Table of Contents

• Q1 2026 Vista Plan Performance and Market Conditions
• March 2026 Fund Performance Chart
• The Stock Market – Historically Speaking
• Traditional 401(k) & Roth 401(k) Explained
• Consolidation of Qualified Retirement Plans 
• Nuts and Bolts – How to Invest Your DROP Funds
• The Drop Box
• Helpful Hints

Welcome to Vista 401(k)!

Q1 2026 Plan Performance

By Constantine Mulligan, Director of Investments Partner, Cerity Partners LLC

Vista 401(k) Plan Fund Performance

For retirement plan portfolios, the macro backdrop continues to support a balanced but cautious stance. The U.S. economy appears positioned for slower, but sustainable, trend-level growth, while global conditions remain uneven. Inflation is easing without clear signs of a hard landing, allowing central banks to transition toward gradual rate normalization. The first quarter of 2026 was defined by the US-Israeli military campaign against Iran, which introduced significant volatility into energy markets and rippled across equities and fixed income. While the near-term disruption is meaningful, the focus for retirement plan sponsors should remain on how these developments influence diversification, risk management, and outcomes across full market cycles.

Key themes to monitor:

• Energy-Driven Inflation Resurgence: The closure of the Strait of Hormuz sent oil prices sharply higher, reigniting inflationary pressures that had been steadily moderating. Higher energy and food costs are weighing on consumer spending and compressing corporate margins.
• Monetary Policy on Hold: The Fed held rates steady at 3.50%–3.75% and has shifted to a “wait and see” posture. Further rate cuts are likely off the table for now unless the conflict resolves quickly, and the possibility of rate increases has entered the discussion if energy prices rise.
• Earnings Growth Persists Amid Multiple Compression: S&P 500 earnings grew 13% year-over-year in Q1, driven by AI monetization in the technology sector, but higher rates and geopolitical risk premiums compressed valuations.
• Fixed Income Adjusting to a New Regime: The yield curve shifted higher and is now fully upward sloping. Credit spreads widened modestly from historically tight levels but remain contained.
• Geopolitical Risk as the Dominant Variable: The duration of the Iranian conflict and its impact on global energy infrastructure will drive the trajectory of inflation, monetary policy, and corporate earnings for the balance of the year. Resolution would support a meaningful market rebound.

These dynamics underscore why a disciplined, diversified approach matters most in precisely the environments where it is hardest to maintain. Geopolitical shocks test investor resolve, but the fiduciary framework governing this Plan (grounded in broad diversification and long-term orientation) is purpose-built for periods like this.

The Plan’s investment lineup remains well positioned to absorb near-term dislocations without compromising long-term retirement outcomes. Spanning asset classes, geographies, and sectors, the menu provides participants with the tools to stay invested through volatility rather than react to it. Participants who maintain their contribution schedules and asset allocations during market stress consistently capture the recovery gains that drive compounding over a full career of saving. The current environment is a reminder that retirement readiness is built through decades of steady participation, not quarters of market timing.

FOR OUR CLIENTS WHO WISH TO TAKE A DEEPER DIVE, WE HAVE PROVIDED THE FOLLOWING ECONOMIC AND MARKET COMMENTARY. THIS WILL PROVIDE AN EXPLANATION OF THE OVERALL MACRO AND MICRO ECONOMIC FACTORS INFLUENCING THE MARKETS AND, IN TURN, YOUR VISTA 401(K) ACCOUNT. IF YOU HAVE ANY QUESTIONS OR WISH TO DISCUSS THESE MATTERS IN GREATER DETAIL, PLEASE CONTACT US AT 866-325-1278 OR E-MAIL US AT 401K@VISTA401K.COM.

First Quarter 2026 Economic and Market Review & Second Quarter Outlook 

The defining event of the first quarter was the joint US-Israeli military campaign against Iran beginning February 28, which injected extraordinary volatility into energy markets and spilled over into equities and fixed income. Heading into 2026, the backdrop had been cautiously optimistic: resilient economic growth, moderating inflation, an encouraging corporate earnings outlook, and a Federal Reserve continuing along a path of monetary easing.

