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Why the market is never wrong, a milestone for the S&P 500, and seven dividend ETFs to consider

The bull statue in the Financial District near the New York Stock Exchange in New York. Eight years into the current bull market and no existential crisis plagues this advance.

Daniel Acker/Bloomberg

When I first got a trading floor job, the phrase repeated most often to me was 'Market's never wrong." This was an only slightly more polite way of saying "Market isn't wrong, you are."

This was the mid-1990s with the technology bubble in full swing, and the catalyst for being told this was usually me saying "this is insane, these stocks can't go up anymore." But as it turns out, they could - and they did - for a long time.

Eventually I learned that the market can be wrong for periods of time but these occurrences are rare. I'm grateful for having this phrase drilled in to my head. At the novice stage of investing, it's common to make pronouncements and generally get over-confident. "Market's never wrong' is a reminder that there's always more to be learned about investing, and when volatility is hard to explain it's far more likely we're missing something, and there's more books to be read, than the market is wrong.

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-- Scott Barlow

Stocks to ponder

Sleep Country Canada Holdings Inc.
The company - a huge success in the stock market since its initial public offering in 2015 - will soon be stuffing mattresses into boxes and shipping them to online customers anywhere in the country. Investors should hope that the new bed-in-a-box venture fails to gain much traction, writes David Berman.

Birchcliff Energy Ltd. This company that appears on the negative breakouts list. Long-term investors may want to put this stock on their radar given the recent price weakness, writes Jennifer Dowty. There are 15 "buy" calls on the stock with the Street forecasting a potential gain of 86 per cent over the next year.

Open Text Corp. This company is getting close to technically breaking out to the upside, writes Jennifer Dowty. The company is an industry leader with robust earnings growth forecast. The stock has 14 'buy' calls and the chairman of the board of directors has been accumulating a large number of shares, writes Jennifer Dowty.

The Rundown

The bull's bittersweet birthday

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The bull market entered its ninth year on Thursday. Despite the 250-per-cent gain in the S&P 500 over that period, the market gains that followed the Great Recession were met with deep skepticism and small-investor fear of a setup to another meltdown. We look back at the forces that have defined this unloved bull market. Tim Shufelt reports.

Top 10 reasons to be cautious on equities

Valuations are stretched, margin debt is surging, and complacency abounds. And that's just for starters on why the market could be due for a pullback, writes David Rosenberg.

The week's most oversold and overbought stocks on the TSX

There are 12 index members trading below the buy signal of 30 making them oversold and technically attractive according to the Relative Strength Index, writes Scott Barlow.

How to plan for potential changes to capital gains taxes

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There's been much talk about the possibility that the Liberal government will increase the capital gains inclusion rate in the federal budget to be tabled March 22. Currently, just 50 per cent of capital gains are taxable, but some believe the rate could increase to 66.67 per cent or 75 per cent. (The latest indications are that the more significant tax changes by the Liberals will come at a later date.) It raises the question: Should you sell an asset with an accrued capital gain before the federal budget, to take advantage of today's 50-per-cent inclusion rate? Perhaps, writes Tim Cestnick.

Here's how rising yield will bite into dividend stock returns

Jeffrey Gundlach is the founder of Doubleline Capital and manager of the firm's Total Return Bond Fund. Barron's magazine dubbed him the King of Bonds in 2011 and Mr. Gundlach is now arguably the world's most credible voice when it comes to interest-rate and bond yield forecasts. Mr. Gundlach's current outlook is not good news for Canadian dividend and income investors, according to Scott Barlow.

Is it time to take profits – or stay put? A contrarian suggestion

One quick look at today's frothy stock prices is enough to suggest it's time to run for cover, writes Ian McGugan. So why are investors doing exactly the opposite and rushing into an eight-year-old bull market with mounting enthusiasm? You can blame their high spirits on irrational exuberance or on a severe case of Trump-induced euphoria. But a more profound reason is that it's tough to know exactly when to get out of stocks – especially at a time like now when the miserable yields on bonds offer no obvious alternative and the global economy is showing signs of strength.

The good – and bad – of seven Canadian dividend ETFs

Like the idea of dividend investing, but don't feel comfortable picking individual stocks? Dividend exchange-traded funds might be just the ticket. They provide instant diversification, are cheaper to own than dividend mutual funds and some – though, as you'll see, not all – dividend ETFs have outperformed Canada's benchmark stock index. To help you navigate the increasingly crowded dividend ETF field, John Heinzl discusses the pros and cons of seven different ETFs.

A defensive portfolio that has fared surprisingly well over the last 6 months

No portfolio works ideally in every situation. In a rapidly expanding market, such as we have experienced since the Trump election, growth stocks are the place to be. But during times when markets are soft, a defensive portfolio will best protect your assets. You have to decide what type of investor you are and stick with the plan you've chosen, writes Gordon Pape. Having said that, the Defensive Portfolio fared surprisingly well during the latest six-month period, despite the downward pressure on bond prices and on some low-risk stocks. Our two bank positions generated good gains, as did our holding in Canadian Tire. As a result, we came through a tough period for defensive investors with a decent return.

Trump seems to be losing his ability to scare biotech

For much of the past half year or so, President Donald Trump was the biotech bogeyman, set to impose draconian price curbs and crush industry profits. His fear factor is rapidly diminishing.

Can't fake it: U.S. media stock rally is headline news under Trump

The media under Donald Trump: fake, dishonest -- and on fire. At least in the stock market, where purveyors of newspapers, cable television and websites are some of the best performers in a broad market rally that itself is already front-page news. Deal making and speculation that the new president will dismantle regulation is blotting out the group's bad press -- among investors, anyway. Even short sellers are evacuating.

Research Reports

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Ten Canadian dividend stocks with plenty of excess cash

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Compiled by Darcy Keith

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