By Jerry Wagner The invitation to our holiday party a few years read “Dress: Cocktail.” One of our guests, John Zilli, wondered, “What exactly does that mean?” He Googled it. Knowing John, I’m sure he studied many of the Google responses. The best was quite specific. It said, “If you have a velvet sports jacket, now’s the time to use it.” As it happened, John had a velvet jacket tucked away in his normally minimalist closet. He wore it to the party and looked quite festive! Reminiscing about that night makes me think about all of the things we keep around the house but only use once in a while when we really need them. Seasonal items, like John’s coat, are typical of this. Because they are only used once a year, it seems they just get in the way when we stumble across them at any other time. Invariably, the thought crosses our minds, “Do I really need this?” Fortunately, at least around our house, we have lots of storage and are able to leave the item alone. That is, until we really need it—like when my wife lugs out the Cuisinart to make onion soup, or when company comes for breakfast and the long-dormant waffle iron appears. Ever been at a football game when a fall rain begins? What a relief when you check your jacket pocket and the folded cellophane rain poncho is still nestled deep inside. You might have shifted it from pocket to pocket all year long, but, right then, you know you really need this. So it is with money management. We can’t just plan for when the financial sun is shining. Instead, we have to plan for when we are really going to need help. Of course, when the market is rallying, no one needs any assistance … right? And when the market falls only 5% to 10%, you don’t know whether to get out or ride it out. Of course, what risk management is all about is being able to minimize the losses when a bear market is a real possibility and values fall by 20%, 30%, 40%, or more. The problem is, risk is always with us. It can raise its head at any time, and a correction can turn into a crash like a snowfall can become an avalanche. At Flexible Plan Investments, we believe that risk management should always be a part of your financial plan. And because bear markets can occur at any time, diversification is not enough. You need to have your assets guarded with disciplined, rule-based, dynamic strategies that can monitor the market and make changes when you need them. There’s still time to add dynamic risk management to your portfolio. Instead of investing only in a passive core portfolio, match it with a dynamic core that adds some guardrails to keep you on the road instead of in the ditch. With all of the market volatility of late, time could be running out. When financial adversity strikes, it is hard to deal with it, unless you have what you need when you really need it.