MAKING SENSE OF MARKET VOLATILITY

Name

TileCompany

DATE

AGENDA

STRATEGIES FOR VOLATILE MARKETS

LESSONS FROM HISTORY

RECENT EVENTS

2.

3.

1.

RECENT EVENTS

400

600

800

1,000

1,200

1,400

1,600

1,800

1995 1999 2003 2007 2011

A ROLLERCOASTER DECADE…

Technology Bubble

Financial Crisis

European Debt

Worries

Source: Yahoo Finance.S&P 500, January 1995 to September 26, 2012. The chart above is for illustrative purposes only.

400

600

800

1,000

1,200

1,400

1,600

1,800

1995 1999 2003 2007 2011

… RESULTS IN AN EMOTIONAL RIDE

Thrill

Excitement

Optimism

Hope

Relief

Source: Yahoo Finance.S&P 500, January 1995 to September 26, 2012. The chart above is for illustrative purposes only.

Euphoria

Denial

Fear

Desperation

Panic

Despondency

Anxiety

Depression

Hope

Relief

Thrill

Excitement

Optimism

Euphoria

Depression

Denial

Fear

Desperation

Despondency

Anxiety

Panic

Optimism

Relief

Hope

CAUSES OF RECENT VOLATILITY

LESSONS FROM HISTORY

0

100

200

300

400

500

600

700

1974 1978 1982 1986 1990 1994

1974

DON’T PANIC OVER THE PRESS

Source: Yahoo Finance.S&P 500, January 1974 to December 31, 1997. The chart above is for illustrative purposes only.

199219871984198019791979

0

400

800

1,200

1,600

2,000

2,400

1995 1999 2003 2007 2011

DON’T PANIC OVER THE PRESS

Source: Yahoo Finance.S&P 500, January 19995 to October 3, 2011. The chart above is for illustrative purposes only.

FOCUS ON THE BIG PICTURE

First 100-point dive in Dow Jones history on Friday, October 16, 1987

The 2nd was the following Monday

Sources: Reuters, Government of Canada.

“BLACK MONDAY” THE CRASH OF 1987

FOCUS ON THE BIG PICTURE

Dow Jones down 554.26 points, or 7%

12th biggest percentage loss and 3rd

biggest points loss on record

NASDAQ Composite fell 7%

S&P 500 fell 64.63, or 6%, to 877.01

Sources: Reuters.

OCTOBER 27,1997

Closed for 6 days: longest stock market closure since the Great Depression

Down 684 points (7%): Dow Jones biggest-ever one-day point decline

By weeks end: Down 1369.7 points (14.3%), its largest one-week point drop in history

FOCUS ON THE BIG PICTURE

Sources: Reuters.

THE AFTERMATH OF 9/11 2001

100.00

1,000.00

10,000.00

1980 1984 1988 1992 1996 2000 2004 2008 2012

FOCUS ON THE BIG PICTURE

Crash of 1987

1997 market crisis

9/11

Latin America

Savings & Loan Crisis

Mexican Peso Crisis

Russian Crisis

European Debt

Worries

$10,000

$106,197

2008 Financial Crisis

Source Yahoo Finance, S&P 500 January 1970 to September 26,2012For illustrative purposes only.

MARKETS TEND TO RECOVER OVER TIME

STRATEGIES FOR VOLATILE MARKETS

THE BEST STRATEGY IS TO STAY INVESTED

1.7%

-2.1%

-5.2%

-7.7%

-9.9%

-1.9%

-8.6%

-12.6%

-15.8%

-18.7%

-21.3%

8.1%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Last 10 Years minus 10 bestdays

minus 20 bestdays

minus 30 bestdays

minus 40 bestdays

minus 50 bestdays

S&P/TSX Composite TR

S&P 500 TR CAD

MISSING THE BEST DAYS IN THE MARKET IMPACTS RETURNS

As of August 31, 2011.Source: Dynamic Funds, Bloomberg.

-5.8%

3.5%

2.1%

7.8%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

1 Year 20 Years

Ra

te o

f Re

turn

Average Investor

Market

TRYING TO TIME THE MARKETS HAS COST INVESTORS

Source: 2011 Dalbar Inc. (US) Research Report.Equity Market represented by S&P 500.

