Kingdom Advisors equips Christian financial advisors to bring their faith into their practice with the industry-recognized Certified Kingdom Advisor designation. We bring those advisors together with other industry leaders to form a vibrant network. And through that network, we give them the resources, tools, and encouragement they need to serve clients like you, helping you align your values with your financial decisions and investments. To learn more, visit kingdomadvisors.com. Markets may appear strong as we head into 2026, but underneath the headlines, risks may be rising faster than returns.
Hi, I'm Rob West. Each January, we step back for a clear-eyed look at the year ahead. With a voice many investors have come to trust, Bob Dahl joins us today to walk through his 10 predictions for 2026. And then it's on to your calls at 800-525-7,000. That's 800-525-7,000.
This is Faith in Finance, biblical wisdom for your financial decisions. Bob Dahl is CEO and Chief Investment Officer of Crossmark Global, a leading faith-based investment firm. Each year, Bob helps us think through what may be ahead in the markets. And Bob, it is always great to have you with us. Happy New Year.
Thanks, same to you, many blessings, joy, peace, and all that goes with it. Yes, sir. Last year, you warned us about growing risks. Yet in several areas, the markets really proved stronger than many expected.
So Bob, as you look back to kick us off here, how do you think your twenty twenty five predictions held up?
Well, we did okay as you count them. Certainly at least seven out of ten. There were a couple of halves that you could push on either side.
Well, we conservative and say seven.
So that's a good number. It's along with our long term average. But I don't need the surface, Rob. If I had to do over again, I would have been more constructive on the year. Emphasized the building risks, which were accurate more than I should have.
And the reason is earnings. Earnings were off the charts. Again, Rob, corporate America has done a great job growing their earnings. And you've heard me say it before: as long as earnings are growing and the Fed is not unfriendly to the markets, stocks tend to go up. Yeah, it's the path of least resistance, as you've said many times.
So, with that context in mind, Bob, let's look ahead to 2026 and start working through your outlook. You've given this year's theme the title High-Risk Bull Market.
So, let's start with your first prediction, and that is related to the U.S. economic growth improving from around 2% to roughly 2.5% real GDP. Yeah. The point is it's going to be higher than it was last year. I have a feeling until the numbers are all in that twenty twenty five might actually be above two percent.
So add fifty basis points to whatever it is. Let's call it two point five. A lot of this has to do with the one big beautiful bill. Congress, the President, they know that there's a midterm election, and that's usually a time when they say, What can we do to make the economy do better?
So they vote for us back in office come November. And that one big beautiful bill, as you know, Rob, has lots of stimulus. Both for individuals and corporations, and that's a good thing for economic growth.
Well, there's no doubt that it is. You mentioned the upcoming elections, the midterms. Obviously, front and center in that is going to be this affordability question, and that really takes us to the next prediction. You're predicting that inflation stays sticky and shows little progress toward the Fed's 2 percent target. Yeah, we are of the view and have been, and this part's been accurate, that we're not going to get the 2% that the Fed wants.
Absent a recession, and we don't see a recession anytime soon.
So we think inflation will be closer to three than two. Which is not the end of the world, but you brought up the key word that's being used in Washington DC, and that's affordability. Yeah, maybe the bill for X, Y, and Z has only gone up two and a half or three percent. But you know what? It went up a lot in the years prior to that.
And so I can't afford it. There's the word. And I think there'll be a lot of political mileage there. It's hard for an administration to bring prices down. Yeah, prices are down at the gas pump and a few other places.
But by and large, we're stuck with the prices where they are. Let's just hope they don't go up further. Bob, is there any particular areas that are uniquely challenging in this economy where the administration can do some meaningful work, whether it's drug prices or housing affordability? Yeah, both of those. In terms of drug pricing, a lot of work being done.
Of course, there are massive lobbies against what some people would like to do in the health care area, which makes that all the more difficult. But we need health care reform so badly. We spend way too much money on health care, as you know, in this country, Rob. And I don't know what the answer is, but we got to get a meeting of the minds, and people need to go beyond their individual points of view. And housing is a whole nother one.
We need more affordable housing. And the kids are wanting to move out of the basement and get their own place. That's exactly right.
