News

With everything going on in our personal and professional lives—and the constant flow of news—sports fandom can offer a welcome respite.

We are in a time of year when sports offer a rich smorgasbord of options—something for everyone. The Final Four of March Madness is just days away. A new MLB season has begun. Top pro basketball and hockey teams are preparing for playoffs. The Masters tournament will kick off golf’s majors season. The NFL draft arrives in late April. And let’s not forget high school and college spring sports seasons, as well as this summer’s highly anticipated World Cup, which will be hosted in North America. (Apologies if I haven’t mentioned your favorite sport!)

I recently listened to an interview with Jerry Seinfeld, a huge New York Mets fan, who said sports are essentially a “closed system,” often immune to what is going on in the outside world. But he also noted that sports fandom can “reveal the undercurrents of one’s life,” including whether people tend to approach things positively or negatively.

Sports can provide valuable insights for any endeavor that requires focus and discipline. That’s especially true for those who have actively participated in sports at any level, but I believe it is equally true for fans. The same skills that help athletes and teams succeed—resilience, strategic thinking, and the ability to adjust to changing conditions—are also critical in navigating the financial markets.

What sports can teach us

You can find numerous articles from noted psychologists that outline the many attributes sports can help us develop, including mental toughness, accountability, leadership, socialization, and empathy.

I especially like psychologist Carol Dweck’s concept of a “growth mindset,” which suggests that success and failure are not the end in themselves—they are both part of the learning curve.

A blog post from the Association for Applied Sports Psychology explains, “Growth mindset is a mental schema that has the power to influence our thoughts, decisions, and behaviors. The positive implications are many. … A growth mindset allows athletes to ‘embrace learning, [as well as] welcome challenges, mistakes, and feedback.’”

Says another blogger, “Here’s something I remind myself often: losing doesn’t mean you’re a failure. It means you’re trying. The greats have all stumbled—Michael Jordan, Serena Williams, you name it. The trick is learning from the fall instead of fearing it. …

“You don’t have to be an athlete to feel it. Maybe you played a little in school, or maybe you’ve just cheered from the bleachers. Either way, sports leave an imprint. They shape how we face challenges, how we work with others, and how we grow.”

Using the language of sports to frame investment perspectives

Many financial advisers have told Proactive Advisor Magazine they use sports analogies to help explain important investment concepts to their clients.

These often come from football, baseball, and basketball, but some advisers draw inspiration from individual sports—even bowling! A common theme, especially from football, is how “defense is often more important than offense.”

One Texas-based adviser says he tells clients that investing “is very much like a football game—and you know we are real football fans here in Texas. You have to go through four quarters to find out who wins the game. Anybody—even the best teams—can be behind at halftime, or after the first or third quarter, but that’s not the point. The point is that the full investment cycle is a bull and a bear market and everything in between. Only after you get through those two [parts of the cycle] can you determine how effective you were in your investment process.”

I also like the perspective from a financial adviser who had a stellar baseball career, making it to the professional minor leagues:

“Athletics taught me a lot of great life lessons: the importance of preparation, how you must work consistently toward your goals over time, and why it is necessary to set long-term objectives that will move you toward achieving what is most important to you. …

“One analogy I use relates to how I form a working relationship with clients and, in turn, with my trusted outside resources. I tell the client they are like the owner of a professional sports team. It is their hard-earned money and, ultimately, they have the authority and the responsibility to make the decisions.

“But they have hired me as their general manager and head coach. It is my job to do everything in my power to put together a sound plan of action and to assemble the highest-quality coordinators, assistant coaches, and players to help their team achieve consistent success. For example, I conduct an extensive evaluation and selection process of third-party money managers on behalf of my clients. I will recommend the use of those that fit the investment needs for a specific client. I think this simple analogy of assembling a great team makes a lot of sense to people.”

Having the right “team” for an investment portfolio

The concept of building a strong, balanced team also applies to sound portfolio construction.

Many advisers have talked about using a combination of actively managed strategies that are meant to work together (with different performance characteristics) as a cohesive portfolio over full market cycles.

As one adviser puts it, “A cornerstone of my active management approach is offering a very wide potential combination of diversified strategies. In line with this overall risk-managed active approach, I will generally use several different noncorrelated strategies, in several different asset classes. While not every strategy ‘will fire on all cylinders’ at the same time, that is exactly the point.”

Jerry Wagner, president of Flexible Plan Investments (FPI), has often written about this same aspect of diversification. He explains, “If every strategy in a portfolio is going up or down at the same time, there is a high probability that the portfolio is not properly diversified.”

He expanded on FPI’s philosophy in an interview with The Wealth Advisor:

“‘My theory has always been that there are no silver bullets, some single strategy that works for everybody all the time,’ Wagner says. ‘Instead, you have to have multiple strategies in a portfolio. You have to have adaptive strategies.’

“That adaptability is hard-coded into how the firm builds its models. ‘We created all of our strategies so that they can evolve over time and take in new information, readjust themselves and go forward again,’ Wagner notes.

