Q1 2026 Market Update: Catholic Investing in a Volatile Environment

The first quarter of 2026 brought heightened geopolitical tensions, inflation concerns, and continued questions around interest rates. In this latest Aquinas Wealth Advisors update, Chris McMahon and Greg Dukes discuss how markets responded during the quarter, what investors should understand about the current environment, and how faith-aligned portfolios have continued to navigate uncertainty with discipline and diversification.

This discussion focuses on long-term investing principles, market observations, and the role of values-based investing during periods of volatility.

Key Takeaways

  • Markets remained resilient during a volatile first quarter despite geopolitical uncertainty and inflation concerns.
  • Interest rate expectations continue to be influenced by energy prices and broader inflation trends.
  • Market leadership appears to be broadening beyond large technology companies into areas such as manufacturing, materials, real estate, and energy.
  • Aquinas Wealth Advisors continues to monitor faith-based investment screens regularly while maintaining diversified portfolio construction.
  • Faith-aligned investing does not necessarily require sacrificing diversification or long-term portfolio discipline.
  • Asset allocation and risk tolerance remain central considerations during uncertain market environments.

Why This Matters for Faith-Based Investors

Periods of market volatility can create uncertainty for investors, particularly when headlines are dominated by geopolitical conflict, inflation concerns, or changing monetary policy expectations.

This update provides educational perspective around how diversified, faith-aligned portfolios may respond during changing market cycles. Rather than reacting emotionally to short-term developments, investors are often best served by maintaining a disciplined long-term approach aligned with their goals, values, and risk tolerance.

Faith-based investing continues to evolve as investors seek portfolios that reflect both financial objectives and personal convictions.

Common Questions

What influenced markets during the first quarter of 2026?

The discussion highlights several factors that influenced markets during the quarter, including geopolitical tensions, inflation concerns, energy prices, and expectations surrounding future interest rate decisions.

Why do energy prices matter for interest rates?

Energy prices can influence broader inflation readings across the economy. Central banks often monitor inflation trends closely when evaluating potential interest rate decisions.

What does “broadening market leadership” mean?

Broadening market leadership refers to a market environment where gains are not concentrated in only a small group of companies or sectors. Instead, performance may expand across multiple industries such as manufacturing, real estate, materials, and energy.

Can faith-based investing still provide diversification?

Faith-based investing strategies can still incorporate diversification across sectors and asset classes while applying values-based investment screens.

Why is diversification important during volatile markets?

Diversification may help investors manage risk by spreading exposure across different sectors, industries, and asset classes rather than relying heavily on a single area of the market.

How often are faith-based investment screens reviewed?

During the discussion, the Aquinas team notes that their faith-based screens are reviewed monthly as part of their investment process.

Full Transcript

Welcome to the 2026 first quarter wrap up, market outlook and client update.

I’m Chris McMahon from Aquinas Wealth Advisors.

With me is Greg Dukes, Executive Vice President, Aquinas Wealth Advisors. Welcome, Greg.

Let’s talk about the market. How are we doing, how are our clients doing? How, how are the faithful doing and and what do we see happening in the market, right now?

It’s been, it’s been a wild first quarter. The Iran conflict, obviously, was the headline.

Incredibly scary and Horrifying. Very much so, very much so.

But in spite of all of that, the markets have have been essentially right where we anticipated them to be. The S&P right now sitting around 4%. Dow Jones is up around 3% and the Nasdaq’s up.  All of the all of the concern in the markets where we thought they’d be not in the same way we thought they’d be.

We thought interest rates would start to be getting, well, not cut, but getting close to being cut. With probably just inflation is tweaked up a little bit, particularly around gas prices.

100% that’s as you know so well and as you mentioned in our last update, the the new Fed chair will start to be at the middle of May.

Yes. The challenge that he faces is, of course, $4.00 gasoline and you cannot cut interest rates with gas prices is at around $4.00. It’s just not possible. So that anticipated 2 rate cuts at the beginning of the year didn’t happen. We still think that that’s going to happen, but we have to get this conflict ended quickly.

That’s very critical, isn’t? I think the president knows that and I think the rest of country does too.

Faith investors have done very well year to date as well, haven’t they?

Very much so. Our clients have reflected those indexes in a lot of ways largely because what you mentioned in our previous update has come to fruition, where we talked about a broadening out of the market and that’s those are some of the things that we hold inside of the Aquinas portfolios are those broadening out stocks. Where you know we’re looking at materials, where we’re looking at real estate, where we’re looking at the coppers and the precious materials.

Yes, exactly. Rare earth minerals.
Yes, Sir, absolutely. It is interesting, isn’t it? Two years ago everybody was talking about SAS, SAS SAS, which is SAS software as a service.

The idea of having a factory, Oh my gosh, you’re dead overhead brick and mortar is a bad thing.
And now all of a sudden we’re talking about it again, it’s a market broadens that we’re talking about these HALO stocks; high asset buildings and stuff, factories, low obsolescence stocks you’ve talked about. I know we’ve talked about those a little bit, right, Energy stocks, some some manufacturing stocks, some consumer cyclical stocks.

And we’re looking at all those for our clients. And I think we are seeing good opportunities for investors of faith, aren’t we?

Very much so. And, one of the things that we do here, as you know so well, is that our faith-based screens are run every week so that we can sit here and look and see what are the opportunities that are out there, not only from a performance standpoint, but from a faith-based standpoint.

We continue to be and I should put this in the form of question, am I right in saying we continue to be surprised how the faith aligned portfolios have done very well relative to the to the secular portfolio?

100% before we put those those religious screens haven’t been as restrictive, hasn’t been as detrimental one of the portfolio’s return is possible.

Very much so. And I think that a lot of that goes to the the ability for us to be able to look at these individual companies and not buy more broad baskets. We can really focus on the individual companies in the sectors that we like and the opportunities that present them.

So for clients of Aquinas Wealth Advisors, as they’re out there thinking about their portfolios, thinking about the rest of this year, should be OK. Is that what we think?

Staying current to your risk tolerance. Asset allocation is key and having a diversified portfolio all while being faith aligned.

And if somebody says you can’t get a good returns and be faith aligned, don’t believe them.

That’s it for today. We’ll see you in a few months.

Please don’t hesitate to log on to aquinaswealth.com at any time to get any more information or call us here at the office.

Thanks so much for being with us.

Certain statements include “forward-looking statements” which are statements related to future events or future predictions, including events or predictions relating to future financial performance. Be cautioned that these forward-looking statements are only predictions and estimates regarding future events and circumstances and involve known and unknown risks, uncertainties, and other factors, including the risks that may cause the performance to be materially different from those expressed or implied by such forward-looking statements.

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