Sarsi, LLC

Please find below the second quarter market newsletter:

https://www.sarsillc.com/second-quarter-2026-market-newsletter/

EXECUTIVE SUMMARY

- U.S. Equity Markets performed well in the quarter. The S&P 500 crossed 7,600 fueled by Artificial Intelligence capex but pulled back in June. Broader market components (such as non -AI stocks, value stocks, smaller stocks) outperformed the lagging, over-concentrated Magnificent 7 giants as profit-taking intensified.

- International equities performed unevenly; emerging Asia gained from AI hardware supply chains, while European manufacturing languished under severe localized industrial power costs stemming from Middle East conflicts.

- In Fixed Income Markets, yields ticked up and long-term bonds sold off. However, cash and shorter duration bonds helped diversified bond portfolios eke out a gain.

- U.S. economic growth remained resilient, supported by a stable employment and consumer spending. Capital expenditures expanded past technology into the physical economy, lifting core orders for primary metals and machinery.

- Corporate earnings anchored equity strength, delivering 28.6% growth in Q1 with record margins of 15.6%. Q2 projections expect growth exceeding 20%.

- The S&P 500 settled at a trailing P/E multiple of 20.1 times earnings. While historically elevated, this multiple reflects a marketplace supported by actual, tangible corporate profit expansion rather than speculative hype.

- Portfolio Construction: Successful investing balances financial science with planning art. Good financial planning ensures portfolios survive behavioral impulses and shifting market environments.

Second Quarter 2026 Market Newsletter Second Quarter 2026 Market Newsletter

Trump Accounts (Section 530A IRA go live on July 4th. Here are two timely articles:
https://www.sarsillc.com/a-strategic-look-at-the-trump-accounts/

https://www.sarsillc.com/how-to-open-a-trump-account/

How To Open A Trump Account How to Open a Trump Account

The Truth About Tax-Loss Harvesting: Maximizing Benefits and Avoiding Pitfalls

The Truth About Tax-Loss Harvesting: Maximizing Benefits And Avoiding Pitfalls The Truth About Tax-Loss Harvesting: Maximizing Benefits and Avoiding Pitfalls

What should I do with my large tax refund?

What Should I Do With My Large Tax Refund? What should I do with my large tax refund?

First Quarter 2026 Market Newsletter

https://www.sarsillc.com/wp-content/uploads/2026/04/1Q-2026-Newsletter.pdf

EXECUTIVE SUMMARY

- Global optimism from late 2025 evolved into a more complex environment where resilient U.S. consumer spending and a stable labor market offset pressures from sticky inflation and geopolitical tensions.

- While global equities and bonds faced headwinds, investors found success by rotating into "out-of-favor" areas like Value and Small-Caps, which provided a critical buffer against the 12% drop in the "Magnificent 7."

- The U.S. economy continues to grow, though at a more fragmented pace, with high-migration regions in the Sun Belt and new industrial hubs significantly outperforming more stagnant coastal markets.

- Outside the U.S., economic conditions remain mixed; however certain countries are benefiting from appreciating commodity prices.

- A major highlight of the market's fundamental strength is that most of the 2025 equity returns were driven by robust earnings growth rather than just speculative hype.

- Corporate profitability remains a strong foundation, with 76% of S&P 500 companies beating expectations in the fourth quarter of 2025 and delivering the fifth consecutive quarter of double-digit earnings gains.

- Although valuations are facing increased scrutiny, forward-looking earnings and revenue forecasts for 2026 have recently been revised upward, which augurs well for future equity performance.

- The quarter reinforced the "fallacy of point-in-time returns," proving that a disciplined, diversified approach is the most reliable way to navigate shifting market tides.

- Historical shifts in S&P 500 leadership (such as AIG and Citigroup) remind us that diversification allows investors to capture the rising stars of "creative destruction" while avoiding over-exposure to yesterday's winners.

www.sarsillc.com

Self‑Employed? The Right Financial Advisor Can Save You Thousands (Wall Street Journal)

Self‑employed ? The Right Financial Advisor Can Save You Thousands self‑employed ? The Right Financial Advisor Can Save You Thousands. Self‑employed people juggle cash flow, taxes and retirement. A financial advisor can help you save money and keep your business and personal finances aligned

What Elite Tax Pros Wish Their Wealthy Clients Knew. (Bloomberg)

www.sarsillc.com

Tax Day 2026 is approaching. Are you ready for the OBBBA changes?

Increased SALT caps to restored 100% bonus depreciation things have shifted high for earners.

Read filing guide & checklist: https://www.sarsillc.com/prepare-for-the-2026-tax-season-filing/

Prepare For The 2026 Tax Season Filing Prepare for the 2026 Tax Season Filing with this guide from Deva Panambur, CFA®, CFP®. Learn how the OBBBA impacts SALT caps, depreciation, and IRAs.

http://www.sarsillc.com/wp-content/uploads/2026/01/4Q-2025-Newsletter.pdf

EXECUTIVE SUMMARY

- US stocks performed well in 2025, helped by large technology companies, though performance broadened modestly toward the end of the year.

- Foreign stocks outperformed US stocks significantly, helped by a declining dollar, corporate reforms and improved profitability in Japan as well as fiscal stimulus in Europe.

- Fixed income delivered a solid recovery after several challenging years, helped both by higher coupon income and declining interest rates as monetary policy gradually eased.

- The U.S. economy continued to expand in 2025, though at a slower pace than in prior years.

- The Federal Reserve cut its benchmark federal funds rate during the second half of the year.

- Political developments played a visible role in shaping market sentiment during 2025.

- Corporate earnings continued to be strong as companies navigated the uncertain and unstable environment.

- US stocks are more expensive than foreign stocks in absolute and relative terms.

- There are elements of investor behavior and market pricing currently that rhyme with previous bubbles but there are key differences that seem to suggest we are not yet in a bubble.

- Investors should continue to focus on diversification to create resilient portfolios.

www.sarsillc.com

Should you rebalance your portfolios?

Should I Rebalance My Portfolios? Should I rebalance my portfolios?