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

…g the period from 1948-1960 when rates nearly doubled to 4%. With rising rates not expected to be a barrier to strong performance of high dividend equities, what about the prospects for dividend growth? The potential of stock dividends to grow with earnings provides a meaningful benefit when using high-yielding equities as a source of income in a portfolio. Unlike bonds where income is fixed, stock dividends can provide a measure of inflation pro…

Three reasons why REITs can continue to rally

Arthur Hurley, CFA, Senior Portfolio Manager | May 19, 2014

REITs have produced attractive returns YTD being up 13.60% through April (up 16% as of May 12) Fundamentals remain solid, demand for commercial real estate remains strong and companies continue to increase dividends. We remain positive on REITs given the relative safety of their income stream and continued prospects for growth. The REIT market shook off the cold of the “polar vortex” with both solid share price performance and continued positi…

The new tax regime and stock compensation

Abram Claude, Vice President, Columbia Management Learning Center | October 30, 2013

…rket value upon the vesting date; $12 x 100 = $1,200 in compensation. Second, the recipient has ownership rights at the time of the grant, which includes receiving dividend payments even when those shares have not yet vested. Dividends received before vesting are treated as wage income and taxed as ordinary income. Note: The 60-day holding period required for qualified dividends does not begin until the vesting date unless the recipient made an 8…

The role of asset location

Abram Claude, Vice President, Columbia Management Learning Center | October 23, 2013

…ent income — two of the components investors use under the new 3.8% tax regime to determine their exposure. Or consider the income from dividend-paying stocks, which often qualifies for qualified dividend treatment. Qualified dividends are taxed at the corresponding general long-term capital gains rate that would apply to the realization of long-term capital gains on the sale of the security. For investors over the 15% income tax bracket, but bel…

Finding the sweet spots in corporate spending

Robert McConnaughey, Director of Global Research | February 24, 2014

Investors could find opportunity in capital expenditures. Strategic positioning in these areas is key to opportunity. Shale gas and automation are leading the charge in innovation. Cash balances at U.S. non-financials corporations have exploded in the post-crisis era, up 75% since the end of 2007. This is despite a rising return of cash to shareholders in the form of dividends and share repurchases. However, capital expenditures and reinvestme…

Investing selectively in Asia

Soo Nam Ng, Head of Asian Equities | July 14, 2014

…of Hong Kong, Singapore and Australia where corporate cultures are more shareholder-friendly. But to appreciate their investment merits, the investor needs to value resilient growth over high growth and be willing to harvest dividends over a multi-year horizon. While return expectations from potential share price appreciation may need to be moderated, the investor should consider a more deliberate harvesting of dividends as an equally important…