Q3 2025 Client News Letter

Anthony Sandomierski |
Categories
Client News Letter

Q3 2025 Client Letter – October 8, 2025

Enclosed are your reports and spreadsheets (Clients with assets over $1,000,000 in assets under management) for the period ending September 30, 2025. Also included in this mailing are educational materials, relevant updates, and our outlook on the market.

Market Recap

Overall Performance

It’s been a pretty wonderful year performance-wise so far:

  • Just about all asset classes are positive for the year

This is largely what we see:

  • Conservative accounts are up around mid-single digits
  • Moderate accounts are up close to the double-digit level
  • More aggressive accounts are up into double digits
  • US Stock Indexes are all positive, with large cap outperforming mid and small caps
  • Large Cap Growth and International positions have been the highest performers
  • Dividend payers have performed well and paid their dividends – great to see and what we root for
  • Fixed income performance is positive across the board
  • Income here is very strong for the interest rate environment we’re in

Common Themes So Far

  • The market was spooked early in the year on tariff/policy change concerns, but that has largely subsided
  • Tariff policy changes have been difficult to track, but the market has shrugged this off
  • The equity market has whipsawed from lows to record highs
  • The S&P 500 started the year at about 5,800, hit 5,000 a few months later, and has now reached almost 6,700 as of this letter
  • The lesson: Have a long-term outlook, don’t try to time the market, and stay disciplined
  • The Federal Reserve has been under scrutiny from the Trump administration to lower rates significantly, but has only made one minor cut this year
  • Inflation remains a little stubbornly high
  • The Fed wants to see 2% inflation to justify more significant rate cuts

Market Outlook

Equity Market

Earnings / Valuation

  • The S&P 500 is trading around 6,700 (WSJ)
  • Estimated earnings: $300/share for 2026 (Goldman Sachs)
  • Earnings yield = 4.47% ($300 ÷ 6,700)
  • The 10-year Treasury is at 4.12% (Bloomberg)
  • Takeaway: You’re being paid a slight premium to own equities over safer assets — this has been the norm

How Do We Position Ourselves With This Information?

  • As the market has climbed, we’ve made slight moves into fixed income
  • Why? You’re being compensated well to own fixed income
  • We are cautiously optimistic — lower rates could boost equity valuations
  • Strong projected earnings continue to climb
  • If the S&P 500 nears 7,000, it’s not too expensive
  • If it falls to 6,300, it looks quite cheap
  • We are ALWAYS looking for opportunities

What Areas Do We Like?

  • Dividend Payers
    • Attractive yields
    • Fair valuations
    • Strong holdings for retiree income
  • Mid and Small Caps
    • Could benefit from lower rates
    • Have been impacted by higher borrowing costs in recent years

Fixed Income

Where Are We Now?

  • Fed Funds Rate (short term): 4.25% (Bloomberg)
  • 10-Year Treasury: 4.12% (Bloomberg)
  • 30-Year Treasury: 4.75% (Bloomberg)
  • Yield curve is largely no longer inverted
  • Past fears of recession due to inversion have not materialized
  • Longer-term investors are now better compensated

What Areas Do We Like?

  • Short-term investors may get hit if rates continue to decline
  • Mid to longer-term investors benefit — values tend to go up if rates fall
  • Mid to long-term fixed income is paying attractive rates — we like this area

Economy

Growth

  • Disconnect between US economic growth and equity market growth
  • This has become a new norm
  • Focus remains on company earnings and valuation relative to that

Unemployment

  • Some signs of weakness, but we’re not even at 5% unemployment
  • Rising unemployment may warrant rate cuts
  • It’s a balancing act:
    • Higher unemployment hurts the market
    • Lower rates help the market
  • Market reactions are hard to predict in this environment

Politics / Geopolitics

  • A lot going on globally, but markets continue to focus on earnings and spending
  • We’ll keep you posted on anything significant impacting financial markets

The Fed and Interest Rates

A Quick History Recap:

  1. 2008–2015: Near 0% interest rates
  2. 2018: Rates rise during China trade war to a little over 2%
  3. 2020 (COVID): Rates return to 0%
  4. 2022–2024: Gradual rise to 5.25%
  5. 2025: Down to 4.5%, then cut to 4.25%

Why Is This Important?

  • Equity markets LOVE low rates – boosts valuations
  • Businesses love low rates – cheaper borrowing
  • Short-term investors hate low rates – poor compensation
  • Long-term investors love locking in high rates
  • Yield curve suggests more rate cuts expected, but markets price these in early

In our view, we’d need to see:

  • Negative employment data
  • Weaker consumer sentiment/spending
  • Low inflation
  • Manufacturing softness

To see significant rate cuts — we’re not there yet

Here Are a Few Areas Clients Should Focus On

Pre-Retiree Clients

  • Quantify how much is needed to be financially independent
  • Update your retirement plan if you’ve had a major life event
  • If it’s been a while since your last meeting, please reach out

Retiree Clients

  • Focus:
    • Ensure your distribution rate is appropriate
    • Make sure you're generating enough income
    • Ensure your estate plan is in order and we have documents on file
  • Haven’t met in a while? Let’s schedule a meeting

A Few Updates Here

Jason & Anthony

  • Available for client reviews
  • Please reach out if you’re due — we recommend annual reviews

Mike Rytelewski, CPA, CFP

  • Congratulations! Mike has officially received his CPA license
  • We’re thrilled to have him on our team

Ray Gardner, CPA

  • Passed the Series 7 exam — great addition to the team

Tax Team

For year-end tax projections, contact:

Client Services Team

Recognizing our dedicated team:

  • Amanda O’Reilly
  • Casey Cavasin
  • Paola DiGeso
  • Liz Lutes

They show up every day and give it their all — thank you!

Thank You

As always, it’s an honor to serve you.
We appreciate your feedback, and if there are areas we can help with, we’d love to know.

We can’t thank you enough for your business — have a very nice fall!

Sincerely,

Oujo Wealth Strategies
1540 Highway 138, Suite 106, Wall, NJ 07719
📞 Main | 732-556-4200
📠 Fax | 732-681-4479
🌐 OujoWealthStrategies.com

Disclosures

All investing involves risk, including the possible loss of principal...
(Full disclosures kept as in original for compliance—can format as footnotes if needed.)

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