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More Risk, Less Return
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.
The Decade Of Bubbles
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.
Investor Protection – Safeguarding Client Assets
As a result of a number of recent high profile cases uncovered in the U.S. and Canada involving investor fraud and theft of client assets, Hemisphere Capital Management (“Hemisphere”) feels it is important to review our operational protections and regulatory controls that are in place to safeguard your assets.
The End Of The Customer Era?
Gross Domestic Product (GDP) is a measure of all goods and services produced in the economy. The most common method of determining a nation’s GDP involves totaling all consumer spending, business spending/investment, government spending and net exports (exports less imports).
The Mighty Loonie
Since the start of 2007, the Canadian dollar has strengthened upwards of 20% against the U.S. dollar. When the loonie hit parity in September, Canadians paused for a modest (typically Canadian) celebration. During early November, our dollar continued its climb eventually spiking to $1.09, a level not seen since the 1870’s. From its low five years ago, the loonie has experienced a 65% gain. The mighty loonie seems to have given Canadians a new sense of confidence.
Why We Own Gold
An important, and sometimes misunderstood, item impacting investment returns is inflation. Investment returns require a common basis for measurement which in our case is the dollar. As a paper currency, the dollar has no fixed value except a promise by the government to pay you its current purchasing power. Throughout history, the “market value” or purchasing power of all currencies has declined (in many cases quite severely). Inflation is the measure of that decline in purchasing power or currency debasement. A 10% return is excellent if inflation is 2%, but poor if inflation is 9%.
Recent Newsletters
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The Hemisphere Approach to Wealth Management12 May 2023
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The Way We Were25 Jan 2023
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The Looming European Natural Gas Crisis29 Nov 2022
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The Dollar Safe Haven14 Sep 2022
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Valuations Matter13 Jul 2022
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The Geopolitical Divide04 Apr 2022
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WPC Rising Stars 202119 Oct 2021
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Will Inflation Persist?14 Oct 2021
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A Year into the Pandemic12 May 2021
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Extraordinary Times21 Apr 2020