Well, we're going to continue to unpack Bob Dahl's 2026 predictions. Bob is CEO and Chief Investment Officer at Crossmark Global Investments. You can learn more at crossmarkglobal.com. We're grateful for support from Movement Mortgage, who provides residential home loans in all 50 states. Guided by a mission to love and value people and a goal to redefine the mortgage process, Movement seeks to help others achieve their financial goals.
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Well, each January, Wall Street expects to hear from Bob Dahl, our guest today, with his 10 predictions. This year is no exception. His 2026 predictions are out, and Bob is here to unpack them for us. Before the break, Bob was sharing that, first of all, the theme that he has for this year is a high-risk bull market. This market is priced for near perfection, and as long as corporate earnings continue, which he's expecting to see them continue to do well, we'll get into those in a moment.
And the Fed is not unkind to us. The path of least resistance is higher, but that does not negate the risk that is inherent to this market. Before the break, Bob, you shared your first two, and that is that we'll see real GDP about 50 basis points or one-half of 1% higher than 2025. That would put it at around 2.5%, maybe a little north of that. That.
Also, that inflation would remain sticky and not get to the Fed's target of 2%. Let's talk about the Treasury yield. First of all, why does the 10-year Treasury yield matter to investors? And then, what are you expecting for 2026? The 10-year is the bellwether, as you know, Rob, and we ended the year at 417, 4.17%.
And our guess is that it may drift a little lower and a little higher as the course of the year progresses. Call it the high threes to the mid fours, which is a pretty narrow range. We also think credit spreads, that is quality versus less quality, will widen somewhat. One of the mysteries to me of 2025 was how tight credit spreads were. You didn't pay a whole lot more to own a bond of a lower quality instrument than the U.S.
Treasury. Yeah. Bob, for the average investor who's in the bond portion of their portfolio, are you recommending they stay on the short to medium term duration and stay away from those long bonds? Yeah, we wouldn't go out too far, but we also recognize the curve is pretty steep. That is, up front you get very lower, low yields and you got to go out a bit to get higher yields.
So we have some out there in the ten-year range, would be fine.
So you can get some fours in your portfolio. Very good. Bob, let's move to the next prediction. You mentioned 2025 was a banner year for corporate earnings, corporations knocking it out of the park. Where are you expecting to see that in 2026?
Good again, Rob, but maybe not quite as good as the consensus was just looking for up 14%. I remind you that long term earnings growth in the U.S. is seven, seven percent to eight percent, fourteen double the Norman. We've had a few years like that. How many in a row can we have?
So we think earnings will be good, but maybe not great.
Okay, very good. Bob, as it relates to the market, and this is really the question everybody wants to know when you take everything you just said and distill it down, whether that's inflation, real GDP, corporate earnings, where does that leave us with how stocks will do in this upcoming year? Our best guess is stocks do okay. But okay doesn't mean you know another 20%. Our guess is that we won't have a double digit year.
Call it single digits. And if that's the case, that'll only be the third time in the last ten years that we didn't get a double digit growth. People are getting used to that, but that's not normal nor supported long term. You can only grow as fast as your earnings are in the long run. Yeah, no question about it.
Then the question is: where are those returns going to come from? And I know each year, as a part of your annual predictions, you really dial into the sectors of the market that you think are going to outperform and those that are going to lag. What are you expecting? Yes.
So AI and related is driving this prediction. Our view is that financials, which we like for independent reasons, technology again and communication services Outperform a basket of materials, consumer discretionary, and utilities.
So, in some sense, a bit more of the same. although materials stocks did well in 2025. Excellent. Bob, this one may surprise some listeners. You say in your ten predictions this year, you're expecting international stocks to outperform the U.
S. for the second year in a row. Tell us more. Yeah, if this happens, it'll be the first time in 20 years that international markets beat the U.S. two years in a row.
Global liquidity is strong. We're witnessing A change in the earnings comparison. Earnings growth in the US will be fine. But they'll be better than it was in 2025 outside the US.
So that gap won't be so big. Earnings growth in the emerging markets is especially good. And our guess is we'll get some more weakness in the dollar. All that points to international stocks doing better. And at underscore ROP, so many Americans have almost nothing overseas.
Yeah, I think that's a great point. Bob, and we'll get to this in a moment and talk more specifically about where faith-based investing is going ahead. But is it possible to invest in a faith aligned way outside the U.S. in the same way it is domestically? Yeah, great question.