The onset of hostilities abruptly changed that calculus. Iran’s closure of the Strait of Hormuz, through which approximately 20% of global oil supply flows, sent Brent crude surging 73% in the quarter, with US benchmark West Texas Intermediate breaching $100 per barrel for the first time since mid-2022. The International Energy Agency responded with a historic release of 400 million barrels from emergency reserves. Gasoline prices rose to around $4 per gallon, their highest level since late 2023.

Prior to the conflict, the US economy showed signs of deceleration. Fourth-quarter 2025 GDP growth was revised to an annualized 0.7%, the labor market cooled with February payrolls falling by 92,000, and the unemployment rate edged up to 4.4%. Inflation continued grinding toward the Fed’s 2% target, with CPI at 2.4% year-over-year in both January and February. The Fed held rates steady at 3.50%–3.75% at its January and March meetings, adopting a “wait and see” stance. The FOMC’s March projections showed a median expectation of just one rate cut in 2026, with 7 of 19 participants projecting none.

On the fiscal front, the legislative effects of last year’s One Big Beautiful Bill Act continued to unfold, with new income tax provisions beginning to flow through as higher refunds, a timely offset to the hit consumers are absorbing from gasoline prices. However, the budgetary picture grew more complicated as President Trump called for $1.5 trillion in defense spending to replenish reduced military stockpiles.

The S&P 500 posted five consecutive weekly declines to finish the quarter down 4%, its worst start to a year since Q1 2022. The 10-year Treasury yield rose from 4.19% to 4.34%, reflecting higher inflation expectations and an uncertain fiscal outlook. Credit spreads widened from historically tight levels, though the move was measured relative to past geopolitical stress episodes. Gold hit a record near $5,600 per ounce in January before reversing sharply in March as some central banks liquidated reserves to raise cash amid the energy shock.

Equities

S&P 500 first-quarter earnings are expected to grow 13% year-over-year (the fifth consecutive quarter of double-digit growth) driven largely by the information technology sector where AI monetization continues to deliver sharply higher revenues. However, higher interest rates and elevated geopolitical risk premiums compressed valuation multiples, producing the quarter’s declines. Energy stocks were the clear sector winner given the oil price surge, while technology and software names struggled. An encouraging breadth of market participation that had developed in late 2025 and early 2026 is now at risk; should higher commodity prices slow the economy and compress margins, there would again be a premium on the narrower set of companies and sectors that can still generate growth. A protracted conflict driving energy prices higher would pressure profit margins in cyclical sectors, and a potential helium shortage threatening semiconductor supply could temporarily disrupt the powerful secular AI investment theme. A quicker resolution would allow earnings growth to reassert itself and equities to rebound. International equities in Europe and Japan, which are more cyclically exposed, would benefit most from an early end to hostilities, while commodity-producing emerging markets have already posted positive returns.

Fixed Income

The Treasury yield curve shifted higher and is now fully upward sloping, with some distinctive flattening that may signal the second stage of a protracted commodity price shock, tighter monetary policy eventually slowing growth, with a worst-case inversion signaling recession. Credit spreads widened but remain near historic lows; high-yield bonds appear fairly valued to slightly expensive at current levels. Municipal bonds outperformed taxable counterparts on limited new supply and historically better credit underwriting standards, a relative performance dynamic likely to persist if energy prices continue to slow activity. Private credit has faced headline risk from markdowns and higher default activity in software holdings, though the remaining sectors in both public and private debt appear sound.

Monetary Policy & Outlook

Unless the conflict ends early in Q2, further Fed rate cuts are likely off the table for the remainder of 2026 as energy-driven inflation pressures build across the broader commodities complex. The Fed is not yet seriously discussing tightening, and the incoming Fed chair Kevin Warsh is expected to lean incrementally dovish, but investors should prepare for the possibility of rate increases if energy prices rise further, a scenario that would likely produce notably slower economic growth. First-quarter US GDP growth estimates fell from 3.0% to 2.0% as the conflict’s impact was absorbed.

