Know What You Own: Markets, Crypto, and the Economic Outlook for 2026

In part two, Wade and Gary cover the crypto debate — including the NYSE's push into tokenization — and why Gary still swears by "if you can't explain it, don't buy it." They also break down the 2026 economic outlook: consumer sentiment, the real wage squeeze, and what tax policy could mean for growth. Gary shares his S&P forecast, his biggest risk scenarios, and three key takeaways for investors heading into the year. A clear-headed, process-driven conversation for anyone looking to cut through the noise.

Transcript

Introduction and Market Overview

SPEAKER_01 0:00

Views expressed are solely those of the speakers and do not represent the show on the state. You know, if you can't explain it, don't buy it. And that kept us from buying a lot of awful things that other companies were buying. Columbia fashion made a I believe in the middle of the manager. And it's hard to imagine a scenario where stocks go down when corporate profits are going up.

SPEAKER_02 0:31

Welcome back to Built to Last Conversations about wealth, work, and life. Gary, we're gonna jump right into part two. We got a little winded on the last one, but a lot of good information. And I'll be honest with you, time went by really fast for me.

SPEAKER_01 0:46

You know, once you get me started, Wade, it's it's uh it's hard for me to stop. You know, I just love this stuff so much, I guess. Can't keep uh can't keep my mouth shut.

SPEAKER_02 0:55

Well we'll keep we'll keep it going here, we'll keep it flowing. So let's dive right in. I'm sure by now you've got an asset class for for uh digital coins, right? So what what is it and explain it to me because uh last time all I heard was it was uh something that uh nobody knew how to define where it's supposed to fall. Is that where we're at still?

Understanding Bitcoin and Digital Coins

SPEAKER_01 1:18

I think that's where I am still. I I still have no idea why Bitcoin exists or what its utility is or or how it's supposed to, you know, uh, you know, revolutionize finance. Um uh you know, I I don't get it. I guess I guess that's that's one way to put it. I I I don't get it. Um uh and and uh I guess that goes for all the other you know coins that are out there as well for me. Um and and I go back to, and maybe this is wrong now. Maybe I need to go back and and ask the question again, but but I used to ask companies all the time, um, you know, CFOs of companies, you know, how are you using um uh you know tokenization in your in your business?

SPEAKER_02 2:13

Well, how are you using blockchain? But before you talk about that, I need to so what about that just happened. The New York Stock Exchange just announced their tokenizing. I mean, so so how do you feel about that? Because that's kind of where I was gonna hedge you down, put you in that rabbit hole because uh I mean, are we at a point where we have to figure this out? I mean, I I think it's getting close.

The Significance of Tokenization and NYSE Moves

SPEAKER_01 2:37

I I don't know. And um I I probably need to do a little bit more research on on that particular aspect of it. There's definitely a lot more gamification of the markets, right? Which I I don't think is particularly healthy. Um uh because it's not a game. Right. When when you when you lose all your money, you lose all your money. Um zeros.

SPEAKER_02 3:06

I think that has a little bit to do with, you know, certainly you know, I'm gonna call it digital coins, let's whatever you want to call it. I don't want to use a paraphrase like Bitcoin because that's that is just one of those digital assets, right? So, but let's talk about crypto and let's talk about the things that we're seeing again, New York Stock Exchange, supposed to be that's supposedly, I think I read integrated in 30 days or something. Or you know, that's that's pretty big because that capital moves immediately, right? That act that that change that that there's a lot of leverage that gets removed in that process, in my view. And how do you how do you see it?

SPEAKER_01 3:48

I guess if it is a way to reduce transaction costs and a way to reduce uh friction in the system, that's a that's an economic good.

SPEAKER_02 4:01

And that's what they're touting, right? From the beginning, that's what they're touting. But what are the downsides too?