It is, but it's much more difficult. Getting the information, getting the screening is a lot harder you can, but to repeat, it's not as easy as it is in the U.S. Over time, I suspect it will be. Yeah, I think it will as well. And we'll talk about where that whole industry is headed.
Let's dial into AI just for another moment here. Obviously, it's had a huge run. What are you seeing there just in terms of the real impact it will have in the near term on productivity and our economy? And then these stocks, are they just in a bubble territory, or do the revenues support it?
So, AI, I don't have to tell you, is for real. It is and will continue to make a difference. But we don't know how fast. And we don't know For sure, who the winners and losers are.
So, I think we're going to, as we saw in the back part of 2025, see a lot more volatility and unpredictability. We'll have big runs, and they'll be the best things in sliced bread, and then there'll be bums for a while, and they'll bounce around as people sort out what is AI, who are the winners, who are the leaders. Yeah, very good. Bob, we talked about faith-based investing. Last year was a banner year just in terms of the assets flowing into faith-aligned investments and new products, new world-class investment solutions.
And certainly that includes the investments you're offering there at Crossmark. It was a great year for faith-based investing. Does that continue? We think it does. You know, the simple line I use is, and you know this: more and more individuals.
More and more financial advisors, more and more institutions are wanting to line up their investments with their faith, with their faith, with their beliefs, with their values. And that takes this very little tiny part of the global markets and creates some increase. And if it increases this year, it'll be the 10th year in a row. Praise God. Yeah, that's exactly right.
Bob, your final, your tenth prediction is that Republicans retain control of the Senate but lose control of the House. Tell us more about that and the impact that will have on markets.
So, as you know, the Republicans have the presidency, the senate, and the house. When we have a midterm election, that usually is not sustained. If you look at the math behind it, our guess is the Republicans have a good chance, with fewer seats, of keeping the Senate. but probably lose the House maybe by losing 20 or 25 or more seats. That will make President Trump much more of a lame duck.
If accurate, that probably means the one big beautiful bill will be his signature legislation for his second term. Interesting.
Well, certainly there'll be a lot of eyes on that and a lot more for us to talk about in the days ahead.
Well, Bob, we always appreciate you stopping by and unpacking your predictions. I know it's going to be a great year either way, and I'm thrilled that you're going to be walking alongside us each week on this program. Thanks for your time, my friend. My privilege. Folks, markets may shift and risks may rise in 2026, but faithful, patient stewardship.
Remains the surest path forward. Bob is such a treat and a joy to us here on this program. You can learn more about Crossmark at crossmarkglobal.com. That's crossmarkglobal.com. Your calls are next: 800-525-7000.
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We're taking your calls at 800-525-7000, Minnesota. Diane, go ahead. Thank you so much. I sure appreciate your program and your amazing financial expertise at all of these matters.
So, my question is. in reference to um my husband and I um are Retirement agent, we have four different retirement plans. Three of them are through an employer, and the other one is through an a Vanguard IRAs.
So we are wondering it's total to around two hundred thousand. Is it wise to consolidate them? And if yes, is it wise to consolidate them into the Vanguard IRE. Yeah. Well, let's start with the first part of that first.
Yes, as you get close to retirement, in my view, consolidating accounts is almost always a smart move. It just makes everything, Diane, easier to track. Easier to manage and ultimately easier to withdraw from once you actually retire.
So I think it's a great move. Not to mention, it's easier to make sure that you have the right mix of investments because when you have multiple accounts and each have their own investments in them, you could end up not hitting the right target mix of investments that's appropriate for your age and risk tolerance just because it's a little harder to do when you've got to factor in the investments across multiple accounts versus everything being in one and being able to get, you know, see it all in one place, including how the various investments bucket out in terms of bonds and stocks and precious metals and other types of investments.
So, yes, I like the idea of consolidation.
Now, with retirement accounts, they have to stay individual.
So your 401k could go in your IRA, but your husband's 401k could not go in your IRA.
So you're probably going to end up with it at a minimum two. Accounts, but any of the accounts that are titled in your name could be consolidated into one.
Now, does it make sense to use the Vanguard IRA?
