Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

4th Quarter | 2021

Market insights and analysis


Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.

Change is a constant

As has probably been the case for all of you, change has been a significant part of my life. I was fortunate that when I attended college, times they were “a-changin’.” The computer age was dawning. I was able to see the potential of combining traditional investment analysis with the powerful abilities of the PC. A change was necessary. The type of analysis I wanted to do was too computational. It was too intensive to do by hand, and it was not easily repeatable.

A few years ago, staff members were waiting for us at the airport, which was teeming with people when the transatlantic plane touched down. In a crowded, cavernous room, with signs everywhere, they found our luggage and escorted us through customs. Whisked into a private car, they sped us to the dock and our rivercraft.

They say New Year’s resolutions are meant to be broken. I am sure there are at least a few readers of this article who are already frustrated—10 days into the year—by their inability to follow through on some of their well-intentioned resolutions.

Seasonal musings

When I sat down to write this article, my wife was beginning to take down the Christmas decorations. She loves Christmas and tries to make our home as festive as possible for the holidays. When they all come down in January, it is a bit depressing.

When I was still a teenager, I began a bad habit. While thinking about the future, I would always reference “someday.” The big decisions: Someday I’ll get a job. Someday I’ll get married. Someday I’ll buy a home. Someday I’ll have children. Someday I’ll retire. Someday I’ll have grandchildren. The smaller ones: Someday I’ll get a new car. Someday I’ll lose weight. Someday I’ll go to Europe.

Even with new variants of COVID, the tradition is hard to end. Last year, many firms abandoned the company Christmas party due to state-mandated shutdowns and a virus-frightened populace. But this year, tradition won out, and the holiday party was reinstated.

I visited New York City a few years ago. I sat for over an hour as the plane was prepared and de-iced in the middle of what seemed to be unending snowfall. As I watched the snowflakes dance about outside my window, I was struck by their quick and random movements. Although a part of the same storm, each individual snowflake seemed to have a mind of its own.

Each year, Proactive Advisor Magazine publishes reviews of major trends in the wealth-management industry, especially those related to managed investment accounts; the use of third-party investment managers; and viewpoints on active, risk-managed investment strategies.

It was the fall of 1956. Action from the World Series blared from the radio. It was the New York Yankees versus the Brooklyn Dodgers, game five. Don Larsen threw his 97th pitch. “Strike!” called the umpire, and the audience witnessed perfection. Twenty-seven batters up, 27 retired—all without a hit, walk, or error. The perfect game.

With Thanksgiving fast approaching, on behalf of Flexible Plan Investments (FPI), I would like to thank the many people who have worked with our company this year: our investor clients, financial advisers, our third-party partners throughout the investment industry and elsewhere, and members and businesses of our local community.

But what if …?

I love to meet with clients. Like the bite of a cold wind on a frosty November morning in the Midwest, a meeting with a client can bring an adviser back to the concerns of actual people trying to survive in a real economy.

We all have insurance of some kind—health, auto, life, disability, renters, and/or home. Just in case … When we drive, we have our seat belts and lots of new safety features for our car, like airbags.

Fences are usually used to separate property owned by two different people. Being “on the fence” means that you’re unable to make up your mind, unable to choose between two positions, balanced precariously, in neither one world nor the other.

Countless news reports and research studies have examined the consequences of the COVID-19 pandemic in the U.S. over the past two years. As important a topic as it might be, we may all be experiencing a degree of information overload.

It’s almost Halloween, and we’re still in the middle of a scary period in the stock market. September is known as the worst-performing month of the year. October is the most volatile. Could there be a better time to discuss what frightens investors most—the things that go bump in the night?

Whether you are talking to portfolio managers, researchers, financial advisers, or marketing experts in the financial-services industry, the conventional wisdom seems to be that investors are motivated primarily by two emotions: greed and fear.

I seem to say this each year around the beginning of October: It’s hard to believe the NFL football season is already a quarter gone. (Though I have to keep reminding myself that it is 17 games for the first season ever.)

I’ve been dealing with knee problems for several years now. As a result, I started reviewing medical literature looking for options. During my research, I read a blog post by Dr. Kevin Stone of the San Francisco–based Stone Clinic. The clinic is considered one of the leading knee clinics in the county. It is the first stop for many pro athletes dealing with knee injuries.

Bring on the future

A few years ago, two things made me think about what Flexible Plan does from a different perspective.

Since I began investing in the late 1960s, I have always been in the active investing camp. When I started Flexible Plan Investments, Ltd., in 1981, the only investment services we offered were active management (and that is still true today). I thought an investment manager should be “flexible” rather than locked into a rigid buy-and-hold approach.

Remembering 9/11

I cannot imagine writing about any other topic this week than the 20th anniversary of 9/11.

Eleven years ago, I wrote about the triumph resulting from having a plan B. In today’s headlines, we can see what happens when there is no plan B.

Investors received a small taste of downside volatility last week, with the major indexes recovering on Friday to see only a small weekly decline.

In medicine, as in sports, much of the excitement is generated by the knockout punch—the quick, single action that is going to end both a fight and an illness. But just as we often saw in the Olympics, and as we are increasingly finding in medicine, the practical solution comes in the combination, the one-two punches, that score the most points and earn a victory.

The Declaration of Independence sets out one of our “unalienable Rights” as “the pursuit of Happiness.” Yet there has been much debate over the centuries about what happiness truly is and how we can obtain it.

As I was writing this article on Monday morning (August 2), the Dow Jones Industrial Average put in an all-time intraday high, and the other major indexes were not that far from their own all-time highs. Of note, the S&P 500 was close to doubling the closing daily pandemic lows of March 2020 (2,237.4)—a remarkable performance.

