Perspectives Blog

Building wealth through dividend investing

February 18, 2014

We believe a disciplined dividend strategy that focuses on rising dividends produced by high-quality companies can help investors build wealth over time. Historically,  dividends have been an important component of total return, with the best opportunity for total return in the stocks of high-quality companies that can sustain and grow their dividend over time. Higher quality stocks act to mitigate risk and offer downside protection during time…

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

…ples, share buybacks, an alternative form of capital return to shareholders, are relatively less attractive than dividend increases at the margin. In our opinion these factors support strong dividend growth in the next few years. We believe the drivers that have resulted in historical stock market outperformance from high-yielding equities remain intact. Briefly, valuations of high-yielding stocks benefit from the capital discipline dividends imp…

A less certain world favors high-quality stocks

Philip Dicken, Head of European Equities, Threadneedle International Ltd | October 6, 2014

…d the bond proxies to perform so well this year. We surmised that some of the more domestically-focused European stocks would outperform as the economic recovery became more embedded — a reasonable assumption given what has happened in other developed markets in recovery mode, such as the UK Therefore, we started 2014 with a bias towards higher-quality, domestically focused stocks in areas including financials, transport and leisure, media, and s…

Three investments that could return to favor in 2014

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 16, 2013

…ws The three criteria we look for in identifying an out of favor asset class or investment strategy Why Japanese stocks, EM stocks and active equity strategies may soon be rediscovered When investors lose confidence in an asset class, especially one that had been popular enough to attract outsized allocations, subsequent rebalancing generally leads to prolonged periods of underperformance. Technology stocks after 1999, for example, underperforme…

Should investors care about valuation?

Rich Rosen, Portfolio Manager | November 25, 2013

…s worth Many of the market experts paraded around on the business programs, when asked about their forecast for stocks, often begin with a comment about valuation. But really, how effective is valuation as a gauge for determining whether it is a good time to invest in stocks? What does valuation mean anyway? The most common measure of valuation starts by looking at the market’s P/E, or how much investors are presently willing to pay for one doll…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

…and Internet. In recent weeks there has been a dramatic shift in alpha generation from hyper growth technology stocks to more value-oriented names. We can attribute this to a number of factors: 1) improving economic data means a lower multiple for hyper growth stocks and higher multiples for value/cyclical names; 2) Fed Chair Janet Yellen’s reaffirmation of the taper; 3) geopolitical upheavals; 4) prime brokerage data suggests that hedge funds…

Should your income be fixed?

David King, CFA, Senior Portfolio Manager | December 16, 2013

…many non-fixed, income-oriented security structures which are suitable for investment, including: – Common stocks with safe, stable or rising dividends – Floating rate bonds – Bank loans – Preferred stocks and bonds with interest rate reset features – Master Limited Partnerships Without question, some of these asset classes are more volatile than investment-grade bonds or the like. However, this may be offset by the…