If your portfolio could use a bit of calm as the market rally starts getting tougher to navigate, it might be worth checking in on some of the cheap Canadian dividend payers. While the growth-to-value rotation may have driven up the price of admission in certain steady low-beta defensive names, I still think that there’s relative value to be found in this market.
And for those who are unprepared for the next market correction or period of sideways action, perhaps it’s worth being a buyer today, rather than waiting around for that 10% drop to come and go. At this juncture, it might take something truly scary to cause a drawdown in excess of 10%, or perhaps a handful of negative developments.
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Why it’s smart to ready your portfolio for anything!
Who knows? Perhaps an AI-induced wave of layoffs across the white-collar world could be enough for individuals to think that the Citrini report scenario is playing out and that the economic implications may yet be considered by investors, many of whom expected nothing but good things to happen for the market. Indeed, a productivity boost is always nice, but there could be side effects, and while they could set the stage for a scare in the future, I’d not worry as an investor, as the policy response may very well prevent a worst-case scenario from playing out.
Whether it’s some form of UBI or something else, I wouldn’t get too far ahead, but I would insist on getting paid to move through what could be one of the most volatile periods of the AI age. Who knows? Perhaps an AI bubble burst could coincide with a massive shock to employment. If such a scenario would completely obliterate your portfolio, perhaps it’s a sign that it’s time to start showing the defensives more love.
At the end of the day, staying calm through bull and bear markets is key to building long-term wealth. While the bull still has strong legs, the fact remains that the bear will eventually come out of its cave. And investors must be cool and collected when the time comes.
Enbridge stock: A bountiful play in this climate
A name like Enbridge (TSX: ENB) stands out as a bountiful dividend giant to hold, even though the dividend yield, which used to be close to 7%, is now at 5.32%.
With the stock gaining over 10% (that’s good enough for a year’s worth of returns!) for 2026 so far, and the trailing price-to-earnings (P/E) multiple expanding above 22 times, it feels like it’s too late to get into the steady pipeline. Given its utility-like nature and swelling cash flows, though, I still think it makes sense to be a buyer right here at $72 and change. Why?
The wind is at its back, and the cash flow stream is about to get that much more packed as new gas pipelines come into service. Of course, this catalyst may already be priced in, but the big tailwind, I think, may not be. As the great AI data centre build goes full steam ahead, it’s the midstream players that could stand even taller as they deliver natural gas to keep various locations up and running.
