Perspectives Blog

Building wealth through dividend investing

February 18, 2014

…ctable capital appreciation for the cash return on an investment. And, historically, dividends have been an important component of total return, accounting for 42% of total return on average since the 1920s.* Keys to dividend investing Dividend growth. Rather than focusing on yield, the best opportunity for total return resides with the stocks of high-quality companies that can sustain and grow their dividend over time (Exhibit 1). Free cash flo…

Casting a wider net for income

Columbia Management, Investment Team | May 28, 2013

…urces has undoubtedly expanded. One of the most compelling sources of income currently is on the balance sheets of cash-rich corporations. To help get the income you need, tap into the strong balance sheets of corporations by investing across the full spectrum of the corporate capital structure. Investing across the corporate capital structure Take a new approach to income investing Not all income investments are the same. Floating rate loans,…

Time for a change

Columbia Management, Investment Team | July 23, 2013

The end of a long bull market for bonds means investors need to redefine how they generate income. In an environment of heightened risk, professional expertise can help investors avoid emotion-driven mistakes. Investors should consider including non-traditional investments in a broadly diversified portfolio. The end of the bull market for bonds means the way that many people have been investing — with a heavy concentration in traditional bond…

Opportunity in lower-quality municipals

Columbia Management, Investment Team | August 15, 2013

…nt-grade municipal bonds may provide similar yields as longer maturity bonds, but with lower interest-rate risk and volatility. Independent and well-resourced credit research is a critical tool in lower-quality municipal bond investing. Among fixed-income and equity asset classes, municipal bonds have proven resilient and reliable investments over the long term. Risk-adjusted performance — strong returns with relatively low volatility — and the…

Duration for diversification

Columbia Management, Investment Team | November 19, 2013

…eturn but invest across asset classes for diversification. Diversification is still one of the most fascinating ideas of financial economics: one portfolio can have the same risk but higher total return than another simply by investing in different markets. This basic principle should guide decisions about an issue many investors are struggling with today: the appropriate amount of bond duration in an environment of rising interest rates. For bon…

The world has gone global. Have you?

Paul Berlinguet, Vice President, Equity Products | May 21, 2013

…ights from Columbia Management. *Source: Barron’s Emerging Markets Daily, January 17, 2013. Equities are affected by stock market fluctuations that occur in response to economic and business developments. International investing involves increased risk and volatility due to potential political and economic instability, currency fluctuations, and differences in financial reporting and accounting standards and oversight. Risks are particular…

Correlation’s essential role in diversification

Columbia Management, Investment Team | December 5, 2013

…ss overall volatility, even if the underlying assets are equally volatile individually. Most investors have heard about the concept of diversification, the typical expression being “Don’t put all your eggs in one basket.” By investing across multiple asset classes, you can help smooth out your portfolio’s overall performance, as poor performing and more volatile investments may be offset by better performing and less volatile ones. While a broad…