And while there are many voices on Wall Street and elsewhere who continue to tout 2026 as a likely extension of this ongoing bull market, the reality is that some cracks are visible beneath the surface. Whether we’re talking about geopolitical concerns, changing trade policies, or slowing job growth in major economies around the world, some signs point to a potential bear market starting in 2026.
For those looking to protect their portfolios against such risks, here are three ideas on how to weather a potentially volatile year.
Hydro One
Overall, I am very bullish on the utility sector as it can not only survive but thrive in a market downturn. Hydro One (TSX:H) is one way to capitalize on such trends in the Canadian market.
Focused on the eastern Canadian provinces, Hydro One has experienced solid growth in recent years. The balance sheet remains robust, and with a current yield of 2.5% (lower due to strong capital growth in recent years) this is a dividend stock that is starting to look like a growth stock.
Don’t get me wrong, I think Hydro One probably still has plenty of growth potential. That’s partly because I think Eastern Canada could be where a lot of data centers will eventually be built, which could provide a much more robust revenue and profit growth trajectory for the company over time.
But it’s this company’s ultimate cash flow stability and dividend growth profile that stand out to me as reasons to own this stock long-term. At any meaningful dip in 2026, I think Hydro One stock is a screaming buy.
Food Couche-Tard
Another defensive stock I’ve touted as a value strategy in the past: Food Couche-Tard (TSX:ATD) appears well positioned to ride any negative bear market headwinds to highs.
If capital starts to move into more defensive parts of the economy, I think a case can be made that it makes sense to owe Couche-Tard stock. After all, the demand for petrol stations and purchases in local shops will not decrease significantly in times of recession. We have seen how this dynamic has played out in the past.
With a dividend yield of 1.2% and a price-to-earnings ratio of just 18 times, I still think ATD stock is cheap here, even after the rally in recent years.
Enbridge
Another company with a business model that has little to do with the overarching macro background is Enbridge (TSX:ENB).
Shares of this leading North American pipeline company have been on a slump in recent years, rising to levels near all-time highs when oil prices peaked in the mid-2010s.
That’s impressive considering that was the last time interest in pipeline growth was prominent. Today, many of those same tailwinds are once again at play.
So from a dividend perspective (an impressive 6% yield is reason enough to own this stock) and growth tailwinds, I think this is a stock that can grow despite any short-term market turbulence we may encounter in the coming year.
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