Well, Vanguard is a solid, low-cost provider. They have great index funds and excellent retirement tools. You know, they're one of the oldest in this space in terms of the low-cost providers. But I think that's really going to come down to Diane: how do you want to manage these funds? Are you all going to be the ones to make the buy and sell decisions?
And if so, You could use Vanguard, you could use Fidelity, you could use Schwab. Any of those would work. I think you really need to make the management decision first because if you decided to use an investment advisor, someone who would take discretionary investment authority over the account. Charged as a fiduciary, meaning they have to put your interests first. They have to understand your goals and objectives and risk tolerance and income needs and all those things.
But then he or she would make the buy and sell decisions for you.
Well, then they're going to want to open those IRA accounts, if that's what they are, at wherever they custody their clients' assets. And then you're going to roll everything over there.
So before you start consolidating everything in Vanguard, I would make that decision about whether you're going to manage it yourself or have somebody else do it. Does that all make sense? Certainly does. Thank you so much. God bless.
That was very helpful. Good. I'm glad to hear it, Diane. Out to beautiful Alaska. Connie, go ahead.
My husband and I are both seventy. My husband is retired and a cancer survivor. I am still working and probably will be for the next five years, maybe a little longer. And I We have been blessed to pay off our home, pay off our vehicles and now have a nest egg of about 350. Uh thousand two Two and a half of that is in C D's and the other is in cash.
And At this point, I don't I've not been raised around the kind of thing that you're talking about.
So I don't know anything about stocks or bonds or that type of thing. I'm just wondering if we should be taking any risk at this point or We should just go on with the money the way it is currently placed. Yeah. It's a great question. And ultimately, you are the steward, Connie, you and your husband.
And so before the Lord, you all need to make these decisions as to how you want to manage God's money. The benefit of investing is investing is ownership.
So you're owning real companies. And you know, those companies are providing goods and services for hopefully the good and flourishing of mankind, of others. It's a part of God's design. Business is what provides capital, or investment is what provides capital to business. And that's what it creates a virtuous cycle.
And bonds are essentially debt where you're being, you know, loaning money and they're paying you an interest rate. But in either case, you're putting God's money to work to be productive, hopefully in God-honoring ventures, and you get a return from that. And what that does is it accomplishes two things. Number one is there's a loss of purchasing power that's happening every day. You know, your dollar is under a mattress.
And maybe that's not where it is, but let's say it is for my example here. Because with inflation, and we could talk about whether or not there should be inflation, but there is. There always has been for, you know, and it's Getting it's higher than it has been in the last you know 20 or 30 years right now. With inflation, the purchasing power of your dollars are losing purchasing power over time.
So, one of the benefits of investing is you offset that by growing it, number one. And number two is you have something called a longevity risk, which is the idea that people are living longer. I mean, once you're in your 70s, as a 70-year-old woman living in the United States of America, you have a one in three chance of living to age 90. You have a one in 10 chance of living to age 95.
So we're talking about you, this money needing to last, you know, 20 to 25 years potentially or more.
Now, unless the Lord comes back, and then it doesn't matter. But if he doesn't and he has a plan for you here, that could be well into your 90s. And so you can still take a long-term perspective, even in your 70s.
Now, at 70 years old, what would be the right mix of investments?
Well, as a starting point, and that's all it is, it would probably be this idea that you'd put 20 to 40% in stocks for some growth. And then you'd put the balance, call it 60 to 80 percent in bonds or cash for safety and income. And in that bond portion, maybe you'd add in a little bit of precious metals and maybe even some real estate through a real estate investment trust, which you can buy and sell like a stock. But that would be, generally speaking, what's considered a properly diversified portfolio, where you take what God has given you, you'd have a portion of it that's growing to offset that longevity risk and inflation. And then you'd be generating some income in the bonds and cash portion, and you'd still be relatively safe.
So even if the market was down 20 or 30 percent, your portfolio might be down five to ten percent. Does that make sense? It's beginning to.
Okay, here's what I want to do. I'm going to send you a book called The Sound Mind Investing Handbook. And maybe you and your husband sit down and read it, think through it. And the other option is you could connect with a certified kingdom advisor, and we have some great ones in Alaska. Hang on the line, we're going to get your information.
I'll send you that book. Taylor, Tehera, Josh, and Dan, the amazing team today. We'll see you next time. Faith in Finance is provided by Faith By and listeners like you.