***

For both sports fans and investors, it’s easy to get caught up in the emotions of day-to-day action. But in the end, it’s a long season for both. What matters most is having a trusted and capable team in place to help reach the ultimate goal.

When the thermostat can’t keep up

Tue, 24 Mar 2026 03:36:00 GMT

Seventy degrees on Thursday. In the 20s by Friday morning. This time of year in Michigan (and much of the country), the thermostat gets a workout. What feels right at the start of the week can feel wrong by the end—and markets haven’t been much different.

Over a single weekend, markets reacted sharply to developments in the Middle East. Escalating rhetoric pushed prices lower. A subsequent shift in tone—communicated through social media—helped drive a sharp rebound in a matter of minutes. These moves occurred before normal market hours, reflecting how quickly conditions can change.

Despite this volatility, broad equity indexes remain near recent highs.

That combination—visible instability alongside relatively stable index levels—can be difficult to interpret.

Anyone watching markets today understands that conditions are not calm. Advisers and clients alike are aware of the uncertainty. In many cases, the instinct is not to hold steady but to reduce exposure—to move toward the exits until conditions appear clearer.

That response is understandable.

It is also a reminder that the real challenge is not just understanding what markets are doing but knowing how to respond when conditions change quickly and without a clear pattern.

The limits of static settings

Managing your home’s temperature is more straightforward when changes are gradual. Set it to a certain level—higher in winter, lower in summer—and adjust periodically.

That approach becomes more frustrating when conditions shift rapidly. When that happens, any setting quickly becomes obsolete—mirroring how static strategies can lag in fast-moving markets.

The issue is not the thermostat itself. It is the assumption that conditions will remain stable long enough for a fixed setting to remain appropriate.

Markets are complex systems

Financial markets operate similarly. They are often described using models that assume stability—where relationships between assets are known, risks can be measured, and outcomes can be estimated with some degree of precision.

But markets are not mechanical systems. They are complex systems, which means not all outcomes are known in advance, relationships can change over time, and measures that appear precise may rest on unstable assumptions.

This distinction matters.

When forecasts are presented with increasing precision during periods of heightened uncertainty, they can create the impression of clarity where little actually exists.

The illusion of stability

One challenge in the current environment is that price levels alone do not fully reflect underlying conditions. Markets can remain near highs even as uncertainty grows.

Just as a single temperature reading does not capture how quickly weather conditions are changing, index levels do not always reflect the variability beneath the market’s surface.

Conditions feel unstable, yet traditional reference points appear steady. It is within that gap that decisions become more difficult.

No single setting works forever

Modern thermostats tackle this instability differently. Many systems now adjust output continuously, responding to changes in temperature, time of day, and usage patterns. They do not eliminate variability—they respond to it.

Portfolio management can work the same way—and it’s the approach Flexible Plan Investments (FPI) was built on. Rather than providing financial advice, FPI focuses on asset management—managing portfolios as conditions evolve, instead of assuming a single set of conditions will continue.

Risk is always with us. What changes is how it shows up—and how we respond to it.

That includes ongoing monitoring of portfolio behavior, adjustments based on observed market conditions, and diversification across strategies—not just asset classes.

The objective is not to predict each change but to respond as changes occur.

Tools for changing conditions

In practice, FPI supports this approach with tools designed to provide ongoing visibility.

OnTarget Investing shows where a portfolio stands relative to individual investment goals. It helps clarify progress and positioning as market conditions shift.

Our Crash Test Analyzer allows advisers to simulate how selected portfolio strategies may react in different market scenarios, highlighting potential risks and outcomes in advance.

Our Multi-Strategy Portfolios are true turnkey solutions that monitor the scores of FPI’s dynamic, risk-managed strategies and reallocates monthly among them, aiming to invest in what is working best in the changing market environment.

My Business Analyzer is a dashboard for advisers that helps monitor ongoing business metrics, track client engagement, and streamline oversight and communication within their practice.

Our weekly Market Update and strategy performance updates provide a regular view of how portfolios are being managed as markets evolve. Even when fund holdings remain the same, the active management within those funds is reflected in the weekly strategy updates and in the OnTarget Investing portfolio summaries.

Note that at present, in this uncertain market environment, most current strategy holdings reflect that defensive adjustments have already been made.

These tools and updates are not intended to forecast specific outcomes. They are designed to support a process that remains engaged as conditions change.

What this means for advisers

Volatile markets change the nature of an adviser’s job. The work is no longer primarily about constructing the right portfolio and holding it. It is about staying engaged—monitoring how portfolios are behaving, making adjustments as conditions shift, and being prepared to explain those decisions clearly.

Clients are paying attention. They are aware of the risks, and they are asking questions—not only about long-term plans but about what is happening right now. The adviser who can answer those questions with specificity, grounded in a process rather than a guess, is in a very different position from one who can only offer reassurance.

That is where the choice of asset manager matters. Partnering with a manager whose strategies are built to adapt—rather than simply hold—and who provides tools that illustrate that adaptation as it occurs gives the adviser a clear answer to the question clients are really asking: “What are you doing about this?”

