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

3rd Quarter | 2024

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Current market environment performance of dynamic, risk-managed investment solutions.

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.

Nowhere to run

A song by the Motown group Martha and the Vandellas kept running through my mind during 2022. The 1965 creation of the Holland–Dozier–Holland Hitsville production team, “Nowhere to Run” rose to number eight on Billboard’s Hot 100 chart and number five on Billboard’s Hot Rhythm & Blues Singles chart. It has been used in countless movies since its release. The original music video of the song was shot to the throbbing beat of the Funk Brothers at the Ford Mustang plant here in Detroit.

You’re right

The market is funny. No matter what your perspective is when you look at it, you can almost always find something to support your opinion. Searching for or favoring data that aligns with your existing beliefs is called “confirmation bias.” It can be found in all disciplines, but the way it shows up in investing is particularly interesting.

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. The roads have markings, safety engineering, and guard rails on the riskiest stretches. Just in case …

What’s your plan B?

Years ago, a harrowing news story that ultimately ended in triumph reminded me of the benefits of having a plan B. It all began on August 5, 2010, with the collapse of the main ramp into a small gold and copper mine located in the remote Atacama region of Northern Chile. More than 30 miners were missing. Then, two days later, as hundreds of their fellow miners worked to find some sign of life, a new cave-in brought the rescue efforts to a halt.

As I read through various 2022 recaps from the general media and financial press, one theme becomes abundantly clear—and hardly surprising: 2022 was extremely challenging on many fronts. In a recent article, consulting firm McKinsey & Company put it succinctly: “The past year has been anything but ordinary.”

“Nothing is certain except death and taxes.” How often that phrase has been quoted since Ben Franklin penned it in a letter to his friend, the French scientist Jean-Baptiste Leroy, in the midst of the French Revolution.

Norm, a character on the 1980s sitcom “Cheers,” is a down-on-his-luck type of guy and a regular at the titular Boston pub. He tries to get ahead but never quite makes any progress. So every day he comes back to the place “where everybody knows your name.”

The gifting season

What a great idea Thanksgiving Day was. Our ancestors set aside a day designed simply to give thanks for all the bounties of this life. This year, as my brother and sister would say, “We had so much fun!” Family came together; the new baby, Natalie, was naturally the focus; a feast was prepared and enjoyed by all; and, of course, the Detroit Lions lost.

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.

What the FTX?

Last week was a wild ride in cryptocurrency land. On November 4, the largest and most well-known proxy for the cryptocurrency space, bitcoin, traded around $21,130 USD per bitcoin. By Monday morning, it was trading below $16,000, a drop of nearly 25%.

With an estimated 10,000 baby boomers reaching the retirement age of 65 each day over the next eight years, it is little wonder that both the general media and financial press are saturated with retirement-focused content. And there are many good reasons for that.

Investors often ask me, “What is active management?” Many confuse the phrase “active management” with the simple act of running a mutual fund populated with stock picks within the strict guidelines of a prospectus, as opposed to running an index fund, where the manager simply buys and holds the shares making up a particular stock or bond index.

It’s October, and Halloween is just around the corner. But at Flexible Plan Investments (FPI), we’re always searching for the monsters in your investment portfolio.

Decisions. We have to make them every day on a whole range of matters. While most decisions seem to revolve around choosing between alternatives, another category of decisions tends to be more critical in the scheme of things.

I am sure anyone interested in major league baseball has followed—either fanatically closely (like New York Yankees supporters) or just as casual fans of the game—the remarkable 2022 season of the Yankees’ outfielder Aaron Judge.

I was reading some history recently that focused on the Second World War. It contradicted a long-held belief. I’d always heard that the Maginot Line was a colossal failure.

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.

Throughout my life, I have been a fan of science fiction. To pick up a book that can take me on a journey through space or time has never failed to remove me from the everyday and broaden my horizons.

“Nothing is certain except death and taxes.” How often that phrase has been quoted since Ben Franklin penned it in a letter to his friend, the French scientist Jean-Baptiste Leroy, in the midst of the French Revolution.

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.

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