Dynamic Risk Management

Why we manage for risk and not just returns

We believe risk management is the most important ingredient for investment success

Dynamic risk management

Today’s market climate is defined by unpredictability. A wealth-management strategy that manages risk first—focusing on preserving wealth and minimizing losses—is the key to investor success. Learn how adding dynamic risk management can help prepare clients for what lies ahead.

Our approach to dynamic risk management

How do you know if your investment portfolio is using dynamic risk management? At Flexible Plan Investments (FPI), it starts with the investment strategies we use to build investment portfolios. 

Each FPI strategy is designed to take advantage of specific observable and measurable opportunities—and/or avoid specific observable and measurable risks—in the market. When the market enters an environment where those target opportunities and risks are present, the strategy is designed to perform as its profile suggests it will. 

However, the market does change—as do the specific opportunities and risks within it. 

Because of this, we build portfolios composed of multiple strategies—each one designed to take advantage of different market opportunities and avoid different market risks. This gives the overall portfolio the tools it needs to navigate the market as it changes over time.

Building an investment strategy with dynamic risk management

A strategy is created by applying an investment methodology (a rules-based, tested computer model that provides consistent, objective, and disciplined buy and sell decisions based on current market environments) to an investment universe (e.g., stocks, bonds, ETFs). Each strategy:

...
  • Seeks favorable risk-adjusted returns and less volatility in any market environment.
  • Uses sophisticated algorithms and models to capture gains and help defend against losses in a wide variety of sectors, asset classes, and geographies.
  • Focuses on controlling portfolio risk based on a client’s risk tolerance.
  • Has the flexibility to alter course based on market conditions.