Perspectives Blog

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

…ical 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 portfolio income. We believe the current environment remains very favorable for high-yielding stocks for two reasons; 1)…

The end of “risk-on/risk-off”

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | February 3, 2014

…we have witnessed a decline in inter-asset class correlations as evidenced by the decline in the correlation of stocks within the S&P 500 Index. Source: Columbia Management Investment Advisers, LLC, December 2013 Lowering both cross-asset correlations and inter-asset correlations provides potential benefits for structuring multi-asset portfolios. First, as the correlation of stocks within the S&P 500 has declined from the peak reached i…

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…

Should your income be fixed?

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

…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 more volatile than investment-grade bonds or the like. However, this may be offset by the…

Second quarter U.S. corporate earnings wrap-up

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

…e 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 driven than market driven because device stocks did not see a noticeable improvement in their results. While device…

Global Asset Allocation Outlook (June 2014)

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

…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 from an underweight to a neutral position. Small-cap stocks sold off sharply in the first few months of the year a…