Current market environment performance of dynamic, risk-managed investment solutions.
By Jerry Wagner
Paging through the business section of the Detroit Free Press several years ago, I came across an article by business columnist Jack Linkner, a tech entrepreneur and best-selling author. He wrote about how the famous Ringling Brothers circus failed because it didn't adapt to shifting consumer preferences, in contrast to the booming success of Cirque du Soleil, started by two former street performers.
Linkner remarked, “In our current climate of unprecedented change, we can no longer run yesterday’s playbook and expect to win. Animal rights activists didn’t put Ringling Brothers out of business, complacency did.”
Preparing for change
The Linkner article resonated with me deeply, especially when I think about how it relates to our investment philosophy at Flexible Plan Investments (FPI). Since our inception in 1981, we have been committed to active management that adapts to meet the challenges of evolving market conditions rather than simply buying and holding.
Market environments change, and so must the investment strategies that thrive in them. Although most people understand that that can be the case with, say, a quantitative bond strategy, few seem to realize that “buy and hold” is also a strategy subject to the same idiom—as is index investing.
Meeting investor needs with diverse investment strategies
Financial advisers often ask me two questions: 1. Why do we have so many strategies? 2. Why do we make changes to our strategies?
The answer to both is simple: to keep up with changing times. Investor needs and preferences change. While market timing of stock indexes was what FPI was founded on, investors eventually sought the same type of responsive strategies for bonds, gold, and other asset classes. And when momentum-based strategies were hampered by sideways markets, we added strategies that made use of other approaches, such as asset rotation, price patterns, and mean reversion.
Managing change requires constant review and adjustment
Markets evolve. Investors may catch on to a market aberration that a strategy is capitalizing on, undermining it, at least in the short term. New data may become available that enhances a strategy’s performance, or investors might begin responding differently to stimuli. Regardless of the change, investment strategists must continually review performance and adjust investment strategy rules accordingly.
Financial advisers and investors must also adapt. FPI offers numerous investment strategies across several categories, enabling portfolios to be constructed for current market conditions and, through multi-strategy diversification, for future markets with unknown conditions.
You don’t need to seek out investment strategies elsewhere. We make it easy to switch strategies as conditions warrant, offering a wide array of choices, whether you prefer mutual funds or ETFs.
If you started with a single strategy that met a particular need, now might be a good time to explore a suitable profile from one of our core strategies. If you would like your portfolio to express your individual preferences, be they for faith-based or socially responsible investing, we have risk-managed solutions. If you want us to do the strategy selection for you, consider one of our turnkey options.
Change is constant, but we’re here to help you navigate it
At FPI, we understand that the key to success is adaptability. By offering a diverse range of strategies and continuously refining our approach, we assist investors in navigating the ever-changing market landscape. Our commitment to dynamic risk management allows us to anticipate and respond to market shifts, helping investors stay ahead of the curve. If you're looking to build a portfolio that adapts to changing conditions, consider discussing with your financial adviser how FPI can support your goals.