Young and Frederick - ScotiaMcLeod Whitby

Geoff Ho, CFA - Director, Canadian Equities, Portfolio Advisory Group

Global markets have had a phenomenal run over the past six months, with the S&P/TSX Composite Index posting capital appreciation of 22.5% and total return including dividends of 24.3%. It is not very often that share prices experience such dramatic and rapid advances as this was a rare confluence of severely oversold conditions, unprecedented fiscal and monetary policies aimed at stimulating economic activity, resilient and opportunistic emerging markets, and excess liquidity looking for a home. On a relative basis, dividend income has certainly been a small component of the overall gain during this recent period.

Taking a longer term perspective, however, we continue to highlight the importance of dividend income as a component of total investment return. For example, between 2001 to the present, the S&P/TSX Composite rose by 27.6% while the total return including dividends came in at 54.7%. Accordingly, while it is important to have exposure to cyclical stocks and growth companies to position for the next economic cycle, it is equally important to enhance returns with a core list of strong dividend paying stocks in the portfolio.

Gold prices rallied to record highs for a third successive session in Europe on Thursday, as persistent weakness in the dollar fuelled fund buying of the metal as an alternative.

Gold's gains lifted other precious metals, with silver reaching its strongest level since July 2008 and palladium hitting a 13-month peak.

Spot gold rose to $1,053.30 an ounce at 11:27 GMT against $1,043.70 late in New York on Wednesday. Earlier it touched a record high of $1,058.20 an ounce

“The dollar just continues to weaken and that's the main driver of gold,” said Citigroup analyst David Thurtell