Consumer spending faces headwinds from higher energy and food costs, and consumption has recently exhibited a bifurcated pattern: higher-income households continue spending at elevated rates supported by the wealth effect from appreciating securities and real estate, while lower-income cohorts have struggled with stagnant job and wage growth. AI-driven corporate capital spending remains an important structural growth driver, and if energy prices stay elevated, additional capital expenditures in the energy sector could partially offset the drag. The European Central Bank is already signaling potential rate increases in response to commodity inflation, with markets pricing in two 25-basis-point hikes in the coming months.

What We Are Watching

Key signposts we are monitoring include the trajectory of oil and natural gas prices, Fed communication on the inflation-versus-growth tradeoff, the evolution of credit spreads as an early recession indicator, and any resolution of semiconductor supply disruptions tied to helium shortages. The US dollar has appreciated roughly 3% since the conflict began and remains a reliable safe-haven asset, though the expected dovish leaning of the Fed under its new chair may exert renewed selling pressure once hostilities end. We will continue to monitor these developments closely and communicate any changes in positioning as conditions evolve.

March 2026 Fund Performance Chart

The Stock Market – Historically Speaking

Financial markets often appear fragile in the face of major global crises, yet history shows a remarkably consistent pattern: over the long term, markets tend to rise despite wars, recessions, pandemics, and political upheaval. This resilience reflects the underlying adaptability of economies, human innovation, and the forward-looking nature of investors.

One of the clearest examples comes from the early 20th century. The global economy endured World War I, the Great Depression, and World War II within a span of just a few decades. These events caused massive destruction, widespread unemployment, and deep uncertainty. Stock markets experienced sharp declines, sometimes losing the majority of their value. However, each time, recovery followed. By the post-World War II era, markets entered one of the strongest and most sustained growth periods in history, fueled by industrial expansion, technological progress, and rising consumer demand.

The pattern continued in the latter half of the century. The 1970s brought oil issues, stagflation, and geopolitical tensions. Markets struggled during this period, yet the subsequent decades saw substantial growth driven by globalization, deregulation, and the rise of new industries such as information technology. Even severe one-day events, such as the stock market crash of 1987, proved temporary. Within a relatively short time, markets recovered and continued climbing.

The early 21st century provides even more examples. The dot-com bubble burst in the early 2000s, wiping out trillions in market value. This was followed by the September 11 attacks, which shook global confidence. A few years later, the 2008 financial crisis triggered a deep global recession and widespread fear about the stability of the financial system. In each case, markets fell sharply—but they eventually rebounded, often reaching new highs within years. The recovery after 2008 led to one of the longest bull markets ever recorded.

More recently, the COVID-19 pandemic caused one of the fastest market crashes in history, as economies shut down and uncertainty surged. Yet the recovery was nearly as dramatic. Markets rebounded within months, driven by unprecedented policy support, rapid vaccine development, and the acceleration of digital transformation. Investors who remained focused on the long term were rewarded as markets did not take long to surpass their pre-pandemic levels.

This recurring pattern can be explained by several factors. First, markets are forward-looking. Prices reflect expectations about the future rather than current conditions. Even during crises, investors anticipate eventual recovery and price assets accordingly. Second, human ingenuity plays a crucial role. Businesses adapt, new technologies emerge, and productivity improves over time. These forces drive economic growth, which ultimately supports higher market valuations. Third, diversification and the broad nature of modern economies help absorb shocks. While specific sectors may suffer, others often thrive under new conditions.

None of this suggests that markets are immune to risk or that declines should be ignored. Short-term volatility can be severe and emotionally challenging. However, history demonstrates that catastrophic events, while impactful, have not derailed the long-term upward trajectory of markets.

For investors, the key lesson is perspective. Traumatic events are inevitable, but they are also temporary in the context of long-term economic progress. Patience, discipline, and a focus on long-term fundamentals have consistently proven more effective than reacting to fear.

Please see a historical view of the stock market outlined below.

