Navigating Change:
A Look Back at Cherry Hill’s Dynamic 2023
Hi, !
Happy New Year once again! As I reflect on the whirlwind that was 2023, I’m thrilled to share insights and highlights with you.
Inflation & Interest Rates: A Macro Perspective
2023 was a year marked by the dual challenge of inflation and rising interest rates, a significant indicator of economic shifts. In Canada, inflation peaked at an alarming 8.13% in June 2022, sparking creative terms like “Excuseflation”, “Greedflation”, and “Shrinkflation”. This lead to a series of rate hikes by the Bank of Canada – a move from a mere 0.25% in March 2022 to the substantial 5.00% we see today. While the U.S. Federal Reserve signals a potential easing of rates in 2024, the Bank of Canada maintains a stringent stance, hinting at further increases. This scenario reflects a complex interplay of economic policies and market reactions, reminding us of the delicate balance central banks must maintain.
Market Dynamics: Shifts and Surges
2023 began with significant shifts in the tech sector. The pandemic-induced digital boom, symbolized by companies like Zoom and Shopify, faced a reversal as the world returned to physical interactions. This led to layoffs, R&D cuts, and a domino effect culminating in bank collapses, notably in the U.S. This shift caused ripples, contributing to bank crashes in the U.S. and leading to significant changes in the banking system, including a move towards Private Credit.
The juxtaposition of these collapses against the extraordinary surge of the ‘Magnificent 7’ tech giants underscores a divergent market reality. This disparity is evident in the S&P 500’s performance, skewed by these tech giants, masking the actual market underperformance. Removing these seven companies from the equation, the remaining companies in the index actually saw a -4% return.
Key Headlines of 2023
From the WHO downgrading COVID to an ongoing war in Ukraine and new tensions in Israel, 2023 was eventful. The U.S. even dealt with a peculiar “spy balloon” incident, which had us on the edge of our seats for a couple days. On a lighter note, Taylor Swift’s “The Eras Tour” became the highest-grossing tour of all time, crossing $1 billion in revenue.
Cherry Hill Private Wealth: Our Year in Review
2023 was also monumental for Cherry Hill Private Wealth, thanks to you and your support. We celebrated our first anniversary and gratefully welcomed 35 new clients, largely through your referrals. Our team is looking to expand in 2024, with plans to add more advisors and associates. We are committed to growing and enhancing our services for you and your friends and family. We will continue to be able to bring on new clients through your referrals throughout 2024.
Our diversified investment strategy, which includes private credit, private equity, and private real estate, continues to show promising results. For instance, our Enhanced Balance Plus portfolio shows a standard deviation of 1.43% with a 7.52% annual return since inception, outperforming many traditional balanced funds. I looked at several of the most popular funds on the market and they typically had a more volatility with similar or lower returns.
Personal Reflections: Balancing Life and Learning
On a personal note, 2023 was a year of rekindling passions and embracing new challenges. In my younger days, I spent countless hours on the ski hills, a passion that unfortunately took a backseat in recent years. However, this year marked a delightful change. We introduced our son, Miles, to skiing, and he instantly fell in love with it! Our family trip to Kelowna became a memorable adventure, especially at Silverstar Resort. There, Miles’s enthusiasm and bravery shone through as he persuaded his ski instructor to venture down some challenging black diamond trails.
Professionally, obtaining the RIAC designation reinforced my commitment to responsible investing, aligning with my belief in the symbiotic relationship between societal good and financial success. I also managed to read 20 books last year, fueling my continuous learning journey. I am committed to continuing my learning in 2024 to provide you the best advice available and I have already registered for the Wealth Management Essentials course.
As we look forward to 2024, I am reminded of the importance of adaptability, continuous learning, and the pursuit of a balanced life. Let’s embrace the challenges and opportunities this new year brings.
Thank you for joining me in this look back at 2023. Here’s to a prosperous 2024!
All the best to you and your family,
Trevor
P.S. If you want to read the December Market Commentary, you can find it here.
