagged with: Fixed Income, Investing, Muni Perspectives Blog

Does a perfect policy portfolio exist?

Risk Parity represents a significant advance in asset allocation, but we don’t believe that there is a single perfect policy portfolio. While Risk Parity works well in neutral markets, we don’t think it is the best policy under bearish, bullish or highly bullish market conditions.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing

The Three Pillars of a Resilient Portfolio for Today’s Environment

Many investors are looking to preserve post-crisis gains and bolster the defensive dimension of their portfolios to better withstand volatility. Jeff Knight, Global Head of Investment Solutions and Asset Allocation, supports this approach and explains that three ingredients are essential to constructing a more resilient portfolio for today: diversification, intentional de-risking and explicit hedging of downside risk.

Tagged with: Asset Allocation, Economy, Markets, Portfolio Strategies

3Q 2014 Investment Strategy Outlook

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation, offers an overview of what has been a very straightforward investment year. Seeing gains across all the major asset classes in similar magnitude — in stocks worldwide, in bonds worldwide, credit markets, commodity markets, the market remain optimistic for the balance of the year.

Tagged with: Asset Allocation, Economy, Equities, Fixed Income, Investing, U.S. Economy

Asset allocation: The conundrum of 2014

When economic growth levels off, the headwinds for bonds subside, which fits the patterns of 2014 so far. With bond yields at current levels, the attractiveness of interest rate risk from a valuation standpoint is meager.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing

Q&A with Jeff Knight

Q: What indications did you observe that pointed to the recent market volatility storm? A: In our adaptive risk allocation framework, one of the key first level characterizations we make on markets is whether interest rates are normal or too low.

Tagged with: Asset Allocation, Equities, Fixed Income, Global Economy, Investing

Special report — Commodity markets outlook

In the following Q&A, David Donora, Head of Commodities for Threadneedle Investments, addresses some of the key concerns currently facing investors in commodity markets, and explains his view of the outlook for the market. What is your outlook for commodities for the remainder of 2014?

Tagged with: Global Economy, Investing, Markets
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