January 2026 Newsletter

Dear friends,

I hope all of you had a wonderful holiday season and happy new year. As we turn the page on 2025 and move into 2026, geopolitical uncertainty continues to be a major theme, underscoring the importance of diversification and disciplined risk management. Please do not hesitate to reach out if you have any questions or concerns.

By, Jaysen Bohrod, CFA

Market Commentary

Economic fundamentals in the last quarter of 2025 remained constructive. US GDP continued to grow as recession fears failed to materialize. Corporate earnings growth was positive, supported by resilient consumer spending, improving productivity trends and continued capital investment, all while inflation continued to trend lower.

The S&P 500 finished 16% higher for the year, capping another strong year for risk assets. Performance remained concentrated in growth-oriented sectors like technology and communications services, with signs of rotation into industrials and financials. Valuations remain elevated with the forward Price/Earnings ratio of the S&P 500 index at 22x, compared to its 30-year average of 17.1x. The Nasdaq Composite finished 20.36% higher, with continued strength in technology and artificial intelligence stocks.

Government bonds saw some stability with the 10-year Treasury trading between 3.96% and 4.2% and the 2-year Treasury between 3.4% and 3.6% during the quarter. The Bloomberg U.S. Aggregate Bond Index, a benchmark for U.S. investment grade, fixed rate bond market, returned 7.3% for the year, its best performance since 2020.

The Federal Reserve cut interest rates 3 times in the second half of 2025, bringing the target fed funds rate to 3.5%-3.75% in December. The market is anticipating 2 rate cuts for 2026 but the Fed seems to be leaning toward one. Messaging emphasized support for weakening labor markets while still cautious about the impact on inflation.

Gold delivered exceptional performance in 2025, rising over 60% to a record of over $4,500 per ounce, while silver rose 141% to $70 per ounce. Government central banks and investors continued purchases of gold and silver amid geopolitical uncertainties. Oil prices continued to fall, finishing the year below $60 a barrel for the first time since 2021.

The end of 2025 was characterized by slowing but stable economic growth and declining inflation. Equities benefited from continued earnings resilience and strong liquidity, while fixed income regained its role as a stable diversifier. However, elevated valuations, tight credit spreads and geopolitical uncertainty suggest future upside may be limited, unless corporate earnings continue to grow.

Schwab’s Changes to Move Money Transactions

For better security, move money transactions requiring client approval will only be available via Schwab’s e-Authorization or DocuSign. Paper forms are no longer accepted at Schwab for ACH transfers, wires, check requests, or internal account transfers.

To prevent any delays when you need to transfer money, please make sure you know your Schwab log in username & password and that your phone number is correct on your account profile (to receive a security code). To reset your Schwab username or password, call Schwab at 1-800-515-2157.

Tax Forms, Tax Payments, & IRA Contributions

*Before contributing to your retirement account, first confirm the amount with your accountant

2025 Tax Forms 1099 & 1099R are issued by the end of February directly from Charles Schwab. Corrected 1099s can be issued through April. You will receive an email from Schwab when your documents are available. To get your tax forms, log into your Schwab online account at:

https://www.schwaballiance.com

Click the ‘Accounts’ tab at top left of screen

Click the ‘Statements & Tax Forms’ subtab towards right side of screen

Click the ‘1099 Dashboard’ drop down arrow

Then download or print your documents

Annual IRA & ROTH IRA contributions for 2025 tax year to be made by April 15, 2026: $7,000 if under age 50; $8,000 if 50 years old or older. The total can’t be more than your taxable compensation for the year.
Please make tax payment requests by the first week in April to guarantee the payment is made on time. Schwab can no longer send checks to the IRS.

Beneficiaries

Annually review and update your account beneficiaries to confirm accuracy, especially after major life events such as marriage, divorce, death, or having a baby.

To update your beneficiaries online, go to:

https://www.schwaballiance.com

Click the ‘Profile’ tab at top right

Click ‘Beneficiaries’ in drop down menu

Review & Update ALL accounts

Stock Market Holidays/ Office Closures

January 1, 2026 – New Year’s Day

January 19, 2026 – Martin Luther King Jr. Day

February 16, 2026—Washington’s Birthday

Schwab Alliance

schwaballiance.com/
Schwab Mobile App
1-800-515-2157

Secure, online access to your accounts is easy, visit the Schwab Alliance website or Schwab Mobile App to view account balances & transactions, access tax documents, open new accounts, and more.

Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pegasus Asset Management, Inc. [“Pegasus]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Pegasus. No amount of prior experience or success should not be construed that a certain level of results or satisfaction if Pegasus is engaged, or continues to be engaged, to provide investment advisory services. Pegasus is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the Pegasus’ current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.pegasusassetmgt.com. Please Remember: If you are a Pegasus client, please contact Pegasus, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Pegasus account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Pegasus accounts; and, (3) a description of each comparative benchmark/index is available upon request.