Some may be surprised to find out that finance wasn’t my first chosen career path. I grew up wanting to be a marine biologist. I was so committed that I took six years’ worth of math classes and six years’ worth of science classes while in high school to prepare for college.

As humans, we love to mark special events. They’re an opportunity to come together and celebrate with our friends and relatives from near and far.

Two weeks ago, I wrote about interviewing a few different advisory teams in 2021 that are relatively new to the world of managed accounts, dynamically risk-managed strategies, and the overall philosophy of holistic active portfolio management.

Recently I was reading a special Spotlight issue of Proactive Advisor Magazine, a free weekly magazine dedicated to promoting and educating the adviser community on active investment management. The issue focused on the active versus passive management debate. It contained three short articles by a researcher, a member of an investment performance database and publishing firm, and a behavioral finance professor. All concluded that active management should coexist with passive management, but for different reasons.

I have interviewed a few different advisory teams for Proactive Advisor Magazine in 2021 that are relatively new to the world of managed accounts, dynamically risk-managed strategies, and the overall philosophy of holistic active portfolio management.

many clocks

Since the beginning of recorded history, living in the moment has been valued. In Buddhism, it’s said that “being mindful of the present is the key to happiness.” And according to Matthew 6:34, Christ said, “So do not worry about tomorrow; for tomorrow will care for itself.”

Like many advisers and investors who have been following the news lately, you may be wondering how the state of inflation and interest rates will affect your investments.

It can be good to be a part of the herd

I never liked the concept of people being referred to as part of a herd. Yet it has become pretty common in the media.

Is the economic glass three-quarters full?

In early May, my previous article asked the questions, “Have the Roaring ‘20s returned?” and “How good will it get for the economy?” as optimism improves regarding many significant aspects of the COVID pandemic in the U.S.


Like a skeleton found in a closet, investors discovered in the first quarter of 2020 that their portfolios were not being managed in the manner in which they had believed.

Concerned about what the market will do next?

If you’re like many people I’ve talked to lately, you may be concerned about what the market has in store when the current bull market comes to an end. Will we see a bear market decline in the 30%–40% range? Or, will it be a debilitating decline in the 50%–60% range like we have experienced twice in the past 20 years? No one knows.

The “Easy Button” is for real

It seemed like magic. Push the little red button and it transformed your life. That was the message of an early 2000s marketing campaign from Staples. I loved the thought of it. One touch, no further work or involvement, and your problems were solved.

Have the Roaring ’20s returned?

In an upcoming Proactive Advisor Magazine article, the author (a successful financial adviser) writes about a behavioral finance issue affecting several of his clients. As opposed to the typical fear seen in severe market declines, these clients are fearful about the sustainability of the massive market rally since March 2020. Whether you call it fear or greed, they do not want to see their current portfolio gains diminished.

Examining key factors of ESG investing

Last week we celebrated Earth Day. At this time of year, many investors reflect on the state of our planet and what they can do to make an impact. For some, this includes how and where they invest their money.

When you go to a restaurant (remember those?), you know if you had a good meal. And you know if the service is above average and deserving of a larger tip than usual. Your five senses give you all the answers. But what about your investment manager? How do you know if he or she or they are doing a good job of managing your investments for you? The easy answer is, “Look at their performance.”

Don’t let your heart rule your investments

This week, I want to talk about a well-documented pattern of investor behavior that does not serve their best interests: letting emotions rule investment decisions. We originally posted a version of this article last year just before the COVID crash.

Que será, será: Terrible investing advice

Doris Day, a top box-office draw of the 1950s and early ’60s, has always been one of my favorite entertainers.

The importance of being “money smart”

Did you know that April is Financial Literacy Month? And that April 10–17, 2021, is Money Smart Week? Financial Literacy Month was designated officially by the United States Senate in 2004 via Resolution 316, during the administration of George W. Bush. (Interestingly, Barbara Bush was passionate about many literacy causes and started the Barbara Bush Foundation for Family Literacy in 1989.)

Why dynamic risk management is right for investor portfolios

Since I began investing in the late 1960s, I have always been in the active investing camp. When I started Flexible Plan Investments, Ltd., in 1981, the only investment services we offered were active management (and that is still true today). I thought an investment manager should be “flexible” rather than locked into a rigid buy-and-hold approach.

Is your portfolio ready for takeoff?

Before the pandemic, we used to invite financial advisers to visit our home office. These visits let us get to know advisers better and allowed advisers to meet the people who make good things happen behind the scenes when they engage us as a third-party money manager for their investor clients.

In investing, as in life, it’s all relative

A couple of years ago, I was at physical therapy for a back ailment. They had me begin on the treadmill. Trudging along, time seemed to drag. Reaching the end of the exercise interval seemed like a distant goal. As I looked around the room in abject boredom, I noticed a group of therapists chatting away with another client. They were animated. The level of chatter increased. They were so engaged!

Visualizing the benefits of risk management

A few weeks ago, I wrote about a financial adviser’s analogy between the strategy in a Kansas City Chiefs 2021 playoff game and investor behavior. In that example, the point was how financial advisers could help their clients with the concept of “behavioral adherence,” or sticking with a well-constructed and risk-managed investment plan even when times get tough.

Why it pays to have a flexible portfolio

When I get the opportunity to share my thoughts in this column, I generally pull from my recent conversations with financial advisers and their clients.

Staying relevant over the long run

I was listening to one of my favorite early morning radio shows last week. While it offers hard national and local news, it also features some lighter lifestyle stories. That can be a welcome change of pace these days.