Perspectives Blog

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

…factors support strong dividend growth in the next few years. We believe the drivers that have resulted in historical stock market outperformance from high-yielding equities remain intact. Briefly, valuations of high-yielding stocks benefit from the capital discipline dividends impose on management, dividends enjoy favorable tax treatment relative to interest income and growth in dividends can provide a measure of inflation protection for portfol…

Second quarter earnings preview

Tom West, Director of Equity Research | June 30, 2014

We believe YTD valuation improvement in stocks is more likely the result of basic supply and demand than an upward revision off corporate prospects. Going into corporate reporting season, we’re focused on whether the cyclical sectors show some signs of increasing activity. For the less cyclical sectors and consumer discretionary industries, we want to see if pricing holds up amid flattish demand and a tepid wage growth. In about a week, corpor…

Q&A with Jeff Knight

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | January 6, 2014

Can the stock market continue to move higher in 2014? How do you think monetary policy will impact the markets? Given where interest rates are, what are your thoughts on fixed income? How do you think about asset allocation today? Q: Can the stock market continue to move higher in 2014? A: I think we are a ways from stocks being so expensive that you have to be a seller just because they’ve gone up a lot. Historically, the kind of momentum tha…

Second quarter U.S. corporate earnings wrap-up

Tom West, Director of Equity Research | August 18, 2014

…capital markets influenced companies beat low expectations in the second quarter. Expectations in healthcare were for a pickup in health care utilization this quarter following a seasonally challenged first quarter. Hospital stocks saw robust profit gains ahead of expectations driven by the Affordable Care Act (ACA) and reduction of bad debts. To a lesser extent there were modest improvements in utilization, but this may have been more share dri…

In the land of 7 footers, 6’8″ plays guard

Fred Copper, Senior Portfolio Manager | May 5, 2014

…sixth year of the recent ultra-low interest rate regime and it is not at all obvious that any bubble has formed (Exhibit 1). Exhibit 1: Fed Funds Rate – low for six years Source: Federal Reserve   Yes, some hyper growth stocks got significantly overbought, but they represented a fairly small percentage of total stock market capitalization so their recent sharp correction has not resulted in broad market action distinguishable from typical v…

Should your income be fixed?

David King, CFA, Senior Portfolio Manager | December 16, 2013

…e-oriented and conservative investors. Fortunately, the words “income” and “fixed” are not linked by decree. There are many non-fixed, income-oriented security structures which are suitable for investment, including: – Common stocks with safe, stable or rising dividends – Floating rate bonds – Bank loans – Preferred stocks and bonds with interest rate reset features – Master Limited Partnerships Without question, some of these asset classes are m…

Global Asset Allocation Outlook (June 2014)

Columbia Management Global Asset Allocation Team, | June 30, 2014

…ied portfolios should continue to fare well in this environment and the global asset allocation team continues to recommend modestly overweighting equities over bonds with a neutral allocation to commodities. We upgraded U.S. stocks from an underweight to a neutral position. U.S. equity valuations relative to other countries are looking a little rich but not enough to remain an underweight at this point. Within U.S. we upgraded small-cap stocks f…