Try Fund Library Premium
For Free with a 30 day trial!
Now we’re at the end of February, I look ahead to 2026 with trepidation. Anything could happen. We could experience a repeat of 2025, with stocks moving steadily higher. Or, at the other extreme, we could be hit by a bear market (loss of 20%+).
The last bear ran from January to October 2022 and saw the S&P 500 drop 25.4%. Historically, a bear market comes around every three and a half years, so 2026 would be right on target.
It may not happen, of course. Averages are just that – averages. But I suggest it would be a good idea to adjust your portfolio, just in case.
You can do this by rotating into stocks that are well positioned to ride out any storm with minimal losses, while offering upside potential if things continue to go well. Here are three that were recommended in my Internet Wealth Builder newsletter.
Walmart Inc. (NSD: WMT) is the world’s largest bricks and mortar retailer with 10,750 stores in 19 countries, plus an expanding e-commerce operation. It employs some 2.1 million people worldwide and had revenue in the latest fiscal year of $648 billion. On Feb. 26, 2024, Walmart split its shares 3 for 1. So, for every 100 shares you previously owned, you now have 300.
The year just ended was a choppy one for Walmart, but, overall, the stock trend was up, and the shares hit a new all-time high of $117.45 in December. The shares ended 2025 with a gain of about 25%. The stock is up more than 400% since the original recommendation, not including dividends.
The company released third quarter 2026 results (to Oct. 31) and they showed continued gains. Revenue was $179.5 billion, up 5.8% from the same period last year (6% in constant currency). Global ecommerce sales grew 27%. Adjusted earnings per share were $0.62, up from $0.58 in the third quarter of fiscal 2025. This does not include the gain of $0.20 per share on investments and $0.02 per share on legal matters. Free cash flow was $8.8 billion, an increase of $2.6 billion.
On Dec. 9, the company announced it had transferred the listing of its common stock and bonds to Nasdaq from the NYSE.
The stock pays a quarterly dividend of $0.235 per share ($0.94 a year) to yield 0.8% at the current price. The company repurchased 75.3 million shares in the first three quarters at a cost of $7 billion.
What happens when people are having trouble making ends meet? They search out cheaper alternatives. Who is at the top of the list? Dollar stores and Walmart. That’s why I think Walmart shares will continue to perform well in 2026. Financially-stretched consumers will keep coming because the affordability crisis isn’t going away soon.
Fortis Inc. (TSX: FTS) is a regulated utility that focuses on electricity and natural gas distribution. Based in St. John’s, Newfoundland and Labrador, it has operations in Canada, the U.S., and the Caribbean. The company had $73 billion in assets at the end of 2024. It has about 9,700 employees. The stock hit an all-time high of $74 in November.
Fortis reported third-quarter net earnings attributable to common equity shareholders of $409 million ($0.81 per share). Adjusted net earnings per share were $0.87, up from $0.85 in the third quarter of 2024. On a year-to-date basis and excluding the impact of the disposition of FortisTCI, net earnings increased by $114 million, or $0.18 per share, compared with the same period in 2024.
Fortis raised its quarterly dividend to $0.64 per share ($2.56 per year), effective with the November payment. The shares yield 3.6% at the current price.
Utilities like Fortis offer steady, sustainable cash flow. Plus, interest rate declines tend to push their share prices higher. Unless inflation surges in 2026, I think we’re likely to see more interest rate cuts, led by a new-look Federal Reserve Board with a Trump-appointed chair.
Royal Bank of Canada (TSX: RY) is the largest bank in Canada, with 23% market share. It is one of the 10 largest in North America. It has strengths in retail banking, investment banking, and asset management plus the largest share of mortgages and corporate lending in Canada. The stock ended 2025 with a gain of 35% for the year, not including dividends. Except for blips in April and July, the share price was on the rise for most of the year and is currently trading near its all-time high.
RBC reported its fourth-quarter and year-end results (to Oct. 31), and the results were impressive. Net income for fiscal 2025 was $20.4 billion, up $4.1 billion, or 25%, from the prior year. Diluted earnings per share (EPS) were $14.07, up 25% over the prior year. Adjusted net income and adjusted diluted EPS of $20.9 billion and $14.43 were up 20% and 19%, respectively, from 2024. Return on equity for the year was 16.3%, up from 14.4% last year. The CET1 ratio was 13.5%.
Royal Bank announced in early December that its board of directors has declared an increase to its quarterly common share dividend of $0.10, or 6%, to $1.64 per share ($6.56 a year). The new rate kicks it with the Feb. 24 payment. The yield at the new rate is 2.8%.
Bank stocks are not immune from meltdowns, as we saw during the financial crisis of 2007-09. But even during that tempest, Canada’s major banks remained profitable and avoided bailouts. Not one failed, or even came close. We should expect something similar if there is another bear market in our near-term future.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
Follow Gordon Pape on X at X.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
For more information and details on how to subscribe to Gordon’s newsletters, go to www.buildingwealth.ca/subscribe.
Notes and Disclaimer
Content © 2026 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
Image: iStock.com/Nopparat Promtha
Try Fund Library Premium
For Free with a 30 day trial!
Fund Library
