It was a tumultuous week for the U.S. markets. And it’s been a wobbly 2026. U.S. stocks are down over the last week, month and year-to-date. Of course, Canadian and International equities greatly outperformed the U.S. market in 2025. The U.S. Dollar has been in ‘free fall’ as well. We keep hearing about the ‘great rotation’ out of U.S. equities and more specifically out of U.S. AI and tech stocks. We don’t know if this trend will continue. And the answer will once again be diversification and a well-balanced global portfolio. I have been slanting to U.S. value and Canadian defensive equities. And now thanks to some very quick and robust price moves, some of of the assets are starting to take off, and take over portfolios. What to do about your stocks that are flying high? Let’s take a look.
As always, this post is not advice. Think of it as information and ideas that might shape your investment approach.
2025 stock recap
Here’s a quick refresher on 2025, in Canadian Dollars.
And to be fair, nothing drastic has happened in 2026. It has simply been choppy.
And yes, we continue to see a move away from U.S. and big tech stocks. And we are seeing some evidence of a sector rotation. Over the last month …
Defensive equities (consumer staples and utilities) are in the top 4, as energy rules. The flight to gold as a safe haven continues to drive the materials sector.
Isabelnet takes a look at sectors and historical valuations …
Now before we go to far into how I’ve shaped our personal portfolios, keep in mind that core and traditional risk management has ‘done its thing’ over the last couple of years, as per usual.
The beauty of a global asset allocation ETF is that they are managed portfolios and the rebalancing is done for you. The risk management is part of the package. Those global portfolios trimmed the high flying U.S. equities pre-2025 and moved profits to the Canadian and International equities. They’ve got you covered.
It’s almost as if these passive global portfolios knew what was coming ๐
The defensive tilt is on the move
Nice to see some engagement on a few portfolio Tweets this past week …
And here’s how it’s helping my wife’s Canada RRSP …
The pipeline and utilities are helping the cause and so is the captain of team defensive equities, the Canadian Consumer Staples …
Investors are filling up on defensive equities. iShares XST is up 7.43% over the last month.
And a look at my Canadian RRSP …
What to do about your stocks that are flying high?
TC Energy is up 14.6% and Enbridge is up 12.6% over the last month. As a pure play natural gas and power producing stock, I put most of my pipeline reinvestment focus on TC Energy. Again, it is now over 8% of my total RRSP portfolio weight.
I wrote about TC Energy and the liquids spin off in August of 2023. I sold the South Bow and stuck with (and reinvested in) TC Energy. The stock is up 130% from the time of that post. If you have extreme confidence in a stock you might ride it at these levels. But there comes a time when some trimming is in order. There can be too much concentration risk, that brings individual company risk.
Creating retirement income
This will be a pleasurable task. I will set some limit sale orders.
I might set the first sale at $88.00. That means, when the stock hits $88.000 and I’ve entered 50 shares I’ll see $4,400 land in the account (minus any trading fee). Perhaps there is another 50 shares sold at $95.00, watch another $4,750 land in the account. And so on, and so on. I can keep the stock near 8% of the portfolio, or I can decrease the weighting allowing for even greater income creation.
Learn about defensive equities at Retirement Club
While I don’t mind seeing dividends pour into an account, selling shares might be even more satisfying. Keep in mind that there’s no difference between a dividend and selling shares to create retirement income. They both remove or harvest value in the same manner. The risk is no different. Dividends do not protect you from sequence risks, vs selling shares at equal amounts.
In a taxable account you might take advantage of the Canadian dividend tax credit if it works in your favour. But don’t let your portfolio asset allocation get bent out of shape in the process.
Walmart, recession proof?
Another good problem is Walmart (WMT). It has performed so well.
I bought Walmart in 2015 and made a few meaningful adds. It is also 8% of my total RRSP. Once again, a very nice problem to have. You can guess the answer. I’ll put in some limit sale targets. Welcome to Walmart retirement income creation.
During times of robust market returns it’s fun to watch the share sale proceeds pour in. You might have limit sales on several stocks and ETFs, you forget all of the details of course, and you see the pleasant surprise of increased cash amounts in your discount brokerage. Dividends pour in, share sales pour in.
If you’re in retirement, you might move proceeds to cash and bonds to protect short term spending needs and keep your portfolio risk level in check. You might also move some of the proceeds to other stocks and equity ETFs.
More related reads:
- We saw the defensive stocks take on the tariff war in early 2025.
- Playing defense with Canadian utility stocks at ETFs.
- Slanting to more U.S. value stocks.
- Here’e when to rebalance your stocks in retirement and in the accumulation stage.
Happy rebalancing and share harvesting.
The Sunday Reads
At Findependence Hub, via Bob Lau of the Tawcan blog – 10 lessons I’ve learned from 25 years of investing.
And at Dividend Hawk a look at his portfolio for the week. Yes, Hawk is onto this Canadian pipeline thing …
There’s a bevy of earnings summaries in that post.
At Retirement Manifesto and as per Dana Anspach what an all-weather plan looks like.
At Stocktrades Dan looks at a favourite small cap stock, Cargojet …
GenYMoney opens the book with – How to retire happy, wild and free.
At Well Built Wealth, don’t let Ottawa claw back your OAS payments …
More on ‘rich people’ problems. If you’re in the highest tax bracket, does planning even matter? …
And I added this to the Retirement Club inspiration zone …
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In the past, I have trimmed my big winners, such as Manulife. At the time (mid 2024), I sold a portion to buy into Emera. Iโm happy with the diversification but in reviewing performance, I would have been better off holding MFC.
Today, my current big winner is ARE sitting at 12+% of the portfolio (it has doubled). I think it has legs yet – another 30-40%. I will trim once it gets up there. Looking at GEI and CU as potential replacements.
Strategically, I tend to prefer holding onto my winners, so long as I remain confident in their futures.
Thanks James. When we self direct it is certainly a personal decision on weights and ‘letting them run’.
Thanks for sharing your experience.
Dale
Because I’m getting really old in 2024 I sold some stocks where I had significant capital gains. I wanted to be more conservative but my 2024 income took a jump. My OAS has been clawed back to low double digits and the CRA is wanting a huge increase in quarterly payments. My income for 2025 will be much lower. I think in July I’ll get some OAS back, and I’m not going to give the CRA all they’ve asked for.
Hi John, it’s a difficult trade off at times, I’d guess, to manage capital gains as we manage risk. All said, best to use a Retirement cash flow calculator so that we can help ourselves out. At Retirement Club I’m mostly using the mayretire.com calculator.
Check it out. Or perhaps you have a cash flow plan from an advisor?