Risks and Downsides of Digital Assets

SPEAKER_01 4:09

I don't know enough about it to know exactly what the downsides might be. Um but I think I think as long as as long as there's a paper trail, uh not necessarily a paper paper trail, but there's there's the ability to reconcile where where these transactions originate and where they're going, um I think I think that's fine.

SPEAKER_03 4:34

Right.

SPEAKER_01 4:34

Because there's always bad actors. If we get to the point where it's too anonymized, um uh, you know, then then we don't have controls in place to ensure that bad actors aren't aren't um are involved in it.

SPEAKER_02 4:51

I agree. I just I think it's I think it's exciting. I mean, digital assets is a growing, you know, a growing class, so to speak, you know, and I think obviously my crypto experience has been somewhat limited. I still I buy it. I I look at it as a long-term, you know, hold and don't really have a reason that I'm doing it other than it's another, you know, it's something that I can use when I need to. And I have

Personal Investment Views on Crypto

SPEAKER_02 5:19

I have purchased some things. It's be become more easy to to to trade and do things on purchasing or doing some of the things I I enjoy. That being said, um I d I don't know that it's a hedge against anything. I don't know. I don't know. I have to agree with you. I don't know what class it would be, other than it's it's it's something, and I think at some point we'll have some kind of uh description for it, but right now it's just a uh another uh very volatile asset that seems to continually climb over time like other good assets would do. So I don't know that it that I would put an asset class line around it of where it falls, other than to say it's it's just another piece of diversification is how I personally use it. I don't know. Do you personally invest in crypto? I don't. Okay. I don't uh we gotta get you started, Gary. You know?

SPEAKER_01 6:17

You know, I call me old-fashioned, Wade. I I believe in that old adage, know what you own. And I gotcha. Something that kept us and my former uh my former life uh former company out of trouble during the great financial crisis was you know, if you can't explain it, don't buy it. That kept us from buying a lot of a lot of awful things uh that that other companies were buying. Yep. Um credit, you know, uh all kinds of structured investment products that had liquidity lockups and people didn't know um people didn't know what they were really buying.

SPEAKER_03 6:58

Yeah.

SPEAKER_01 6:58

And uh and it's something that, you know, for for me personally and and for our clients, um, if I can't explain it, I don't I don't feel comfortable owning it.

SPEAKER_02 7:08

I I agree, and I'm certainly not trying to promote any of our clients. We just you know we get a lot of questions about it, and that's kind of what I say is I I we can't define it, so we can't uh in any way, form, or fashion suggest that you purchase it. But if you're going to purchase it, you know, I can tell you what it's like and get and tell them the story, how easy it is to do it, but you know, the cautionary tale is we're not really giving advice around

Cautionary Advice on Crypto Ownership

SPEAKER_02 7:37

it.

SPEAKER_01 7:37

Yeah, I I think the other thing is that, you know, there may be people out there who are much more knowledgeable about cryptocurrencies than I am. And so they may have a better framework for understanding it, for understanding valuation and for utility. And so they feel more comfortable in that. Um, or they may just be higher on the risk tolerance than I am, and so they're okay to speculate and in in in things like that.

SPEAKER_02 8:07

Well, I got I got it.

SPEAKER_01 8:08

There's a place for both of those.

SPEAKER_02 8:10

I'm not cheating on you. I don't want you to think I'm cheating on you, but uh I do like Coinbase's leadership as well, and I think they've been an exemplary organization to use. Um, and I think they got great leadership there, um, much like the leadership you provide all our clients. So I don't want you to think I'm cheating on you, okay? But but that I think they're uh a good company to start with if you're looking at at the crypto world. Now that being said, I want to talk a little bit about

Government Oversight and Market Developments

SPEAKER_02 8:35

I don't want to get in the government oversight of crypto. I just want to talk about, let's talk about some good things I'm seeing, and I feel like is that you know we had a a very long government shutdown, and it really didn't have the impact that a lot of people thought it was going to have. You want to talk about that and ex and then talk about where we are now where we were a year ago to where we are as far as like how we have seen debt come down, and we're really starting to see GDP move.

