18. Dividends vs. S&P/TSX Composite Index Dividend paying stocks outperform the market Canadian Annualized Portfolio Performance by Dividend Attribute
19. Dividends vs. S&P 500 Composite Index Dividend paying stocks outperform the market U.S. Annualized Portfolio Performance by Dividend Attribute
20. Dividends vs. S&P/TSX Composite Index An important part of total market returns Dividends have comprised between 25% and 45% of total returns over the last 20 years. Source: RBC GAM, data as of Dec. 31, 2010. An investment cannot be made directly into an index. Chart and table do not reflect transaction costs, investment management fees or taxes which would lower returns. Past performance is not a guarantee of future results. 75% 64% 55% Capital Gains 25% 36% 45% Dividend Returns 20 Year 10 Year 5 Year Returns as a percent of total
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23. Why Invest In High Yield/Corporate Bonds? FIVE BEST/WORST YEARS: HIGH YIELD & INVESTMENT GRADE CORPORATE BONDS (1987 – 2010) 5 Worst Years 5 Best Years
24. WHY INVEST IN CORPORATE BONDS ATTRACTIVE RISK/RETURN PROFILE 5-YEAR RETURN ANALYSIS: CORPORATE BONDS AND OTHER MAJOR ASSET CLASSES *BofA Merrill Lynch US High Yield Master II Index. **BofA Merrill Lynch US Corporate Master Index. As of October 31, 2011 ANNUAL RETURN STANDARD DEVIATION SHARPE RATIO High Yield Bonds* 7.9% 14.1% 0.50 US Corporate Bonds** 6.7% 7.3% 0.72 BMO Small Cap Blended 3.8% 23.0% 0.20 S&P/TSX Composite 2.7% 17.2% 0.13 Russell 2000 0.7% 24.5% 0.09 S&P 500 0.25% 18.9% 0.03 MSCI World -0.5% 20.5% 0.01
25. Higher yields offer downside protection when rates are rising - Period 1994 – June 2011
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28. Investor Emotions “ Be fearful when others are greedy and greedy when others are fearful” -Warren Buffet “ A bear market is a temporary interruption of a permanent uptrend -Nick Murray “ You’ve got to be careful if you don’t know where you are going because you might not get there” -Yogi Berra
29. The Cycle of Market Emotions Point of maximum financial opportunity Optimism Excitement Thrill Euphoria Anxiety Denial Fear Desperation Panic Capitulation Despondency Depression Hope Relief Optimism Point of maximum financial risk “ Wow, I feel great about this investment.” “ Maybe the markets just aren’t for me.” “ Temporary setback. I’m a long-term investor.”
30. Patience will be rewarded By staying invested you will not miss the best days Source: RBC Global Asset Management Inc. An investment cannot be made directly in an index. Graph does not reflect transaction costs, investment management fees or taxes. If such costs and fees were reflected, returns would be lower. Past performance is not a guarantee of future results. Performance data as of December 31, 2010.