Perspectives Blog

Could a 529 plan help you pay less for college?

Columbia Management, Investment Team | May 22, 2014

College savings plans offer an important tool for managing the cost of higher education. Saving in advance could offer a significant cost savings compared to taking loans during college. Use our 529 Savings vs. Loans Calculator to run your own personalized estimate. Saving for college early on can greatly benefit you in the long run. By saving in an investment vehicle such as a 529 college savings plan, you may be able to avoid relying on loan…

Gimme credit

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | August 22, 2013

…sales—this is overwhelming any increase in balances from home purchases so far.Home equity lines of credit fell by $12 billion, falling a steady 8% annually. On to the good news. There was a ninth consecutive increase in auto loans (up $20 billion and the largest quarterly rise since 2006), rising 8.5% in the last year. This is consistent with the healthy increases in auto sales in the last year, which has been a bright spot for manufacturing and…

Missing links and multipliers

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | June 9, 2014

o-debt ratios. The outcome has left entry-level and first time homebuyers on the sidelines especially those with student debt. This was underscored recently by a New York Fed study* which showed that young people with student loans were much less likely to invest in houses than those without loans, which is a reversal of pre-recession trends. They believe this is one reason why the housing recovery has not been stronger. When you restrict credit…

Credit alternatives in government-backed debt

Columbia Management, Investment Team | June 23, 2014

…Development Company)/504, and SBIC (Small Business Investment Company) programs. The SBA CDC/504 program provides secured financing for the purchase or improvement of real estate and long-term equipment through 10- or 20-year loans. Assets financed through the program require three parts: up to 50% from a senior bank loan, a maximum of 40% through a junior loan from the SBA, and at least 10% equity contribution from borrower. The SBA loan not onl…

Gut check: The outlook on fixed income

Colin J. Lundgren, CFA, Head of U.S. Fixed Income | February 24, 2014

…be able to tighten enough to offset the effect of rising rates. High-quality bonds may struggle to generate coupon-like returns, which is better than last year but nothing to brag about. Do we prefer high-yield bonds or bank loans? High-yield bonds. High-yield bonds and bank loans were the only two winning sectors in fixed income in 2013 with returns of 7% and 5%, respectively. We are comfortable holding our current positions in high yield and b…

How will you pay for your child’s future education?

Columbia Management, Investment Team | August 27, 2013

College savings plans offer an important tool for managing the cost of higher education. Saving in advance could offer a significant cost savings compared to taking loans during college. College Savings Calculators can help you assess your personal situation. Before you know it, that special day will arrive — your child will be off to college. But are you prepared for the significant college expenses that may come your way? With an education f…

Saving for college — What’s the real cost of waiting?

Columbia Management, Investment Team | September 16, 2013

…vings needed just five years earlier. Savings strategies Don’t be discouraged by estimated college costs. You may not need to target the full education expense. Many families use a combination of savings, current income and loans to pay college bills. But relying on current income or loans alone can be very costly and burdensome to parents and children. Remember that what you invest now can have an exponential effect on what you have to borrow…