Perspectives Blog

A port in the storm — Short muni funds can offer refuge in the face of rising rates

Catherine Stienstra, Senior Portfolio Manager | October 2, 2014

…ntially stressed market to generate cash to reinvest at higher rates. Source: Columbia Management Advisers, LLC 2. Investing in shorter maturity securities protects from rising rates. As short muni funds typically have an average maturity of three years or less, they are generally less sensitive to changes in interest rates than are longer maturity funds. Looking back 20 years and across various interest rate cycles, the Barclays 1-Year and 3-Ye…

Finding the sweet spot — Value investing along the muni yield curve

Paul Fuchs, CFA, Portfolio Manager, Municipal Bonds | August 27, 2014

…urse of a year, investors can capture 92% of the expected total return available between two and twenty years by investing in a bond that matures in seven years. The seven year area represents the sweet spot on the curve — delivering the maximum amount of incremental total return for investing out an additional year until maturity. The second area in which we see value is in longer-intermediate bonds around twenty years. Our expectation for curve…

Building wealth through dividend investing

February 18, 2014

…cash flow consumed by the dividend. Click here to read an extended analysis: Building wealth through dividend investing *Source: Ned Davis Research, August 2013 Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce or eliminate dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer. The Standard & Poor’s (S&P)…

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

…y Paul Stocking, Senior Portfolio Manager and Dean Ramos, Senior Portfolio Manager With interest rates rising in 2013 and after a number of years of outperformance from high-yield dividend paying equities, investors want to know if dividend investing remains an attractive strategy. With corporate balance sheets looking healthy and dividend payout ratios remaining low by historical standards, we believe dividend growth will continue to be strong….

Investing selectively in Asia

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

Beneath the surface of slowdown headlines lay pockets of exciting growth opportunities. As companies step back from chasing revenue growth and start emphasizing profit delivery, better cash flows and dividend payouts typically follow. We see the greatest contrarian opportunities in sectors where market sentiment has been most depressed. In my previous two articles, I argued that big picture conditions for more sustainable growth are beginning…

Millennials, are you ready to take the next steps?

October 9, 2014

…f dollar cost averaging, a historically successful investment strategy designed to avoid the pitfalls of erratic investing patterns. By automatically investing the same amount of money at a certain time interval (typically once a month), rather than trying to time the market, investors buy more shares when prices are low and fewer shares when prices are high. Keep in mind, this strategy may only work when adhered to for the long term. Consider in…

Does a perfect policy portfolio exist?

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | May 5, 2014

…uring the course of my career as an asset allocation specialist. From the humble beginnings of standard balanced investing (the good old 60/40), investors have searched for the best neutral asset allocation to serve their goals over the long term. Over the last 20 years, we have seen these portfolios broaden as new asset classes are defined (like emerging market equity), or embraced as compatible with mainstream investing (like alternative invest…