Q1 2026 Client Letter

Q1 2026 Client Letter – April 6, 2026

Market Recap

Overall Performance

• Value, small cap, mid cap, and international equity indexes are just about flat so far

• Growth equities have been hit the hardest

• Fixed income has been largely flat overall BUT income paid has been strong

Common Themes Of 2025

• Equity markets started the year off fairly strong then volatility took over due to the conflict in Iran

  • See the separate commentary from Murat Sensoy, CFA on this topic

  • Click here to read more 

• AI and Tech equities have been hit the hardest due to the market believing they are “overhyped”

  • Some of these companies are trading at very high valuations

  • BUT not the market overall

  • Further declines present opportunity to buy at cheaper prices

• The Fed is stuck in a tough spot

  • Higher costs/inflation prevent them from drastically reducing rates

  • The unemployment rate is creeping up forcing them to consider knocking rates down

• The market is “stamping it’s feet” because of uncertainty

  • Businesses don’t like uncertainty because they can’t plan

  • Investors/people don’t like uncertainty because they might shy away from spending

  • This is why markets react

• Diversification has been key so far this year

  • If you are way overweight growth equities and too light in other areas, you could be overexposed

  • We analyze portfolios to make sure we’re properly diversified

Market Outlook

Equity Market

• Earnings/Valuation

• The S&P 500 is currently trading around 6,600 (WSJ) and the estimated earnings are around $309/share for 2026(Goldman Sachs).  If we use $309/share and divide that by 6,600 price we come to about a 4.68% earnings yield on the S&P 500.  This is fairly valued to us considering the 10-year treasury is currently sitting around 4.31% (Bloomberg).  We’d like to see a slightly higher spread between those two numbers BUT pullbacks like we’ve seen help get valuations back to where they should be. This is one of the main reasons that despite volatility, the S&P 500 have been pretty resilient 

• Despite volatility, forward earnings estimate for companies have continued to increase. This is  

• How Do We Position Ourselves With This Information?

  • We’ve largely been neutral in our stance

  • We want to make sure we have a good balance of growth, value, small cap, mid cap, international exposure in equity parts of portfolios

    • Not too overweight on growth but also not too cautious to cut off growth

• What Areas Do We Like?

  • Nothing specific

  • We are really looking to make sure portfolios have good balance and not large overweight areas

  • This is also client specific as our clients’ goals and objectives are all different

• What Are We Looking For?

  • We are welcoming market corrections

    • It allows us to buy companies at cheaper prices

  • We also welcome the market going up

    • That’s always nice, too

Fixed Income

• Where Are We Now?

• The Fed Funds rate (short term rate) sits around 3.75%, down from 4.25% a year earlier (Bloomberg)

• The 10 Year Treasury sits around 4.31%, up from about 4.15% a year ago (Bloomberg)

• The 30 Year Treasury sits at around 4.89%, which is up from about 4.6% a year ago (Bloomberg)

• The yield curve is not “inverted” which is good

  • Long term investors are getting rewarded more which is what you want to see in the yield curve          

• What Areas Do We Like?

  • We see opportunities in fixed income for conservative investors

  • If equities have a big correction the idea is to sell your fixed income that held it’s value well and buy equities that look cheap (Please be advise, this strategy might not be suitable for all investors)

  • We’re not interested in fixed income so much for price appreciation but more for income and diversifying from equities

Economy

• Growth

• The US economy grew by 2.2% in 2025 (US Bureau of Economic Analysis)

• The S&P 500 was up double digits in 2025 (WSJ)

• There has been a disconnect between economic growth and stock market growth

• It’s not a good indicator of how markets will perform

• But economic growth has been slow but steady for several years now

• Unemployment

• The unemployment rate stands at around 4.4% as of February 2026 (Bureau of Labor Statistics)

• Jobs data has not been favorable for the past few months BUT overall, this is relatively low unemployment

• This is why the Fed hasn’t had good enough reasons to dramatically reduce rates and has put rate cuts on hold for now

• Politics/Geopolitics

  • The conflict in Iran has had the most significant impact on markets recently

  • What markets don’t like about a potential war is uncertainty

  • That’s why they react, it’s the unknown

  • The more that becomes known the quicker they recover

  • Long-term investors may be rewarded for not acting on emotion or irrationally

  • See the additional piece from Murat Sensoy, CFA

    • Click here to read more 

    • The Fed and Interest Rates

      • The Fed has kept its overnight rate/short term rate at 3.75%

      • We don’t see a reason for rates to be significantly reduced

        • We feel you would need to see significant unemployment or a dramatic reduction in inflation

      • We also don’t see a reason for rates to be significantly increased

        • Inflation would have to be much higher than around the 3% range that it has been stuck at

        • Employment data would also have to be much more positive

• Any client feeling uncertain about where they stand or haven’t been in in a while is encouraged to setup an annual review with their advisor

• Please contact our office to do so. 

• Our tax team is working diligently on returns to get them done by the 4/15 deadline

  • We appreciate their dedication and hard work

  • We thank our clients for working their best to get us the information we need to get those completed in a timely manner

• We want to welcome a couple more additions to our team:

  • Julia Bollini

    • Julia is an Operations Support Specialist

    • We are committed to provide you the highest level of service we can and will bring on new team members to honor that commitment

    • We are very excited to have Julia on the team

  • Lexie Dombrowski

    • Lexie is our Business Development and Marketing Specialist

    • Our firm is committed to growing and expanding so we can help more people just like you

    • Lexie has been a great addition to the team, and we are happy to have her on board

• As always, thank you for your continued trust in us

• Our firm has grown from a Plan B for an ex-pro umpire into a team of 16 (and growing) serving hundreds of clients

• None of this is possible without you

• Feel free to pass this along to anyone you think it may help

• We also can’t thank you enough for your referrals

• We hope you have a wonderful spring!

Sincerely,

Oujo Wealth Strategies

1540 Highway 138, Suite 106, Wall, NJ 07719

Main | 732-556-4200

Fax | 732-681-4479 

OujoWealthStrategies.com

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

Past performance is not an indication or guarantee of future results.

A diversified portfolio does not assure a profit or protect against loss in a declining market.

Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.

The return and principal value of bonds fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their original value.

The return and principal value of stocks fluctuate with changes in market conditions.  Shares when sold may be worth more or less than their original cost.

The views stated in this letter are not necessarily the opinion of Cetera Wealth Services, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization -weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.