Perspectives Blog

Beware of earnings gimmicks

Jason Wang, Senior Quant Analyst | March 10, 2014

The combination of slow revenue growth, high existing margins and increased multiples creates incentives for more aggressive accounting. Stocks with the lowest accounting accruals outperformed their benchmark by 2.7% per year between 1993 and 2013. History suggests that paying close attention to changes in earnings quality can be of significant value for investors. Since the global financial crisis, economic recovery worldwide has been slow. O…

The world has gone global. Have you?

Paul Berlinguet, Vice President, Equity Products | May 21, 2013

…obally in companies with diverse revenue streams. While problems in Europe or the fiscal cliff in the U.S. remind us that sovereign issues often drive stock prices temporarily, a well-diversified mix of U.S. and International stocks can dampen volatility. Market dislocations can often give investors the opportunity to buy global companies that may derive little revenue from their home country, “on sale.” With equity yield in high dema…

Q&A with Jeff Knight

Jeffrey Knight, CFA, Head of Global 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…

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…

Time, not timing

Columbia Management, Investment Team | November 26, 2013

…mply be — don’t. Focus on buy and hold for the long term. Over the past several decades the market has endured: the Iranian hostage crisis, a Savings & Loan collapse, the stock market crash of 1987, the fall of the dotcom stocks, an attack on the United States, two wars and a credit crisis. Investors often make the mistake of trying to time the market by simply selling out of it. But historically, some of the worst short-term market fluctuati…

Building a resilient portfolio

Jeffrey Knight, CFA, Head of Global Asset Allocation | July 16, 2013

…in investment strategy for many decades and has worked well. However, the fine points of diversification have advanced significantly in the last 10 years and it’s no longer viewed as simply allocating investments among global stocks and bonds. Modern portfolios now combine not just stocks with bonds, but financial assets with real assets, traditional investments with alternative investments and passive strategies with active strategies. Furthermo…

Weekly market summary (1/31/14)

Columbia Management, Investment Team | February 3, 2014

…ow 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-capitalization U.S. stocks. The Russell 1000 Growth Index measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Value Index measures the performance…