This is the time of year when investors start to feel all warm and fuzzy and invincible, buoyed by sunny brokerage forecasts that read like they were concocted on a Tahitian beach with an umbrella drink in one hand.

Which means it's time for us to cover our eyes, plug our ears and take our grumpy pills.

Remember, irrational exuberance can be fatal to your investment portfolio.

The culprit to blame for the intoxicated state of the Canadian investor is a raging bull run that gave the S&P/TSX Composite index a boost of more than 20 per cent in 2005. If the bull has made you complacent and cocksure, it's gut-check time. Just when you start feeling comfortable, the stock market has a nasty habit of delivering a stinging punch.

Here are some of the characters you need to watch out for as you prepare to tiptoe through the landmines of the stock market.

* Used car salesmen with green ties masquerading as stockbrokers.

Some stockbrokers are not looking out for their clients' best interests. They're paid to pitch their brokerage's products and get paid when you buy and sell.

When the broker makes a pitch, ask questions - such as whether or not his firm is underwriting the company he's recommending. And if you're broker today than you were a year ago, give your broker a buy signal. As in goodbye.

* Cheerleaders masquerading as analysts.

If you think the outcry over Wall Street's conflicted and disgraceful research has made it safe to read a research report, think again. Even five years after the dot-com crash and Henry Blodgett, who was the poster boy for cheerleading analysts, buy recommendations still dominate and most analysts are still afraid to yell "sell.

Sell is still a four-letter word on the street.

Henry Blodgett is gone but now we have somebody named William Morrison, the JMP Securities analyst, boosting his target price for Google (Nasdaq:GOOG) from $400 to $575 US.

Shares in the Internet search engine have already soared from an $85 US initial public offering price in August of '04 to its recent price of $432 to trade at a gaudy price/earnings multiple of 95.

Not one of the 22 analysts who cover Google has a sell rating on it. There are 16 buys and six holds. Shades of 1999. Sis! Bam! Boom!

* Permabulls.

One of the best bets on Wall Street is that the high-profile strategists will forecast an annual return for the S&P 500 index in the 10-per-cent neighbourhood.

Why? Because it's good for business.

The news reports have been trumpeting the forecasts of crystal ball gazers with broken crystal balls as if they really had some meaning. Most strategists, including one-time star Abby Joseph Cohen, are as bullish as ever. Cohen, the Goldman Sachs strategist who remained bullish on technology even as it peaked to absurd levels in early 2000, is predictably calling for the S&P 500 index to hit 1,400, about a 10-per-cent increase.

She also forecast a 10-per-cent upside for the S&P 500 for 2005 and it could only muster a gain of about four per cent.

Edward Keon, strategist with Prudential Securities, is one of the most bullish pros, forecasting the S&P 500 to reach 1,530 for a return of more than 20 per cent.

The convenient buzzword of the strategists and analysts these days is relatively, as in "relatively cheap market."

Which begs the question: Relative to what?

* Showboating fund managers.

Many fund managers seem to make outrageous calls just to draw attention to themselves and their funds.

During a guest appearance on Report On Business TV's Market Call program last year, Brian Acker of Acker Finley Asset Management predicted that his grandchildren wouldn't see a $500 US gold price.

If you sold your gold stocks after listening to Acker, you're probably not one of his fans. The gold price seemed to take a cue from his remark, rocketing to $500 and beyond soon afterward.

Acker also said income trusts were "toast" just days before the sector began its robust comeback late in the year after Ottawa backed off its tough stance and threats to revamp the tax structure of trusts.

* Underachieving fund managers.

Many people are too lazy to even do the simplest math, comparing their mutual fund results with the performance of the market indices. If your fund company underachieves against the indices, you need to ask yourself the reason you're paying that management expense ratio.

And if your Canadian equity fund shows a negative return after last year's hot market, you really need to take a reality check.

One Canadian equity fund that has managed a negative return during the recent bull market is the Brandes Canadian Equity Fund, which charges a management expense ratio of 2.7 per cent.

This Brandes Fund, one of a series of funds managed by Brandes Investment Partners & Co., was down 1.3 per cent through Nov.

30, a period in which the S&P/TSX Composite index was up 24 per cent on the strength of energy stocks. The fund's three-year performance is much better with an annualized return of 7.5 per cent.

The Morningstar investment site lists among this fund's top holdings TSX technology busts such as Nortel Networks (NT), Sierra Wireless (SW) and JDS Uniphase (JDU).

The Morningstar profile of the Brandes Canadian Equity Fund doesn't list a fund manager, but states that the fund uses a team approach.

Considering how the fund has underachieved, investors might want to ask the company to explain that team philosophy.

* Over-zealous talking heads.

Many of these characters can be found at CNBC. The obnoxious tout, Jim Cramer, has become a hero of American investors through his Mad Money program in which he has made some stellar calls when he isn't throwing chairs to get your attention.

If you want to see what Cramer is made of, pay attention to his performance in a bear market that tends to bring the blowhards back to earth.

* Penny stock promoters.

They circulate on the Internet like cockroaches in a seedy Mexican dive. More often than not, the easy money has already been made on their "hot" tips. They will tell you about their 1,000-per-cent gainers, but usually forget to mention the stocks that are down 99.9 per cent.

Be particularly wary of the pumping of those stocks that trade on the U.S. Over The Counter Bulletin Board (OTCBB) or the wild-west U.S. Pink Sheets exchanges where the trading patterns are stranger than fiction.

SAGE WORDS: "I don't care how hard we brokers try, we have a conflict of interest with our clients. I'm no exception."

- One-time U.S. broker Ray Dirks in his investment book, Heads You Win, Tails You Win.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)