SPEAKER_01 9:04

I I

Economic Impact of Government Shutdowns

SPEAKER_01 9:06

think we may be on the precipice of another government shutdown here uh shortly if Congress can't pass these spending bills again, that they gave themselves some time to do it. Yep.

SPEAKER_02 9:15

Um the issues Congress, uh, I think it just you know it's got it got another, it's got to clear the Senate now, right? And there's who who knows what leverage is gonna be held there. So I agree.

SPEAKER_01 9:26

And it seems to be around the same the same issue that that it was last time. Yep. Um, you know, whether that gets uh how that gets dealt with, I'm not I'm not sure. Um, but um, you know, it's an election year, so people will want to uh they'll want to pass something so they can go home and start um uh you know campaigning again. Um but uh you know the government government shutdowns rarely have more than a uh you know quick impact on on markets. And they certainly they certainly have a larger impact, you know, here in the DC area where I'm located, um, because people are out of work uh for a little while. And you know, if it goes on too long, they start missing paychecks, which impacts local businesses and the ability for people to to pay for things. Um so there's a lot of angst around that. Outside the beltway, I'm not sure that you know that that the the rest of the country or the rest of the economy really feels much in a government shutdown.

SPEAKER_02 10:37

Yeah, I I I had to say it didn't feel like outside the beltway, it didn't feel like core economics really were impacted that much.

SPEAKER_01 10:45

I mean, the the biggest thing that was for me that uh selfishly, uh that we didn't get government data. Yeah. Um so you know, for those who lived and died by economic releases, yeah, uh, you know, we were sort of flying blind uh for a little bit.

SPEAKER_03 11:05

Right.

SPEAKER_01 11:06

Um but again, that's where we get back to this, you know, signal versus the noise.

SPEAKER_02 11:12

Yep, exactly.

SPEAKER_01 11:13

Exactly. That that was gonna be noise. What happens in a two-month period or a three-month period, and all of the government data is backward looking anyway. So it already happened. Um uh so we shouldn't be making forecasts based upon that anyway. Um, but uh, but you know, missing some of that data was was important for talking about where policy rates should go in the future.

SPEAKER_02 11:39

Yeah, and I think you did a great job of staying focused, helping us stay focused. Um, and I think that's let's talk a little bit about why the process matters more, right? Like, you know, you you have a process and you stick to that process, and you may not have the data short term, but you're certainly looking more than you know, long term. So walk me through that.

Investment Process and Market Outlook

SPEAKER_01 12:02

So our process, I guess, starts with you know where we started this conversation. What's the direction of interest rates? Because all financial assets are going to be impacted by the direction of interest rates. We look at GDP growth and where uh the fiscal stimulus is going to come from in any given year or lack of fiscal stimulus.

SPEAKER_02 12:25

Or lack of, yeah, exactly.

SPEAKER_01 12:27

And uh and and generally make a you know decision upon you know what what the economy is going to look like in this country and other countries based upon that. And then, you know, then we look at valuation, you know, where are things? And again, as we entered 2026, you know, we seem to be right back where we were at the end of 2025, which is US valuations were high. Um, you know, and the dollar was had recovered a little bit of what it lost, but was probably still going to decline. So, you know, our process is the same, looking at that top-down approach and then a bottoms up looking at sectors, which sectors are likely to perform, outperform, underperform. And and frankly, you know, I didn't, I went back to to change our our slide that we put in client portfolio proposals and didn't have a ton of things to change in it. Yeah, that the beginning of 2026 looks a whole lot like what we thought 2025 was going to look like, and 2025 played out pretty close to what we thought it was gonna play out as. Um, I think if anything, 2026 has this feeling to me that with the stimulus from the One Big Beautiful Bill Act, both on the personal side, in terms of uh you know, individuals and individual taxpayers getting more in their take home pay and getting probably a decent sized refund in March and April, and then businesses getting all these incentives to do capital expenditures, which we know filter down to the rest of the economy too.

