Have you ever wondered how the stock market always recovers from the worst of the crisis? Every situation brings opportunities for some and challenges for others. The ones with opportunities grow up in the ranks or enter the markets, while those with challenges fall in the ranks, and some even exit the market. You might be holding several tech, energy, financial, and real estate stocks in your Tax-Free Savings Account (TFSA). A simple adjustment could help you unlock value and shield your portfolio from 2026 risks.
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The market scenario in 2026
The year 2026 started with an energy shock, sending all Canadian energy stocks to a new high. A similar pattern was seen in the 2022 Russia-Ukraine war.
If you own Suncor Energy (TSX:SU) in your TFSA, you saw its value surge 55% this year to as high as $94.34. But a correction is on its way. Does this call for some profit booking? If we draw parallels with the 2022 situation, Suncor stock surged 45% in three months from March to May before correcting 30% in the next four months. The stock has completed its three-month rally, and the WTI price has touched US$112.95.
Oil prices cannot go beyond a threshold; otherwise, it will trigger a dip in demand. Countries start rationing oil, reducing consumption, and shifting to alternatives, thereby pulling down oil prices. The 1970s and 80s oil crisis is a textbook example of this scenario.
But why are we discussing this? It is time to make that small TFSA adjustment to protect your portfolio from falling in 2026.
One simple TFSA adjustment that could help shield you in 2026
Suncor Energy and other oil and gas stocks, like Cenovus Energy, could see a correction anytime soon. But what if they rise further? You can take the mid-route and sell 25-30% of your oil and gas shares at the current peak, while holding the rest. This way, you will book profits and have some shares that could benefit from another upside, if any.
Instead of withdrawing that amount from your TFSA, you can reinvest the profits in Shopify (TSX:SHOP) and Descartes Systems (TSX:DSG). Some resilient technology stocks are currently down.
Shopify
Shopify is at its seasonal low. It tends to pick up momentum in October and peak in November and February. Its business is based on the flywheel concept, where better sales for merchants convert to better revenue for Shopify. The company has introduced some artificial intelligence (AI) tools to help merchants improve the online store performance, target customers more efficiently, and generate better sales. The next three to four years could see AI-driven growth materialize.
Descartes Systems
Descartes Systems offers logistics and supply chain management solutions largely in the United States. First, the tariff war and then the Iran war disrupted trade volumes, pulling down Descartes stock. Now is the time to buy it as the United States returns the tariff money and the intensity of tariffs eases.
Whenever trade issues ease and volumes pick up, Descartes will be ready to cater to the changed needs of the new supply chain. For that, it has been acquiring several smaller companies for their technology.
Investor takeaway
Such timely rebalancing from outperforming segments to underperforming segments with future growth potential can be done tax-free in your TFSA. Otherwise, in a normal account, the profit booking from Suncor would trigger a capital gain tax. Such taxes often dilute the impact of rebalancing. Many Canadians are not aware of the true potential of tax-free growth of investments and miss out on such opportunities.
