Perspectives Blog

Implications of a stronger U.S. dollar

Matthew Cobon, Head of Government and FX Investments, Fixed Income, Threadneedle Int'l Ltd | October 27, 2014

The U.S. dollar could continue to perform well, but there is a short-term case as to why dollar strength could be accompanied by more asset class volatility. Currency markets are moving ahead of what interest rate markets are telling us, so there is a disconnect. Things could become very challenging for the Fed if the U.S. starts importing deflation from elsewhere. The asset class volatility argument is related to global liquidity being withdra…

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

…ent. Gold does best when, not only is there geopolitical risk, but also when we have questions about whether the U.S. dollar is functioning as a credible reserve currency. At present it is, given that the U.S. is enjoying relatively strong growth and investment is flowing into the country to fund growing manufacturing and energy production. Thus in 2013, $200 billion of investment flowed into oil production in the U.S. alone. As a result, those i…

Global asset allocation outlook (September 2014)

Columbia Management Global Asset Allocation Team, | October 6, 2014

Recent market performance, particularly in September, has been negative across a widespread array of asset classes as we have seen the U.S. dollar exchange rate rise with increasing intensity in recent months. The worst returns, not coincidentally, were delivered by the very assets that have shown historically high sensitivity to dollar strength. This disruption to currency stability in general, and the particular importance of a rise in exchang…

Asset allocation: Q4 equity strategy

Columbia Management Global Asset Allocation Team, | October 27, 2014

…t 2: Balance sheets continue to expand Source: Bloomberg Euro area recovery in Q2 was disappointing with growth skirting recession at 0.1% and inflation falling further, despite near-zero interest rates. This prompted the ECB to take action to stimulate the credit cycle in the eurozone. On this news, the euro fell 7.5% versus the dollar, but European equity markets have held up reasonably well in local currency terms. This slide in the euro coul…

Millennials, are you ready to take the next steps?

October 9, 2014

dollar cost averaging and to give your retirement savings a solid start. Lesson 3: Take advantage of retirement savings options Many financial professionals recommend contributing to an employer’s 401(k) plan at least the maximum amount that the employer will match. So if the company matches up to 5%, employees should consider contributing 5% each pay period. Not taking advantage of a company match is like turning down a raise. And remember, the…

The importance of taking a long-term perspective

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | February 3, 2014

…east one year to final maturity and have at least $250 million par amount outstanding. To qualify, bonds must be SEC-registered The BofA Merrill Lynch High-Yield Bond Master II Index is an unmanaged index that tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. The Standard & Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capit…

Release the doves

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | October 20, 2014

s candidates. But it is obvious the withdrawal of QE is now proving a challenge for the Fed. I would be cautious until we understand what is driving inflation expectations and if the decline is temporary. I still believe the fundamentals in the U.S. are sound, both near term and longer term with only modest negative follow through to earnings from a strong dollar and weaker global demand. My expectations for growth are unchanged at 2.5%-3.0%, wit…