"Our objective is to capture 80% of market gains and avoid 80% of market losses over a complete market cycle. During the last complete cycle (1990-98), this strategy beat buy-and-hold by almost 18%, while taking market risk only 58% of the time." John Sosnowy, 1999

How does it work?
Classic is a "100% in-100% out" approach to the stock market. Developed in the late 1960s, and first used in 1970, the model encompasses fundamental (approx. 10% weighting), monetary (approx. 35% weighting) and technical indicators, both sentiment and momentum (55% weighting), in a purely quantitative, fact-based methodology with disciplined implementation procedures.

The model has been tested all the way back to 1927. It is a dynamic model in the sense that we are continually evaluating, testing and refining the model as warranted. Our goal is to stay "ahead of the curve" through rigorous in-sample/out-of-sample testing procedures designed to avoid curve-fitting and to keep the model robust.

Reporting

•  Quarterly Performance Report (mailed on January 31, April 30, July 31 and October 31).
  
•  Annual capital gains summary on taxable accounts.
  
•  A newsletter each quarter.
  
•  Weekly Market Hotline by WEB or email (giving the status of the indicators).

What investments are used?
Although, on occasion, Flexible Plan will substitute a bond fund for all or a portion of a money market fund position, we normally are either 100% in a stock fund or a money market fund investment.

When is Classic appropriate?
While you can use Flexible Plan Research Reports, alphas, betas, and standard deviations to justify using this strategy, simply ask yourself this one question:

Q: If you were stopped in your car across a railroad track, and you saw a train coming, what would you do?

A: Get off of the track! (Of course!)

Well, we look at the stock market every week. If we see a train coming, we get off the track (out of the market). That's what tactical asset allocation is all about.

Where is Classic available?
Because Classic only moves two to three roundtrips per year, it is available at most mutual funds and variable annuities. In addition, it can be utilized in Flexible Plan's popular Strategic Solutions and Market SAVI services.

Who is the portfolio manager for your Classic accounts?
John Sosnowy, President of our SIMCO subsidiary and Vice President and Portfolio Manager of Flexible Plan Investments.

What is Mr. Sosnowy's background and experience?
John Sosnowy is a market pioneer and an industry leader with over 30 years of investment experience. He was one of the originators of active money management for mutual fund accounts, which has become the fastest growing sector in the financial service business.

Mr. Sosnowy is the founder of the National Association of Active Investment Managers (NAAIM) (formerly SAAFTI), the national trade association for advisors engaged in the active management of client assets utilizing dynamic asset allocation strategies. He is also the author of "Lasting Wealth Is A Matter Of Timing," considered by many to be the definitive book in its field. His investment philosophy has been featured in Forbes, Newsweek, Financial Planning, Investment Advisor, and many other publications. Mr. Sosnowy has also been a guest on Dan Rather's CBS Evening News.

To contact us to obtain more information about Classic, click here.

Performance Expectations: Active investment management is a conservative strategy seeking wealth preservation, as well as capital accumulation. It is not a get rich quick approach that can be evaluated over a short term. It may not meet the performance of the applicable benchmark during periods when markets either experience rapid appreciation or exhibit no clear trend, but it tends to capture the returns when the markets are trending, and outperform them while prices are declining. Therefore, it requires a complete Bull and Bear market cycle (on average 5-7 years) to fairly judge its results.

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS

Inherent in any investment is the potential for loss as well as the potential for gain. A list of all recommendations made within the immediately preceding year is available upon written request.