Wall of Worry – This must be added to the end of the article above – “The Stock Market – Historically Speaking”

Traditional 401(k) & Roth 401(k) Explained

A 401(k) plan is one of the most widely used and effective tools for building retirement savings. Offered by many employers, it is a tax-advantaged investment account designed to help workers set aside a portion of their income for the future. While it may seem complex at first, understanding how a 401(k) plan works can make a significant difference in your long-term financial security.

At its most basic level, a 401(k) plan allows employees to contribute a percentage of their paycheck into a retirement account. These contributions are made automatically through payroll deductions, which makes saving consistent and convenient. Because the money is set aside before it reaches your bank account, it reduces the temptation to spend it and helps build a disciplined savings habit over time.

Traditional 401(k)

One of the primary benefits of a traditional 401(k) plan is its tax advantage. Contributions are made with pre-tax dollars, meaning they reduce your taxable income in the year you contribute and thereby lower your current tax bill while allowing your investments to grow tax-deferred. This means You won’t pay taxes on the contributions or earnings until you withdraw the money in retirement, at which point it is taxed as ordinary income. This structure can be especially beneficial if you expect to be in a lower tax bracket later in life.

Roth 401(k)

Many employers also offer a Roth 401(k) option. With a Roth 401(k) plan, contributions are made with after-tax dollars, so there is no immediate tax break. However, the major advantage is that qualified withdrawals in retirement—including investment gains—are completely tax-free. Choosing between a traditional and Roth 401(k) plan often depends on your current income, expected future tax rates, and personal financial strategy.

The Vista 401(k) plan offers mutual funds, target-date funds, and a guaranteed fixed interest fund. Each option carries different levels of risk and potential return. Younger investors often choose more growth-oriented investments, such as stock funds, while those closer to retirement may prefer more conservative options like bond funds. Target-date funds automatically adjust this mix over time, making them a popular choice for those who want a hands-off approach. A guaranteed fixed interest fund is for those who are entirely risk averse.

A key concept that makes 401(k) plans so effective is compounding. Compounding occurs when your investment earnings generate their own earnings over time. For example, returns earned this year can earn returns in future years. The longer your money remains invested, the more powerful this effect becomes. This is why starting early—even with small contributions—can lead to significantly larger balances by retirement.

There are, however, some rules and limitations to be aware of. The government sets annual contribution limits, which may change over time. Additionally, withdrawing money before retirement age can result in taxes and penalties, discouraging early use of these funds. Required Minimum Distributions (RMDS), which apply later in life, mandate that you withdraw a certain amount each year.

In summary, a 401(k) plan is a structured, tax-advantaged way to save and invest for retirement. With benefits like automatic contributions, tax incentives, and long-term growth through compounding, it remains a cornerstone of financial planning. By understanding how it works and contributing consistently, individuals can build a strong foundation for a secure and comfortable retirement.

If you have any questions or wish to discuss a Vista 401(k) plan in greater detail, please contact the Retirement Services Department at (866) 325-1278.

Consolidation of Qualified Retirement Plans

It is common for individuals to accumulate multiple retirement accounts over time. Changing jobs can leave you with a mix of old employer-sponsored plans scattered across different providers. While each account may have served its purpose at the time, managing several retirement plans can become unnecessarily complex. Consolidating those accounts into your current Vista 401(k) account can be a smart, strategic move that simplifies your financial life and strengthens your long-term retirement strategy.

One of the most immediate benefits of consolidation is simplicity. Keeping track of multiple accounts means juggling different logins, statements, investment options, and fee structures. This fragmentation increases the likelihood of overlooking important details, such as asset allocation or required updates. By rolling your previous retirement plans into your Vista 401(k) account, everything is in one place, making it easier to monitor performance, rebalance investments, and stay aligned with your goals.

Another key advantage is improved visibility and control over your asset allocation. When retirement funds are spread across several accounts, it can be difficult to see your overall investment picture. You might unknowingly be overexposed to certain sectors or under-diversified in others. Consolidation allows you to evaluate your portfolio as a whole and make more informed decisions. The Vista 401(k) plan offers streamlined investment options, such as target-date funds or a diversified selection of mutual funds, which can help you maintain an appropriate balance based on your risk tolerance and time horizon.

