Search results for: risk

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Does a perfect policy portfolio exist?

Risk Parity represents a significant advance in asset allocation, but we don’t believe that there is a single perfect policy portfolio. While Risk Parity works well in neutral markets, we don’t think it is the best policy under bearish, bullish or highly bullish market conditions.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing

Finding bond opportunities throughout the business cycle

Global bond markets respond in different ways throughout the business cycle. A flexible strategy can adapt its risk complexion to capture opportunities and mitigate downside.

Tagged with: Fixed Income, Investing

Reducing risk — Absolute return and the pursuit of better diversification

Most investors are familiar with diversification — reducing one’s risk profile (i.e, annual volatility) without affecting return by adding different asset classes or investments to your portfolio. While this is true, the degree of risk reduction benefit depends directly upon the correlation of the portfolio’s assets.

Tagged with: Asset Allocation, Economy, Equities, Fixed Income, Markets

Ghost of crises past

The market’s extended period of low volatility was shattered in the past month. While it is possible fear-driven selling could resume or accelerate, we do not believe this is the most likely outcome.

Tagged with: Economy, Investing, Markets

Credit alternatives in government-backed debt

One way investors may boost yields without taking on undue credit risk is through U.S. government agency debt. While many investors associate U.S. agency debt with very low yields, other types of agency debt can offer significant spreads to Treasuries with a modest decline in liquidity.

Tagged with: Fixed Income, Investing

Constraints of convention — Does a portfolio design have to be static?

A 60/40 portfolio may appear to be balanced, but when viewed through a risk lens it is clear that the equity allocation comprises a disproportionate amount of the risk. As a static strategy, the very thing that has helped risk parity succeed over time may prove to be its biggest liability going forward, and that is all those extra bonds.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing, Markets

In the land of 7 footers, 6’8″ plays guard

The expected real return on most “safe haven” assets is currently negative. Risk seeking behavior could result in a bubble encompassing all risky assets.

Tagged with: Asset Allocation, Economy, Equities, Fixed Income, Global Economy, Investing, U.S. Economy

Take an active approach to selecting your active manager

Be sure the manager takes enough risk. Be sure the manager takes intentional, well-informed risk.

Tagged with: Equities, Investing, Markets
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About Us

Backed by more than 100 years of experience, Columbia Management is one of the nation’s largest asset managers. At the heart of our success and, most importantly, that of our investors, are highly talented industry professionals, brought together by a unique way of working. At Columbia Management, reaching our performance goals matters, and how we reach them matters just as much.