SPEAKER_03 14:18

Right.

SPEAKER_01 14:19

Um, that that you know, GDP is probably going to be higher in 2026 than it was in 2025. And in 2025, we had really good growth. Yeah. So it's it's hard to imagine in a scenario like that, where we have three to four percent GDP growth um and you know mild inflation, three percent call it.

Economic Growth and Fiscal Policy in 2026

SPEAKER_01 14:49

Yeah, it's hard to imagine that you know the economy gets into real trouble with a six to seven percent nominal growth rate for the year. Yeah, and um, you know, barring anything, uh barring any, you know, crisis, real crisis that comes up. A real crisis. A real crisis. Yeah. And and I, you know, I saw Scott Besson talking at at Davos, and and the real crisis that he imagined, the one that that keeps him up at night, is China invading Taiwan.

SPEAKER_02 15:22

Exactly.

SPEAKER_01 15:22

I mean, that's that would be a crisis.

unknown 15:25

Yep.

SPEAKER_01 15:26

Um, you know, um, you know, Trump, Trump asking Europe to let us have more of Greenland uh to do the things that they want to do anyway. Yeah. Um that's not a crisis. Um so I think we need to, we need to we need to redefine the word back to what it used to be. Yeah.

SPEAKER_02 15:50

Yeah. And and I think the only you know, it depends on if if you can just be out of politics and you think about us as a country and you think about you know protecting hemispheres, that we're already there, we're already doing it. It just makes sense to me from uh throwing politics aside. Now, that being said, we talked about companies feel confident. I don't get the same where where are we with consumer sentiment right now?

SPEAKER_01 16:21

So consumer sentiment is still struggling. And it's it's still bifurcated a little bit when you delve into the numbers um by Democrats versus Republicans. Democrats feel worse about the economy than Republicans, but it's not like the average overall is trending bullish. And and one of the one of the things that I've I've noted and kept track of is a chart that shows real consumer incomes versus inflation, right, and then takes and then subtracts out transfer payments from the government, social security, uh, Medicare, welfare payments, that kind of stuff, right? Takes out transfer payments. And the reason that consumers don't feel good is that that inflation buildup that we had in the previous over the previous five years has really eroded purchasing power.

SPEAKER_03 17:27

Yes.

SPEAKER_01 17:27

And even though inflation is slowing back down to below three percent, yes, um, it doesn't mean that the price of milk goes down. It doesn't mean that prices go down, which is what I think people want. I think I think in uh consumer sentiment is you know is reliant upon this idea that you know five years ago um cars cost this, and today they cost this plus plus. Right. You know, and it's it's expensive to live, and it's not gonna get and it's not going to get less expensive. And you see this line of can of incomes excluding transfer payments converge on um on the inflation rate over over this time series. And you see people just you can see it in the data that people are struggling to keep up with inflation. And that's that's why.

SPEAKER_02 18:32

And they come in the door, Gary. You can tell when you're meeting with the younger advisor or younger client, you know, that that spread is has just narrowed and it just it's it's certainly it's we, you know, something that we we have to take into planning expectations. And you know, I would also, you know, we haven't even touched on the housing market, right? The housing the market is is uh I don't say it's upside down right now, but I certainly think it's sideways. You know, I think that, you know, and um some of the things that that I'm closely aligned with, you know, we're we're sitting on an inventory, and um, I'm hoping that something happens in the near near future with that.

SPEAKER_01 19:13

Yeah, I'm you know, I tend to be an optimist around things. And so let me just say that you know that the effects of tax policy and capital spending policy are going, especially in a scenario where there is a shortage of labor, is going to put pressure on real wages to rise.

SPEAKER_02 19:37

Right, exactly.

