A strategy that never changes isn’t stable. It’s just married to its first assumption

By Jerry Wagner

There is nothing wrong with making an assumption. Every investment strategy starts with one.

Buy and hold assumes that staying invested through market cycles will be rewarded over time. Value investing assumes that price eventually matters. Trend following assumes that strength and weakness can persist. Tactical management assumes that observable market conditions can help guide exposure.

The issue is not whether a strategy has an assumption. They all do.

The issue is whether the strategy is willing to revisit that assumption when the facts change.

That is why I keep coming back to this thought: A strategy that never changes isn’t stable. It’s just married to its first assumption.

Buy and hold can be a useful part of a portfolio. But if it is treated as the whole plan, advisers should ask whether the portfolio is truly stable—or simply loyal to an old premise.

Long term does not have to mean motionless

One common misunderstanding about active management is that it somehow opposes long-term investing.

I do not see it that way.

A farmer is long term. He still rotates crops. A business owner is long term. She still adjusts inventory, pricing, staffing, and capital spending as conditions change. A coach is long term. He still changes the play when the defense shifts.

An investor can be long term and still believe risk should be managed.

The question for advisers is not whether to abandon long-term investing. The question is whether the portfolio has rules for responding to changing risk, changing opportunities, and changing client objectives.

If the answer is no, the client may not have a risk-management process. The client may simply have patience. Patience is useful, but it is not a substitute for a plan.

The danger of being right too late

Markets have a way of making rigid strategies look smart—until they do not.

In long bull markets, buy and hold can look unbeatable. The investor who changes nothing appears disciplined. The adviser who recommends patience appears calm. The portfolio with the most market exposure often has the most attractive recent return.

Then the environment changes.

Rates rise. Inflation appears. Leadership narrows. Volatility returns. A few dominant stocks may carry the indexes while much of the market struggles. Or the trend reverses so quickly that yesterday’s comfort becomes today’s problem.

At that point, the buy-and-hold investor may still be right in the very long run. But that may not help the client who needs income now, confidence now, or a portfolio review now.

Clients do not experience performance in 30-year charts. They experience it in quarterly statements, retirement conversations, tax decisions, required distributions, and anxious phone calls.

That is why stability should be measured by whether a process can adapt—not by whether it refuses to move.

Evolution Plus: A strategy built to change when markets change

This is where Flexible Plan Investments’ (FPI’s) Evolution Plus has been especially relevant.

Evolution Plus is a dynamic, risk-managed investment process that FPI uses in multiple formats.

For mutual fund investors, that process is used to systematically manage the Quantified Evolution Plus Fund (QEVOX). For separately managed account (SMA) investors, it is also available through the QFC Evolution Plus strategy, which uses QEVOX along with other defensive Quantified Funds, all sub-advised by FPI, to create five suitability-based profiles: Conservative, Moderate, Balanced, Growth, and Aggressive.

The Evolution process looks across 12 primary exposures: S&P 500, NASDAQ 100, Russell 2000, international equities, emerging markets, long-term Treasurys, intermediate-term Treasurys, gold, commodities, real estate, the U.S. dollar, and cash. It does not assume that one of those markets will always lead.

Offensively, it ranks the candidates by relative momentum to find the best performers and weights them based on risk and correlation. Then, for added defense, it applies an absolute momentum test to determine whether the surviving holdings are actually rising. If they are not, defense can move to cash.

The fund can also use leverage. It’s a dynamic, multi-asset model that uses leverage at a target of 2X exposure to individual asset classes to seek greater upside capture, while using a hedge of defensive cash allocations to limit downside capture.

The QFC Evolution Plus SMA adds another layer. By combining QEVOX with other defensive Quantified Funds, the SMA structure allows advisers to align the strategy with a client’s suitability profile. A Conservative investor and an Aggressive investor may both benefit from a dynamic process, but they should not necessarily ride the same version of it.

That is the point.

Evolution Plus is not married to a single market assumption. It does not assume the S&P 500 must always lead. It does not assume bonds will always provide the same defense. It does not assume gold, commodities, international equities, or cash should be ignored simply because they are not part of a traditional U.S. stock-and-bond conversation.

It asks what is leading, what is weakening, how much risk is being taken, and whether the current exposure still fits the evidence.

That flexibility has mattered in 2026. As of August 18, 2026, the fund had a year-to-date total return of 51.00%. This compares with 13.1% for the S&P 500 over the same period.

Those are eye-opening numbers. They should be discussed and understood correctly.

The fund has not always led. It has lagged the S&P 500 in the past. And it isn’t an S&P substitute—its correlation to the index is just 0.44 (from inception through August 18, 2026, monthly data). That’s because it always has a diversified universe of assets to draw on that the index doesn’t contain. So when stocks faltered early in 2026, it responded by investing heavily in commodities.

