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The intermediate-term trend in emerging market stocks remains down, and we continue to advise a substantial degree of caution. At the same time, the fact that the indexes (both emerging markets and domestic) have been able to hold above their February lows means there’s a chance that a renewed advance can begin at any time. But we won’t predict; we’ll just follow the market’s lead, while keeping you apprised of the action in the highest potential emerging markets stocks we can find. Today we add another name to the watch list; it’s an old friend that just hit a new high a couple of days ago.

The marijuana sector peaked in February, bottomed from late March to mid-April, and since then has been building a base, preparing for a resumption of the big advance.

Fundamentals in the industry remain terrific, as second quarter results have recently revealed, and the trend toward legalization in the U.S. continues, so it’s only a matter of time before these stocks enjoy their next upwave.



In the portfolio today the one small change is that I’ll downgrade Columbia Care (CCHWF), our biggest loser, to Hold.



Full details in the issue.

The bull market remains intact, so I continue to recommend that you be heavily invested in stocks that help achieve your investing goals.

Today’s featured stock is a solid grower whose products help millions of people with diabetes manage their condition in increasingly efficient ways.



As for the current portfolio, most of our stocks look good, and some are hitting new highs, but one has to go and the victim this time is Driven Brands (DRVN).



Details inside.

The market rally is sputtering. The near-term direction of stocks is highly uncertain. But we might have a much better idea of where things are going by the end of this week.

*Note: Due to the New Year’s holiday, there will be no Cabot Dividend Investor update next Wednesday, December 31. I will be back with our next weekly update on Wednesday, January 7. Have a safe and happy holiday season!

Another strong year in the market is closing out. The S&P 500 is up over 17% for 2025 with about a week to go. This follows two straight years of 20%-plus returns for the market in 2023 and 2024. That’s the best three-year run this century.

Of course, the upside has been overwhelming due to technology. Without that sector, market returns would be rather lame. Now that technology is sputtering, what can we expect in 2026?

After beautifully navigating the historically troubling months of September and October, stocks are off to a dicey start this month. While the S&P managed to close slightly higher on Monday, most stocks had a rotten day. The index was propelled by technology while 400 of the 500 stocks moved lower on the day. On Tuesday, technology sold off and almost all sectors were lower. Is this a hiccup or a harbinger?

This is one confusing market. It’s doom and gloom one day and then optimism the next. Investors can’t seem to make up their minds about whether the world is going to Hell in a handbag or it’s time to buy. What’s going on?

Last week was confounding to say the least. Two events promised to address the market’s chief concerns: the sustainability of the AI trade and the state of the economy. Last week’s earnings report from the ultimate AI bellwether Nvidia (NVDA) and the long-awaited jobs numbers could answer both questions. Both the earnings report and the jobs report were everything investors could have hoped for. Stocks tanked anyway.

Since the effective federal hemp-derived THC ban was approved in the latest budget deal, cannabis investors have taken the change as a sign the Trump administration is no longer serious about rescheduling.

This is probably wrong. Cannabis sector CEOs closer to the rescheduling process than most investors think the sector-changing reform is still on track.

Welcome to 2026! The new year promises more good returns and a broadening rally.

The S&P 500 was up over 16% in 2025 after back-to-back 20%-plus return years in 2023 and 2024. It’s been the best three-year run of the century so far. But the future is what matters now. And the market seems pricey after all these good years.

The broadening market rally has been usurped by the return of tariffs, at least for now.

The market is unnerved to start this week after President Trump threatened the European Union (EU) with additional tariffs and the EU is threatening retaliatory measures. The issue caught investors by surprise and is threatening to derail the ascending market.

It’s time for all investors to obsess about the Fed again. The Central Bank has its March meeting this week and Wall Street is on pins and needles waiting to hear what they might vaguely insinuate.

The cannabis sector has been trending down since the end of March, giving back its spectacular gains from the start of the year, and until now I’ve remained optimistic about our stocks, partially because of their outstanding fundamental growth metrics but also because Cabot’s two main trend-following indicators for the market were positive.