SPEAKER_01 19:38

And and that's what we saw in the first Trump administration too. Uh, you know, in years two and three before the pandemic, we saw real wages for the bottom, you know, half of workers rise at the fastest clip since the 80s. Um and I wouldn't be surprised if we if you know we don't see that again. And that could turn consumer sentiment around. It doesn't it it doesn't happen overnight, but over the course of the year, it's possible that we'll see real wages start to rise and and people will feel better about about that. I certainly think that's what what the Republicans are hoping for going into the midterms, which is why they've they're trying to juice the economy here. Yeah but um but but I don't think it has an inflationary uh a huge inflationary impact. Um which and and the reason is we we did it before in you know the first first Trump term, and we didn't have huge inflation. And and the the reason is we're not the government isn't printing money and handing it out to people. Right. Yep. They're reducing taxes and giving people their own money back. And I think that's a big difference.

SPEAKER_02 21:08

And it and we don't have a gigantic it's okay to say a gigantic difference, and we we could do a whole podcast on that, but anyway, uh then m go moving forward, go ahead.

SPEAKER_01 21:20

Yeah, I th I think that that inflation is everywhere and always a monetary phenomenon, right? And if you don't have a lot of money printing, which I don't think we're gonna see, right, um, then then it's hard to imagine that it's super inflationary.

SPEAKER_02 21:37

Well, let me let me move you down the road a little bit. We're we're starting to run out of time. Let's talk about your wall of worry. So, what do you see immediately that you're thinking about? You know, I know how you guys work and you have a wall, and let's what is it right now?

Wall of Worry: Geopolitical and Market Risks

SPEAKER_01 21:53

You know, I I don't really have a wall of worry, Wade. The wall of worry is just out there. It's it's uh it's something that that fills magazines and stuff like that. I think what what I have are you know a variety of risk scenarios that I can apply probabilities to and and then have solutions for from an investment perspective. What would I do if X happened? What would I do if Y happened? I think the the the biggest thing if you're asking me like what's at the top of that wall of worry it would probably be the the the the same thing that Scott Besson talked about uh this past week in Davos which is according to him something like 97% of all the world's top top semiconductors come from one place Taiwan and as he called it it's a single point of failure if China invades Taiwan that that is a huge issue for the global economy. You know we we saw during COVID what happens when we reduce the amount of chips coming out and we can't produce cars and we can't produce consumer goods and things like that and you can't get a new computer for a little bit. It would be a much bigger deal because now you're now you're not only can you not get the semiconductors but you also probably have a hot war in Asia on your hands. That's that would definitely drive down stock prices. It would probably be great for long-term treasury investors. To actually do that. And so so it's it's sort of low on my probability you know list wall of worry. You know things that are out there that that are more worrisome to me would be would be you know we get uh inflation resurgency. You know that that's one. You know again it wasn't my base case. But in in that case you might see an inability of the Fed to continue to lower rates for the rest of the year. Which would definitely as we talked about um from an interest rates versus asset valuation standpoint that would have a material impact on how people would value financial assets across the board so so a resurgence in in inflation would would be on the list and I think it's on everyone's list um but again I think that the general trend is for lower inflation in the US um but you know that those are the the two big things I think that would be on the wall of worry for us.

SPEAKER_02 24:55

So I personally feel very optimistic about where we are from looking at the market even though we're valuations like you said 25 is repeating 26 but it seems like there's a lot of good things on the horizon. So from a you know an advisory standpoint sometimes you know we have to remove our own personal exuberance right we got to stay you know stay in the system um but how do you feel right now it seems like you know what if you if you're looking at it from if you're having to you know look in your crystal ball like I put you on the spot where if you know where you see us being let's just use S P on December 31st of 2026.

