Perspectives Blog

Interpreting the bond rally from a multi-asset perspective

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

…opposite conditions. In fact, with bond yields having broken through to new lows (as of May 28), we observe that stock prices remain at record high levels, credit spreads are as tight as they have been all cycle and volatility across stock, bond and currency markets is notably subdued. Exhibit 2 Source: Bloomberg. Data as of 05/28/14 There is another difference that matters. Since bond yields ended 2013 at their highest level in years, the initi…

2015 Outlook — Same song, slightly different arrangement

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 15, 2014

…potify or Rhapsody. As I sit down to compose an outlook for 2015, it occurs to me that since 2009, the financial markets have been more like a Close ’n Play than an iPod — low expected returns from safe assets and stocks offering the best chance of any meaningful investment gains. Just like last year and the year before. What’s different in 2015? As stationary as market conditions have felt lately, circumstances are always evolving. For 2015, whi…

The new tax regime and stock compensation

Abram Claude, Vice President, Columbia Management Learning Center | November 21, 2014

…yroll and ordinary income taxes. The most well-known stock compensation program involves grants of non-qualified stock options (NQSOs). The grants are issued with a specific exercise price. Most NQSOs do not become compensation until the employee has reached a vesting period and elects to execute all or a portion of a stock option grant. At execution, the spread between the stock option exercise price and the fair market value becomes compensatio…

Are financial markets priced for secular stagnation?

Columbia Management, Investment Team | December 15, 2014

…ight be associated with international events is hard to disentangle. But the move is certainly consistent with a market that changed its view on the long-term equilibrium policy rate consistent with steady state growth. Exhibits 1 and 2 benchmark recent U.S. inflation and government bond market developments to those experienced 18 years earlier in Japan. Exhibit 1 shows that in the period following the popping of the Japanese land price and stock

Oil and the high yield market

Columbia Management, Investment Team | December 8, 2014

…rtfolio Manager  Size of the Energy Sector Because the energy sector is a large component of the U.S. high yield market relative to some other asset classes, the market has received increased scrutiny due to recent declines in oil prices. Prior to the recent sell off, energy accounted for more than 15% of the high yield market, making it by far the largest industry (healthcare is the second largest at approximately 8.5%). Energy accounts for appr…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

We are seeing a market rotation from momentum to value on macro factors and internal market dynamics. Keys are to stay diversified, look for businesses with strong moats and that produce solid cash flow and compare to historical valuations. Favored themes are industry consolidation plays, mobile and Internet. In recent weeks there has been a dramatic shift in alpha generation from hyper growth technology stocks to more value-oriented names. We…

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

Higher-yielding equities underperformed the market last year raising questions about whether dividend investing remains an attractive strategy. Even if rates continue a long-term increase from current levels, we expect that equities sensitivity to rising rates will decline. We believe the drivers that have resulted in historical stock market outperformance from high-yielding equities remain intact. By Paul Stocking, Senior Portfolio Manager an…