Consolidation can also make it easier to manage required minimum distributions (RMDs) later in life. When you reach the age at which RMDs become mandatory, having multiple accounts means calculating and withdrawing the correct amount from each one. This can be time-consuming and increases the risk of errors, which may result in penalties. A single, consolidated account simplifies this process and helps ensure compliance with distribution rules.

From a behavioral standpoint, consolidation can encourage more consistent engagement with your retirement savings. When accounts are scattered, it’s easy to neglect older plans or lose track of them entirely. Rolling all retirement accounts into your Vista 401(k) account creates a clearer connection between your contributions, investment performance, and long-term goals.

Consolidating multiple retirement plans into your Vista 401(k) account is about clarity, efficiency, and control. By simplifying your accounts and gaining a comprehensive view of your investments, you position yourself for a more organized and effective approach to retirement planning. Over time, this streamlined strategy can make it easier to stay on track and build the financial security you’re working toward.

Nuts & Bolts: How to Invest Your DROP Funds

How to Invest DROP Funds in Your Traditional Vista 401(k) Account:

• Let the Florida Retirement System (FRS) know you would like to roll your DROP funds into your Traditional Vista 401(k) Account.
• Should you choose to roll your funds into your Traditional Vista 401(k) Plan, the Vista 401(k) Retirement Services Department sends a rollover form to you to complete and return to Retirement Services.

Note: If you do not have a Traditional Vista 401(k) Account, you need only set one up prior to retirement and fund it with at least one payroll contribution. Please be aware that you cannot roll your DROP funds into your Roth Vista 401(k) Retirement Plan.

Why Roll Drop Funds into Your Traditional Vista 401(k) Account: 

• Consolidation: Individuals often accumulate multiple retirement accounts over their career. Consolidating these accounts makes it easier to track performance, adjust asset allocation, and plan for your financial future. Consolidation not only streamlines your financial strategy but also provides a clearer picture of your overall retirement readiness.
• Tax Advantages: DROP funds are treated as income the year they are paid out to participants. If you do not place these funds in a tax-deferred account, the funds will be treated as income in that year. However, if you roll them into a tax-deferred plan like the Traditional Vista 401(k) Plan, taxes will be taken as you withdraw funds over the years. By then you may be in a lower tax bracket.
• Portability: Your DROP funds are portable. This means that should you choose to roll these funds out of your Traditional Vista 401(k) account, you can do so with no waiting period or penalty.

Please call us at (866) 325-1278 if you have any questions. You may also visit Vista401k.com to make changes.

The DROP Box

• Are you enrolled in DROP and close to retiring?
• Do you have questions about what to do with your DROP benefits?
• Would you like to speak with a 401(k) Plan Specialist about your distribution options?

CALL 866-325-1278 or EMAIL 401k@vista401k.com

• If you qualify for normal retirement from the School Board and reach the age of 55, you qualify to withdraw your funds without incurring the age 59½ withdrawal penalty from your Traditional 401(k) Plan. This means that if you choose to rollover your DROP funds to your Traditional Vista 401(k) Account, instead of a traditional IRA, you can withdraw funds before age 59½, without a penalty.

If you entered DROP in 2021, your DROP benefit will be distributed in 2026.

We also accept rollovers from your BENCOR, 403(b) or 457 accounts, so you can have all of your retirement funds in one convenient account. Call us at 866-325-1278 or email us at: 401k@vista401k.com for one-on-one support from our experienced Retirement Services Team.

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The material herein is provided for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. The material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations. Situations differ among individuals and you should not assume that these generalizations or information apply to you. Keep in mind that past performance is no guarantee of future performance, and investments involve the risk of loss of principal and earnings. Additionally, neither your employer nor the plan administrator nor FBMC is able to provide you with investment advice–if you would like specific investment advice, you should consult Cerity Partners or your own personal investment advisor.