Market Sentiment and Future Expectations

SPEAKER_01 25:45

I think the SP is probably up 10 to 12 percent this year. I think that's a fair baseline. You know and and a lot of that I think comes from a broadening out of you know sectors that have not experienced a huge amount of increases in talk about those sectors. You know industrials I think the consumer you know if we get an increase in real wages some of those consumer uh consumer sectors start to pick up um you know consumer staples I think are a great place right uh that that that can get that can benefit from you know real wage increases um you know I I think a lot of those you know even smaller companies you know we've seen small companies start to outperform but it's been this you know at the beginning or the end of last year it was really the speculative you know small companies that um you know that that don't really earn any money um I think I think small companies that do make profits uh could could see their their stocks start to rise you know the other thing that why I can be a little more exuberant about the stock market is because I still think there is plenty of pessimism out there that we're not at a euphoric right stage. If you look at investor sentiment if you look at bulls versus bears um you look at all these traditional metrics of you know where where people are invested you can see that you know there's still skepticism and I think that as long as there's a healthy skepticism out there then then stocks can go up.

SPEAKER_02 27:38

When when everybody has decided that the only thing to do is to be at the riskiest end of uh the risk spectrum right that's when it's time to oh let's back off yeah I gotcha I agree and uh I I just don't think we're there yet so this there's a lot of tailwinds for the economy there's a lot of tailwinds for corporate profits and it's hard to imagine a scenario where stocks go down when corporate profits are going up I I I agree with that statement and and I truly appreciate the you know I want to I'm staying within a system right can diversify and continuing doing what you're doing and and and you've done an excellent job leading us down that path. So let's end this for our listeners what's the one or two closing remarks you want them to take away from this discussion you know we don't do our forecast anymore but we've obviously talked a lot about forecasting um what do you what do you want them to take away that be meaningful or impactful for them in 2026?

SPEAKER_01 28:43

I

Key Takeaways for Investors in 2026

SPEAKER_01 28:44

think uh the things that I would take away from it are one um don't be afraid to keep your current allocation don't get scared and and try to de-risk unnecessarily two you international diversification is back it has value it will continue to have value for a considerable period of time because these these trends are long right the dollar doesn't just reverse itself uh for one year it's a it's a you know trends in in currencies trends in international diversification are longer term in nature and so international diversification is is here and it has benefit and then finally I think you know if if we're right that short-term interest rates go down and longer longer term interest rates go up then shorter duration bond portfolios are going to do well and it's also going to be indicative of a healthy economy uh where banks are gonna want to lend and uh and uh and GDP is going to grow so those are the those are the three things.

SPEAKER_02 29:49

Yeah I've very very uh very good three things when you're looking at it from an optimistic standpoint. So I'm gonna say you feel even though you won't say you're exuberant I I feel a little bit of exuberance there.

SPEAKER_01 30:05

You know I'm just I'm I'm never exuberant. You know I just it's just an even killed kind of guy.

SPEAKER_02 30:11

Yeah yeah that's so that's why we call you Barry Manilo now so or Gary Manilo. So uh but yeah well Gary I appreciate your time again and uh you know look forward to our next conversation and uh you know I think hopefully next time we check in we're on the path of where you're where you you believe we're gonna be thanks Wade and I got the mission loud and clear to write the theme song for this podcast. So there you go. There you go. Gary Manilo, thank you very much. Thanks for spending time with us today on Built to Last. If today's conversation helped bring clarity to your thinking around wealth, work or life, that's exactly why we do this.

SPEAKER_00 30:50

Till next time, stay focused on building something that truly lasts this podcast is produced by Conquered Wealth Partners, LLC, an investment advisor registered with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. The information presented is for educational and informational purposes only and should not be construed as personalized investment, financial tax or legal advice. Nothing discussed should be considered a solicitation or offer to buy or sell any security or investment product. All investing involves risk including the potential loss of principal as performance is not a guarantee of future results. Individual results will vary based on personal financial circumstances, risk tolerance and other factors. Concord Wealth Partners does not provide tax or accounting services. Tax and accounting services are offered through Concord Business and Tax Advisory, an affiliated CPA firm. For more information about Concord Wealth Partners, including our Form AB V Part 2A and Form C R S, please visit ConcordWealthpartners dot com or contact us at 800 838 4370