Newsletter

In the quickest meltdown in financial history, global equities experienced their worst quarterly performance since the 2008-09 financial crisis. While the Canadian stock market declined almost 24%, U.S. stock markets dropped 16% in Canadian dollar terms.

Hemisphere Capital Management (HCM) has recently completed a comprehensive audit of our entire client investment returns history. Utilizing a U.S. based CPA firm that specializes in auditing investment returns, HCM committed nearly eighteen months (and thousands of man hours) to completing this process. We’re proud of our extensive track record of providing trustworthy investment counsel and want our clients to know they can rely on the investment returns we report. As such, achieving this gold standard of reporting performance was well worth the significant time and expense.

In January 2017, clients of Hemisphere Capital Management (HCM) will get their first taste of the Client Relationship Model, Phase 2 (known commonly as CRM2). CRM2 introduces standardized reporting requirements for regulated Canadian financial advisors. Not surprisingly, HCM already meets the bulk of CRM2’s reporting requirements. Although well-intentioned, CRM2 will likely create confusion for most HCM clients rather than improve reporting transparency.

Following four decades of excessive credit expansion, the U.S. experienced a bursting credit bubble in mid-2008. In the aftermath, North American stock markets declined almost 50% by early 2009. Fast forward to the summer of 2012 and North American stock markets, exhibiting strong resilience, have now recovered to their pre-bubble highs.

From a financial perspective, the first decade of the 21st century consisted of a bubble of bubbles. First of these was the technology or dot-com boom that began in the late 1990’s and eventually burst in mid 2000. Responding to this collapse, the U.S. Federal Reserve (the central bank of the United States) aggressively cut short-term rates from 6% down to the 1.5% range in 2002 and held short rates at this level for over three years.