Market insights and analysis

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

2nd Quarter | 2021

Market insights and analysis


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

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.

Don’t let market volatility become your volatility

I’m sure most of you noticed the recent spike in market volatility during the last week of January, related in part to the highly unusual trading in heavily shorted stocks such as GameStop and AMC. The VIX volatility index, known as the market’s “fear gauge,” jumped to 37 on Wednesday, January 27. According to Bloomberg, this was “the biggest one-day move since the pandemic-spurred market crash” in March 2020. CNBC reported that the VIX closed on January 29 “with its biggest weekly gain since June [2020].”

Sticking with your investment game plan

Jerry Wagner, Flexible Plan Investments’ (FPI’s) founder and president, offered this piece of advice to financial advisers and investors in a recent article: “Have a plan and stick to it. As I’ve written many times, whether it is trying to invest by following headlines, financial talking heads, so-called market experts, or political predictions, none of these sources are likely to lead investors to long-term profits.

No one thing leads to success

Watching the NFL playoff games this past weekend, I noticed the winning teams’ quarterbacks got much of the credit and much of the press. But there are 53 players on each team’s roster and many more behind them contributing to each team’s success.

Remember what the Dormouse said

One of my favorite gifts for Christmas was Haley Reinhart’s album “What’s That Sound?” Reinhart was a finalist on “American Idol” in 2011. I was repeatedly surprised while watching the show by the range and emotive power of her singing voice, and I have followed her career ever since. In recent years, she has been one of the stars of Scott Bradlee’s popular Postmodern Jukebox shows.

Understanding the ever-changing world around us

It has been an unprecedented and news-packed start to the new year. Developments last week in Washington, new COVID-related challenges, the complex and ongoing vaccine rollout, Georgia’s Senate races, the realities of implementing the Brexit deal, and the state of the U.S. jobs market and manufacturing sector are just some of the major headlines since January 1.

Are you a fox or a hedgehog in your investing?

A short fragment of poetry over 2,600 years old set the academic world ablaze when it was cited in 1951. Attributed to one of the greatest Greek poets, Archilochus of the Greek island of Paros, was this simple phrase: “Πόλλ᾽ οἶδ᾽ ἀλώπηξ, ἀλλ’ ἐχῖνος ἕν μέγα.” The fox knows many things, but the hedgehog knows one big thing.

4 unconventional ways to manage risk in your portfolios

Over the years I have written about “Plan B Investing” and “Just-In-Case Investing.” Both of these are similar but different.

Expectations that can lead to bad investing

This week I was listening to an expert on investor psychology who stated, “Investors feel comfortable investing when markets are behaving as they expect.” That made me think about the piece I recently wrote about the emotions of fear, uncertainty, and doubt (FUD) and their often negative influence on investors’ decisions.

Kudos to financial advisers—and their clients

I wrote an article before Thanksgiving that, in part, praised the efforts of frontline medical workers, first responders, teachers, and others for their efforts during the 2020 pandemic. We all remain thankful for their outstanding efforts this year. Additionally, our thoughts go out to all who have had medical, employment, or financial issues during this crisis, especially as we come up to the holiday season.

And yet the virus caught me

I guess it is becoming increasingly common to have someone say, “I caught the virus.” Well, I tested positive on November 28. But I don’t feel like I caught the virus. I feel like it caught me. After all, I didn’t run after the virus—I tried to evade it.

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.

Things to be thankful for

For a variety of reasons, 2020 has engendered a wide range of strong emotions for many people: fear, uncertainty, anger, depression, resignation, loneliness, and (unfortunately) sadness and grief. But for many, there have been more positive and constructive responses: determination, commitment, hope, and a sense of community.

Special 2020 Election Update: Part 2

Two weeks ago, I wrote about the different scenarios that history teaches are possible based on the party in control of the presidency and Congress. This was done through the lens of our Political Seasonality Index (PSI) that I developed for a series of columns back in the nineties for Barron’s magazine.

Conquering FUD in investing

Recently I was listening to an interview with a marketing expert who was explaining how marketing campaigns are crafted to change the way people think, shop, and vote. The discussion really got my attention when the guest said that such campaigns are designed to escalate fear, uncertainty, and doubt among the audience. He referred to this approach as a “FUD campaign.”

When surprises occur in everyday investing

When we think of our lives or just talk about what we have been doing lately with a friend, we tend to focus on big events. If we have just started a new job or a baby was born, the event dominates our conversations. Similarly, in the news, election and pandemic news can consume the headlines and color what we think is occurring around us.

Differences matter

Differences matter

My involvement in politics as a volunteer, employee, and consultant stretches back more than 60 years. During that time, I have always been an advocate on behalf of specific candidates.

The Halloween season has always been one of my favorite times of the year.

Does every day seem the same as the last? That’s the complaint I hear most often as the pandemic wears on.

Taking personal bias out of the investing equation

I have spoken with many financial advisers lately, and, of course, one of the topics at the top of their minds was the recent presidential debate. Some of the advisers I spoke to are committed Democrats and some are committed Republicans. One would never have known that we all watched and heard the same event based on what we each thought we saw, heard, and understood—all of which was reflected through the lens of our personal bias.

Personal benchmarks

I can still feel the doorjamb pressed hard against the back of my head, each move causing a painful tug against an errant strand of hair. But I wanted to be there, and I strained to stretch my body upward, fighting the urge to resort to tiptoes. Dad took the ruler and balanced it evenly on the top of my head. He then quickly penciled in a line at its intersection with the molding behind me.


Over 2,500 years ago, in what may have been one of the earliest examples of behavioral finance theory, ancient Greek philosopher Aristotle is reported to have said the following regarding the achievement of success.

“Fiddler on the Roof” is one of the most enduring musicals written. It first previewed here in Detroit in 1964, and I’m sure regional or touring companies will continue performing it in the future for many years to come. And, of course, the movie version is always available!

It was over 30 years ago. I sat in a pew in a little church on the village green of Franklin, Michigan. It was the usual Sunday service, but I was stirred by the sermon from a minister who was still relatively new to me.

Why is the stock market so disconnected from what is happening in the economy? And why does it seem like all stocks—no matter what their quality—are going up?Just like you, we grapple with these complex market questions every day in our quest to bring investors better risk-managed investment solutions. These two are the ones I’ve been asked most frequently recently—which makes sense. It does seem like the market is acting illogically … but is it? Let’s take a closer look to see what’s behind it all.

It’s been 51 years since we have brought a new puppy into our household. Don’t get me wrong. We love dogs and have had quite a number over the years. But it took five decades—during which we rescued many young adult dogs—before we decided we would try adopting a six-month-old puppy again.

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.

Along with jigsaw puzzle purchases, the number of new people engaging in gardening has increased this year, as we spend more time at home due to the pandemic. As Rutgers University professor, Joel Flagler explains it, “There are certain, very stabilizing forces in gardening that can ground us when we are feeling shaky, uncertain, terrified really. It’s these predictable outcomes, predictable rhythms of the garden that are very comforting right now.”