Perspectives Blog

Time, not timing

Columbia Management, Investment Team | November 26, 2013

Historically, some of the worst short-term market fluctuations and losses were followed by periods of substantial market recovery. Investors who try to time market swings often end up missing out on the market’s best days. Asset allocation, diversification and periodic rebalancing are tools investors can use to help weather market downturns. Sometimes the best selling strategy for investors may simply be — don’t. Focus on buy and hold for the…

Interpreting the bond rally from a multi-asset perspective

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | June 2, 2014

A framework for identifying capital market states can help set expectations for markets in the aftermath of the recent bond rally. Our framework suggests a highly bullish market state for equities although that market state would shift to bearish if conditions became more neutral. While we expect ongoing strength in equities (which should pressure bond markets and drive yields higher), the durability of strong performance in risk asset markets…

Labor market takes center stage

Zach Pandl, Portfolio Manager and Strategist | October 15, 2013

Labor market issues have long taken a central role in Janet Yellen’s career. Remarks indicate Yellen views current labor market challenges as potentially very costly for the economy, and she sees a role for monetary policy in promoting recovery. Yellen’s nomination likely raises the bar for Fed tightening, as long as inflation remains low. When it comes to the current priorities for monetary policy, investors already know where Janet Yellen st…

From tactical to core – The case for emerging market debt

Columbia Management, Investment Team | June 2, 2014

For many investors, emerging market debt could be viewed as a core-portfolio holding rather than a short-term tactical investment. 2013’s re-pricing created value in terms of higher yields, a more dedicated investor base and a better relative value argument. Flexibility across the full spectrum of EMD investment opportunities is extremely important, as emerging markets are not homogenous. By Patrick McConnell, Director, Fixed Income Product Ma…

Detroit’s collateral damage

Ty Schoback, Senior Municipal Analyst | October 24, 2013

The State of Michigan’s failure to preserve the integrity of the General Obligation (GO) pledge in Detroit has greatly undermined the market’s confidence in debt issued within Michigan. It has also resulted in increased borrowing costs for other Michigan entities. The State communicated to investors the UTGO security pledge of local governments should not be considered any stronger than a basic appropriation or lease, raising significant concer…

Sweeping money market fund reforms adopted by SEC

John McColley, Portfolio Manager, Liquidity Strategies | July 28, 2014

In a split vote, the SEC adopted sweeping reforms to Rule 2a-7 which governs the operation of money market funds. Many funds that were previously considered retail due to their lower investment minimums will now be called institutional and fall under the new regulations. No immediate changes need to occur and we will proceed with careful anticipation and as always capital preservation remains our number one goal. On July 23, the SEC voted 3-2…

Yellen at Jackson Hole

Zach Pandl, Portfolio Manager and Strategist | August 25, 2014

At last week’s Jackson Hole Symposium Janet Yellen was not the dove we thought we knew. Balanced remarks on labor market and cumulative progress toward recovery put her views close to center of FOMC. We see this as further confirmation that Fed leadership is increasingly comfortable with moving toward an exit from zero interest rates—likely by June 2015 or a bit sooner. I must have heard it on the radio recently, because Janet Yellen’s speech…