Perspectives Blog

A question for Jackson Hole

Zach Pandl, Portfolio Manager and Strategist | August 20, 2014

Fed officials have highlighted underemployment but offered little guidance about how this issue affects the policy outlook. Traditional tools like the Taylor Rule need to be recalibrated if the central bank focuses on a different measure of slack, so they offer little guidance to investors at the moment. We hope to learn more at this week’s Jackson Hole conference. A consensus among Fed officials holds that the standard U3 unemployment rate—no…

Are municipal bond rating agencies shifting the goalposts (again)?

Columbia Management Municipal Investment Team, | September 30, 2013

…encies’ weighting of credit fundamentals. Given public rating and subsequent price volatility, thorough and independent credit research has become critically important for municipal bond investors. By Ty Schoback and Michael Taylor, Senior Analysts, Tax-Exempt Fixed-Income Research It has been just over three years since Moody’s and Fitch Ratings upgraded en masse, or “recalibrated,” tens of thousands of state and local government general obliga…

Puerto Rico’s double-downgrade

Michael Taylor, Senior Municipal Analyst | February 10, 2014

What’s behind the downgrade of Puerto Rico’s credit ratings by Standard & Poor’s and Moody’s? The double-downgrade puts pressure on Puerto Rico to shore up its finances in the coming weeks A future default or debt restructuring could rattle investor confidence and impact all municipal market issuers On February 4, Standard & Poor’s lowered its long-term credit rating on the Commonwealth of Puerto Rico’s (PR) general obligat…

Labor markets in the new digital age

Columbia Management, Investment Team | April 14, 2014

…Company consultants believe future productivity gains will significantly disrupt clerical and professional service jobs. Exhibit 1 Source: The Future of Employment: How Susceptible Are Jobs to Computerisation?, Carl Frey and Michael Osborne, September 2013 The rewards of this innovation fall disproportionately to business at first, as capital is substituted for labor particularly in low and middle-skill industries. In the last few decades, labor…

U.S. rates – Headwinds

Zach Pandl, Portfolio Manager and Strategist | March 17, 2014

…it standards, household balance sheet stress and capital market regulation (financial headwinds could be thought of as affecting the output gap directly or as impairing the transmission mechanism). Simple benchmarks like the Taylor Rule only consider the size of the output gap (and inflation gap) to determine the stance of policy. But what does it mean to say that monetary policy is “easy” if factors outside the Fed’s control prevent the output…

Building wealth through dividend investing

February 18, 2014

…h-quality companies that can sustain and grow their dividend over time. Higher quality stocks act to mitigate risk and offer downside protection during times of market stress. By Scott L. Davis, Senior Portfolio Manager, and Michael S. Barclay, CFA, Senior Portfolio Manager How can investors build wealth over time and consistently grow income in a relatively low risk equity strategy? We believe a disciplined dividend strategy that focuses on ris…

The case for active bond management

Carl Pappo, Head of Core Fixed Income | August 25, 2014

There have been instances where the passive approach to bond investing produced significant underperformance relative to a benchmark. Index funds are at a significant disadvantage to active portfolios in which managers incorporate valuation into their decision making process. The many nuances and inefficiencies of the fixed income market create both difficulties for indexing and opportunities for active management. Co-authored by Michael W. Za…