The point is not that Evolution Plus found a magic formula. There is no such thing. The point is that a dynamic process had the ability to participate in areas showing strength, use leverage when conditions supported it, size exposure with risk in mind, and avoid remaining fixed to an allocation that no longer matched the market environment.

That is what active management is supposed to do, and what a static allocation is not designed to do.

Changing is not guessing

Critics of tactical investing sometimes describe change as if it were the same thing as guessing.

That is not how we view it.

Guessing is emotional. Guessing is impulsive. Guessing is making a portfolio decision because something feels urgent.

A disciplined tactical process is different. It defines in advance what will be measured. It sets rules for how the data will be interpreted. It determines how exposure may be adjusted. And it accepts that some decisions will be wrong, which is why risk management, diversification, and position sizing matter.

Changing according to rules is not a lack of discipline—it is discipline.

The undisciplined approach is pretending that the same allocation is equally appropriate in every environment, for every client, at every point in the market cycle.

Markets are not static. Clients are not static. Risk is not static.

Why should the portfolio be?

Where buy and hold still fits

None of this means buy and hold has no place.

A passive index allocation can provide broad market exposure at low cost. It can be useful as a core holding. It can help investors participate in long-term equity growth. For the right client, in the right role, it can make sense.

But advisers should be careful not to confuse a useful component with a complete solution.

An S&P 500 index fund does not know a client’s retirement date. It does not know how much risk the client said they could tolerate. It does not know whether the client is taking withdrawals. It does not know whether market breadth is narrow, bonds are under pressure, or cash equivalents have become more attractive.

It simply owns the index.

That is not a criticism. That is its design.

But if the client needs more than exposure—if the client needs a process for adapting to risk and opportunity—then something else has to be added.

That is where strategies like Evolution Plus can play an important role.

The real question

For advisers and their clients, the practical question is not, “Should I abandon buy and hold?”

The better question is, “Does this portfolio have a way to respond?”

Responding does not mean predicting every correction. It does not mean avoiding every loss. It does not mean chasing performance.

It means having a process that can adjust when the evidence changes.

A portfolio that never changes may look stable. But if it is built on one assumption and that assumption stops fitting the environment, the stability may be an illusion.

True stability is not standing still.

True stability is having a process that can keep its balance while conditions change.

That is the idea behind Evolution Plus. That is the idea behind FPI’s broader multi-strategy approach. We believe portfolios should be built with more than one assumption, more than one tool, and more than one way to respond.

Buy and hold asks investors to endure change.

Dynamic risk management asks portfolios to adapt to it.

In my opinion, that is the difference between being married to the first assumption versus being committed to the client’s goal.

---

Performance. The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of any dividend or capital gains distributions. To obtain performance data current to the most recent month-end, please call toll-free 888.572.8868 or access www.quantifiedfunds.com. Total annual fund operating expense ratio: 1.83%.

Risk. Investing in mutual funds involves risk, including loss of principal. The Fund may use leverage, which can magnify both gains and losses. Risks specific to the Quantified Evolution Plus Fund include: Subadviser’s Investment Strategy Risk, Active and Frequent Trading Risk, Aggressive Investment Techniques Risk, Commodity Risks, Counterparty Risk, Credit Risk, Depositary Receipt Risk, Derivatives Risk, Equity Securities Risk, Foreign Securities Risk, Gold Risk, Interest Rate Risk, Leverage Risk, Lower-Quality Debt Securities Risk, Non-Diversification Risk, Risks of Investing in Other Investment Companies (ETFs and mutual funds), and Small- and Mid-Capitalization Companies Risk. There is no guarantee the Fund will achieve its investment objective. No investment product or strategy is guaranteed to generate a profit or prevent a loss.

Prospectus. An investor should carefully consider the investment objectives, risks, charges, and expenses of the Quantified Funds before investing. This and other information can be found in the Funds’ prospectus and summary prospectus, which can be obtained by calling 1-855-650-7453. The prospectus should be read carefully prior to investing in the Quantified Funds.

Relationships. Flexible Plan Investments, Ltd., serves as subadviser to the Quantified Funds, distributed by Ceros Financial Services, Inc. (Member FINRA/SIPC). Flexible Plan Investments, Ltd., and Ceros are not affiliated. Advisors Preferred, LLC, serves as investment adviser to the Quantified Funds. Advisors Preferred is a commonly held affiliate of Ceros.

Opinions. The views expressed are those of the author as of the date of publication and are subject to change. This material is for informational purposes only and is not a recommendation to buy or sell any security or to adopt any investment strategy. It does not consider the investment objectives, financial situation, or needs of any individual investor.