Perspectives Blog

Does Japan’s sell-off present buying opportunities?

Daisuke Nomoto, Senior Portfolio Manager | February 10, 2014

…n the Japanese yen (which negatively correlates with the Japanese stock market) based on the expectation that the spread between U.S. and Japanese bond yields will continue to widen which would put upward pressure on the U.S. dollar vs. the yen. Further, the Bank of Japan (BoJ) intends to increase the monetary base by ¥60trillion to ¥70trillion annually. With the Federal Reserve slowing its pace of money expansion, we expect Japan’s monetary base…

The role of income inequality

March 3, 2014

…everaging is largely complete, income inequality can continue to rise in the U.S. and consumption remain depressed because wealthier households typically save a greater share of income and have a lower propensity to spend per dollar of income. In addition, permanently tighter lending standards have left many households unable to access credit or unwilling to do so. So it is both a demand and a supply story as it relates to credit. But the main po…

Global Asset Allocation Outlook (as of February 24, 2014)

Columbia Management Global Asset Allocation Team, | March 10, 2014

…ome ground lost in February but are still down for the year in total. Fixed-income returns have been positive across all sectors with longer dated Treasuries, municipal debt and high-yield corporate bonds leading the way. The dollar weakened against both emerging market and developed market currencies. Despite a slight slowdown in recent economic growth, our Global Asset Allocation proprietary investment clock for the U.S. signals continued econo…

Don’t throw the baby out with the bath water – The case for long muni bond funds

Catherine Stienstra, Senior Portfolio Manager | January 29, 2014

…h higher tax bills and we suspect that many taxpayers may be caught off guard by the new higher levels of taxation. The highest federal income tax rate is 43.4%, resulting in many investors taking home barely 56 cents of each dollar earned. Municipal bonds can help investors keep more of what they earn, since the income may be exempt from local, state and/or federal income taxes. As tax rates move higher, investments that provide income exempt fr…

It’s a mobile world

Dave Egan, Senior Equity Analyst | March 10, 2014

…mple, while the high-end is decelerating, the low-end in China and the emerging markets continue to see strong growth. As consumers in these areas trade up from voice-only feature phones to 3G/4G data-centric smartphones, the dollar amount of components per phone continues to rise. For example, radio frequency (RF) components in 2G voice phones is < $1; RF components in an emerging markets long-term evolution (LTE) smartphone can be as much as…

Should investors care about valuation?

Rich Rosen, Portfolio Manager | November 25, 2013

…etermining whether it is a good time to invest in stocks? What does valuation mean anyway? The most common measure of valuation starts by looking at the market’s P/E, or how much investors are presently willing to pay for one dollar’s worth of future earnings. Using prior cycles as a benchmark for what the norm should be, you can then conclude whether the market is cheap or expensive. Looking at the market based on valuation: How helpful is it? W…

The U.S. economy — a gain in GDP?

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | May 2, 2013

…nding (mainly defense) which has contracted in 10 of the last 11 quarters. Net exports were also a drag as imports (a negative for the GDP accounts) grew at a faster pace than exports—the latter likely hurt by the strong U.S. dollar and the spreading global slowdown. Fixed investment increased 4%, as residential investment (housing) grew 12% in Q1. This has been rising between 10% and 15% seasonally adjusted annualized rate (saar) for the last fe…