THE BEST STRATEGY IS TO STAY INVESTED

DIVERSIFY BY ASSET CLASS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Global Bonds

Canadian Equities

Canadian Equities

Canadian Equities

Global Equities

Canadian Equities

Global Bonds

Canadian Equities

Canadian Equities

Global Bonds

Canadian Bonds

Global Equities

Canadian Bonds

Global Equities

Canadian Equities

Canadian Bonds

Canadian Bonds

Global Equities

U.S. Equities

Canadian Bonds

Canadian Equities

Canadian Bonds

Global Equities

Canadian Bonds

U.S. Equities

Global Equities

U.S. Equities

U.S. Equities

Canadian Bonds

U.S. Equities

Global Equities

U.S. Equities

U.S. Equities

U.S. Equities

Global Bonds

Global Bonds

Global Equities

Canadian Bonds

Global Equities

Global Equities

U.S. Equities

Global Bonds

Global Bonds

Global Bonds

Canadian Bonds

U.S. Equities

Canadian Equities

Global Bonds

Global Bonds

Canadian Equities

BEST PERFORMING ASSET CLASSES CHANGE FROM YEAR TO YEAR

Source: Paltrack, Dynamic Funds. All Indices are represented in Canadian Dollars.Canadian Bonds – Dex Universe Index. Global Bond – Barcap Global Aggregate TR. U.S. Equities – S&P 500 Total Return. Global Equities – MSCI World GR. Canadian Equities – S&P/TSX Total Return.

DIVERSIFY BY GEOGRAPHY

THE BEST PERFORMING COUNTRIES CHANGE FROM YEAR TO YEAR201020092008200720062005200420032002

Source: Paltrack, Dynamic Funds. All Indices are represented in Canadian dollarsMexico – BMV IPC. U.S. – S&P 500 Total Return. England – FTSE 100 Total Return. Canada – S&P/TSX Total Return. Germany – FSE DAX Total Return. Brazil – BOVESPA. France - Euronext Paris CAC 40 PR. Japan – Nikkei 225 Average PR. Hong Kong – Hang Seng Hong Kong Composite.

2011

0

10

20

30

40

50

60

70

80

90

Jan Feb March April May June July Aug Sept Oct Nov Dec

# o

f U

nit

s P

urc

ha

se

d

$0

$2

$4

$6

$8

$10

$12

Pri

ce

/Un

it

# of units purchased

Price per unit

YOU DON’T HAVE TO TIME THE MARKET

For illustrative purposes only.

DOLLAR COST AVERAGING: BUY MORE SHARES DURING MARKET FLUCTUATIONSINVESTING $500/MONTH FOR 12 MONTHS

TAKE ADVANTAGE OF DOLLAR COST AVERAGING PRODUCTS

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Sep-2008 Nov-2008 Jan-2009 Mar-2009 May-2009 Jul-2009

Lump Sum

Dollar Cost Averaging Product

Source: Yahoo Finance.The above chart illustrates a hypothetical lump sum $50,000 investment in the S&P 500. The Dollar Cost averaging product transfers the $50,000 investment into the S&P 500 over a 52 week period, with the remainder waiting to be invested in cash. For illustrative purposes only.

THEY CAN SMOOTH OUT MARKET VOLATILITY$52,000 HYPOTHETICAL INVESTMENT IN THE S&P 500

EXCEPT IN RISING MARKETS

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Oct-2011 Dec-2011 Feb-2012 Apr-2012 Jun-2012 Aug-2012

Lump Sum

Dollar Cost Averaging Product

Source: Yahoo Finance.The above chart illustrates a hypothetical lump sum $50,000 investment in the S&P 500. The Dollar Cost averaging product transfers the $50,000 investment into the S&P 500 over a 52 week period, with the remainder waiting to be invested in cash. For illustrative purposes only.

IN RISING MARKETS LUMP SUM INVESTING PERFORMS BETTER THAN DCA$52,000 HYPOTHETICAL INVESTMENT IN THE S&P 500

FOCUS ON THE LONG TERM

1

10

100

1,000

10,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

504%

981%14 years sideways

14 years sideways

Source: Yahoo Finance, S&P 500 January 1950 to September 26, 2012.For illustrative purposes only.

STRONG BULL MARKETS TEND TO FOLLOW SIDEWAYS MARKETS

FOCUS ON THE LONG TERM

Rise and fall of high growth stocks The U.S. was committed to a war in Asia Oil prices have skyrocketed U.S. unemployment at 9%+

1999 – 2012

1982 – 1997

1968 – 1982

Source: Yahoo Finance, S&P 500. Light blue chart from January 1, 1999 to September 26, 2012. Dark Blue chart January 1st, 1968 to December 31st, 1997.For illustrative purposes only.

DOES HISTORY REPEAT ITSELF?

Q & A

IMPORTANT INFORMATION

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in units value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated

Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any funds managed by Goodman & Company, Investment Counsel Ltd. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell.

This document is not to be distributed or reproduced without the consent of Goodman & Company, Investment Counsel. Dynamic Funds is a division of Goodman & Company, Investment Counsel Ltd.