Current market environment performance of dynamic, risk-managed investment solutions.
By David Wismer
Roman statesman, scholar, and philosopher Marcus Tullius Cicero is credited with the expression, “Gratitude is not only the greatest of virtues but the parent of all the others.”
With Thanksgiving fast approaching, Flexible Plan Investments (FPI) extends its heartfelt thanks to everyone who has worked with us and contributed to our success this year: financial advisers and their investor clients, our direct investor clients, our third-party partners across the investment industry and beyond, and members and businesses of our local community.
We also deeply appreciate the hard work of our FPI employees, whose dedication enables us to serve our clients so effectively.
This year has been a productive one for FPI. The firm has continued to focus on providing high-quality products and services while seeking new opportunities and ways to improve our current portfolio of investment-management strategies and related services.
As you may have read about recently in our Weekly Update, one such important new FPI initiative is the launch of the Quantified Eckhardt Managed Futures Strategy Fund (QETCX), the 14th fund in FPI’s lineup of sub-advised Quantified Funds. The article highlights the many benefits managed futures can offer to advisers and their clients, putting to work sophisticated strategies typically reserved for hedge fund investors.
This type of innovative approach would not be possible without the support of those mentioned above. Thank you!
Thanksgiving reminds us each year of the importance of self-reflection and expressing gratitude for our positive experiences and the impact others have made in our lives. As country icon Willie Nelson is cited as saying, “When I started counting my blessings, my whole life turned around.”
Managing investments in a news-rich environment
The 2024 market environment has been largely positive but not without its fair share of diverse challenges, highlighted by a steady stream of headlines that produced a variety of reactions and opinions in the financial press and investment community.
The year started with the unfortunate backdrop of the continuing Ukraine-Russia conflict and the still-fresh fallout from the attacks on Israel.
In the first quarter, economists and strategists debated the future path of inflation and the Fed’s interest-rate policy, while various camps were divided on whether the U.S. economy would experience a hard, soft, or “no” landing. Many questions were answered by mid-September, with the Fed starting its rate-cutting cycle, inflation improving, and the economy performing better than many expected.
Throughout the year, Americans faced several tragic and devastating natural disasters. It has been gratifying to read about the many heroic acts of first responders and members of the affected communities—as well as the outpouring of charitable support from people and organizations.
The domestic political environment, culminating in the November 5 election, has been intense and, for many, divisive. Hopefully, that type of atmosphere will improve as the new administration assumes office in January.
On the investment front, artificial intelligence (AI) developments and stories, both meaningful and trivial, have proliferated, stoking what has been called the “Generative AI revolution.” In addition, the “Magnificent Seven” mega-tech companies have dominated recent corporate earnings seasons. Mega-cap growth stocks continue to lead the broader market and have contributed disproportionately to gains in the S&P 500 and NASDAQ Composite—helping achieve what now appears to be two consecutive years of S&P 500 gains of over 20%.
Bespoke Investment Group issues a visual review of major economic, financial, and other market-moving news headlines in the context of the S&P 500’s performance at the end of each month. October’s recap was a striking example of what investors contended with over the last seven months of 2024. (And we already know that November has produced outsized headlines both domestically and abroad.)
FPI’s approach
At FPI, we remain committed to our philosophy of quantified, active investment management and multi-strategy diversification, which you can read more about here. Our focus is not on predicting market reactions to headlines but on responding objectively and systematically to market data. As we have stated previously in our Weekly Update,
“There will always be a bullish, bearish, and neutral way to interpret the news that the financial markets are faced with every day. Which one is correct? Who can say?
“Those opinions have no bearing on how we make investment decisions. Instead, we are focused on the data, rule sets, and results that help guide us to being invested on the correct side (long, inverse, cash) of all markets. … FPI views the news of the day, week, or month objectively and agnostically. We are not concerned with ‘being right in our view.’ We are concerned with being on the right side of the trend of each of the markets (stock, bond, alternative) in which we participate.”
The bottom line? I think it is reassuring for financial advisers and their investor clients that whether markets are facing a “news-rich” and volatile scenario—or a relatively benign period—FPI offers a holistic portfolio approach and strategies that can be responsive to virtually any market environment.
Jerry Wagner, FPI’s founder and president, shares these Thanksgiving reflections:
“It’s hard to block out the 24/7 news; it seems that wherever we are, a radio or TV drones on in the background telling us how many problems we have and the difficulties to come. In a time of less-intrusive media than ours, an earlier generation realized that we all needed a day where, instead of focusing on our worries, we needed to be able to focus on that for which we should be grateful.
“Thanksgiving is the day set aside for this in our country. My staff and I join in taking this time to thank each of you for your trust, your patronage, and your friendship. We are thankful that we are able to be a small part of the American story and your lives. Happy Thanksgiving everyone. May you enjoy God’s blessings in the year ahead!”