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By Mark Seed, myownadvisor
Special to Financial Independence Hub
Inspiration for this headline this week came from a Globe and Mail article.
For those without the subscription like I have, here are the key ways to navigate any stock market bubble that might be forming.
Curious to get your thoughts on what you are thinking about and doing as we head into 2026 …
1.) Cut back on dividend reinvestment plans/DRIPs. In doing so, you are raising your cash/cash equivalents pile. (I have been doing that since 2024.) From the article: “Rather than purchase more shares at these possibly elevated prices, I will accumulate some cash and deploy as opportunities present themselves,” one reader said.”
2.) Trim individual stock holdings. While holding individual stocks can be amazing for income and growth, I know they also expose me to some concentration risks: company or sector risks. So, to avoid that, I can trim individual holdings and simply index invest: instead. From the article: “I have felt a U.S. equity bubble has been forming for over a year now. In January, I decided to sell all my individual U.S. stock holdings and move the funds into my S&P 500 ETF,” one reader said.” (Yup, see link below, what I have done.)
3.) Hold more cash. Aligned to #1, and have done this as well. We’re about 90% equities and 10% cash/cash equivalents entering retirement in spring 2026. I may even increase my cash allocation from here since almost all DRIPs are turned off for cashflow now…
What approaches are you taking? Other steps? Happy to read and learn more…
Surviving a Recession
These tips are not unlike surviving a recession, if one were to say, happen, in 2026.
Some sensible advice in this MoneySense article on moving your RRSP to a RRIF. I already used these basics years ago when establishing my parents RRIFs for them.
- Consider “bucketing” to manage withdrawals: Set a portion of your RRIF aside in something with no or very little risk that can be used for withdrawals. That way, the advisor suggests “…if the overall market takes a downturn, clients aren’t forced to sell investments at a loss because they need the cash.”
- Consider funding the TFSA with unspent money: “Just because you are taking the money out of a RRIF account doesn’t mean you have to spend it.” Yes, correct. This is why I set up my parents’ RRIF withdrawals, annually, early in the year: so whatever they don’t need to spend from their RRIF each year can go directly to their TFSAs, where money can continue to grow tax-free for any longevity spending or other emergency needs down the line.
Simple concepts that can also apply to RRSP withdrawals too for any early retirees…
New tax numbers were released for 2026. Here are the facts:
- TFSA – the contribution limit will remain at $7,000 for 2026. I anticipate the room will be $7,500 in 2027. We intend to MAX out our TFSAs in January 2026.
- RRSP – the contribution limit for 2026 is $33,810, up from $32,490 in 2025. Mind you, the amount you can contribute to your RRSP in 2026 is limited to 18% of your 2025 earned income, which includes (self-)employment and rental income, up to the RRSP dollar limit of $33,810, plus any unused RRSP contribution room from 2025, subject to any pension adjustments. My wife has no intentions of contributing to her RRSP now that she is retired. 2026 might be the last year I contribute to my RRSP to reduce my taxable income…
- OAS – If you receive this benefit, the OAS repayment threshold / clawback amount is set at $95,323 for 2026, meaning that your OAS will be reduced in 2026 if your net income is above this amount. Probably a very good thing: this OAS program needs to be severly overhauled.
- CPP – employee and employer (CPP) contribution rates will remain at 5.95%, but the “year’s maximum pensionable earnings” (YMPE), which is also called the “first earnings ceiling,” will increase to $74,600, while the basic exemption amount remains at $3,500. This increase was calculated in accordance with CPP legislation, and takes into account the growth in average weekly wages and salaries in Canada. The self-employed CPP contribution rate remains at 11.9 per cent, and the maximum contribution will increase to $8,460.90. Of course, if you take dividends from your corporation, there are no CPP contributions required. (Things I think about for 2026 too…)
“The core problem today is a power gap, not just a knowledge gap. We do not suffer from a shortage of information. We suffer from a shortage of tools — and rules — that allow ordinary consumers to turn information into good outcomes in a system designed and priced by others.”
“You do not need to derive the compound-interest formula to understand that a product charging 2% more in fees every year will likely leave you dramatically poorer in retirement. You do need a clear picture of your likely long-term outcomes with different options, a way to compare those outcomes reliably, and the ability and confidence to act.”
“In household finance, we have spent decades focusing on training and comparatively little on redesigning the cockpit or modernizing the control tower.”
Well said.
Interesting research and older post from my friend, Dividend Growth Investor, stocks that leave the Dow Index tend to outperform.
Mark Seed is a passionate DIY investor who lives in Ottawa. He invests in Canadian and U.S. dividend paying stocks and low-cost Exchange Traded Funds on his quest to own a $1 million portfolio for an early retirement. You can follow Mark’s insights and perspectives on investing, and much more, by visiting My Own Advisor. This blog originally appeared on his site on Nov. 29, 2025 and is republished on Findependence Hub with his permission.
