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.
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.
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: