Is a stock market crash coming?
This is a question that many investors, including me, have had on our minds. After a record performance from the TSX Index and continued geopolitical and economic turmoil, it’s a natural question to have. A stock market crash in 2026 seems like a reasonable concern.
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Stock markets – long-term performance
History shows that over the long-term, stock markets have a tendency to rise. As long as the economic and political systems that support it continue to function as they are meant to. In recent times, it seems that many things that we once took for granted are at risk. For example, affordable energy is rapidly becoming a thing of the past. Also, that healthy relationship with our U.S. neighbour is being jeopardized.
While these facts can easily create anxiety in our minds, let’s try to take a step back and separate ourselves from our emotions. Yes, things are not moving along in an ideal way. Rising oil prices are a problem for the economy. And the U.S. trade war threatens to shake things up in a bad way. But energy is a significant part of Canada’s economy. And the energy sector is experiencing rapid demand increases, which bodes well for the country. Also, the trade war can potentially create new and exciting opportunities and alliances with other parts of the world.
Clearly, there’s a lot of uncertainty. And stock markets don’t like uncertainty. All of this amounts to growing worry about an imminent stock market crash. But what if we focus on the long term?
What to do
In these situations of escalating uncertainties, risks, and pressures on the economy, the best thing investors can do is try to remain calm. Think of this through a long-term lens and stay focused on quality companies.
The stock market has lived through many crises. In the last 30 years, stock markets have survived different severe crises such as the 2008 financial crisis, the dot-com bubble bursting, and the 2020 pandemic. Actually, the market not only survived, but it has thrived through many stock market crashes.
Staying focused on quality companies means focusing on those companies that provide reliable cash flows, with a history of resilience and shareholder value creation. Companies like Enbridge Inc. (TSX: ENB).
Why Enbridge?
Enbridge Inc. (TSX: ENB) is one of North America’s leading energy infrastructure companies with a vast network of pipelines, utilities, and renewable energy assets. These assets have provided the company and its shareholders with predictable and growing cash flows and dividends for many decades.
In fact, Enbridge stock’s dividend has stood strong through all past crises. It has actually increased for 31 consecutive years. ENB’s annual dividend has in fact increased almost 1,600% to the current $3.88. This equates to a compound annual growth rate (CAGR) of an impressive 9.3%
Enbridge’s most recent results showed continued strength. This reflected the booming energy environment that is taking shape. In fact, the company is reaping the rewards of an energy industry that’s entered a growth phase reminiscent of the 2012–2015 growth phase. Growing production and infrastructure needs are expected to boost Enbridge’s cash flow and earnings in the years to come.
The bottom line
So, is a stock market crash coming? Well, if it is, Enbridge’s low-risk, utility-like business profile translates into predictable cash flows. This supports a reliable dividend even through a stock market crash. Therefore, we can expect Enbridge stock to be a solid investment for the long-term as it participates in the growth of the energy sector.