What this means for clients

For clients, this environment can feel disorienting. Markets seem unsettled, yet index levels don’t always align with instinct. The temptation is to act—to reduce exposure, to wait for clarity, to do something.

Clients can control many things: choosing an adviser they trust, asking informed questions, and resisting the urge to react to short-term noise that can undermine long-term objectives. What they cannot control is the market itself—its timing, direction, or pace of change.

A dynamic, actively managed approach can help bridge that gap by responding to changing conditions, so clients don’t have to predict the future. Instead, they can remain invested in a process designed to anticipate and adapt for them.

That difference—adaptability versus passivity—is what matters most in this market. Investors and advisers working with FPI have chosen an adaptive approach.

It’s not the setting—it’s the adjustment

When temperatures fluctuate as much as they have across much of the U.S. recently, the solution is not to abandon the thermostat. It is to recognize that no single setting will remain appropriate forever. The system must adjust.

Comfort comes from how well it adjusts when the temperature is always changing.

Navigate market chaos with an adaptive approach

Tue, 17 Mar 2026 03:11:00 GMT

Markets are always changing. Investment strategies that work well in one environment can struggle in another as conditions evolve. In many ways, investing follows the same principle scientists describe as entropy—the natural tendency for systems to drift from order toward disorder over time.

Without ongoing adjustment, even well-designed systems can gradually fall out of balance. Investment portfolios are no exception. Market volatility, economic change, and shifting global dynamics can turn yesterday’s well-balanced allocation into today’s mismatch. That’s why successful investing often requires an approach that can adapt to changing conditions.

Managing risk in turbulent times

Consider how dramatically our world has changed in recent years. Geopolitical tensions, trade disputes, rapid technological advances, and shifting economic policies have all left their mark on the financial landscape.

Technological innovation continues to accelerate the pace of change, creating new industries while rendering others obsolete almost overnight. At the same time, geopolitical developments—from elections to international conflicts—can send shockwaves through global markets in an instant.

These forces highlight an important reality: Financial markets are constantly in motion. Conditions can shift quickly, and strategies that once worked well may struggle as the environment changes, and a static investment strategy can leave investors exposed when markets move in unexpected ways.

Dynamic risk management, as used in all of our strategies, is designed to help navigate this uncertainty. It involves strategies that adapt to changing conditions, seeking to participate when markets are favorable and manage risk when they are not. This approach requires a vigilant, proactive stance, adjusting positioning as conditions evolve rather than reacting after the fact.

Adapting to change

At Flexible Plan Investments (FPI), we’ve built our entire approach around this principle of adaptability. Think of it like a modern GPS in your car. Unlike old paper maps that become outdated the moment a town opens a new road, a GPS continuously updates, rerouting you around traffic jams and road closures in real time. Similarly, our investment strategies don’t rely on static models but adapt to the current market environment as conditions change.

This philosophy is reflected in our multi-strategy portfolios, which combine complementary strategies designed to navigate different market conditions. Each strategy contributes its strengths, working together to navigate various market conditions.

For our adviser partners, we also provide a suite of tools designed to help craft customized proposals and manage client portfolios. Our OnTarget Investing process helps advisers set realistic expectations for investors—something that is critically important in the world of finance.

Multi-strategy portfolios built for changing markets

Our turnkey, self-adjusting, multi-strategy portfolios are a key way we help investors navigate changing markets. Unlike traditional set-it-and-forget-it portfolios, they are designed to adjust as market conditions evolve.

We recognize that every investor is different, with unique goals, risk tolerances, and financial situations. To address that, we’ve developed five QFC Multi-Strategy Portfolios. Each combines our QFC Multi-Strategy Core portfolios with select QFC Multi-Strategy Explore offerings and strategies in a structure designed to align with each client’s suitability-based profile.

Beyond the initial setup, these portfolios are designed to continue adjusting as markets change. They incorporate new market data and shift strategy allocations as needed. This ongoing process helps ensure that each portfolio remains aligned with the client’s suitability profile and the realities of the current market environment.

Continuous renewal

One way FPI addresses the gradual “wear and tear” of entropy on investment strategies is through our rigorous renewal process. Using a method called walk-forward optimization, we regularly evaluate strategies using the most recent market data and update them when necessary.

This process allows strategies to evolve as conditions change. By continually testing and refining them with new information, we aim to keep our portfolios aligned with the markets they are designed to navigate.

The goal of this cycle of renewal is simple: to ensure that the strategies guiding client portfolios remain relevant, disciplined, and prepared for whatever market conditions may come next.

The FPI advantage

Our adaptability extends beyond our strategies to the structure of our offerings. As a turnkey asset management program (TAMP), we provide an all-inclusive ecosystem for investment management.

We designed and subadvise 14 dynamically risk-managed mutual funds and a variable annuity subaccount, and we offer more than 50 low-cost separately managed accounts (SMAs) using mutual funds. Each is calculated to tackle specific market challenges or capitalize on particular opportunities.

In addition, we provide more than 30 ETF SMAs, offering exposure to various market sectors and investment styles with the flexibility and cost-effectiveness of ETFs. We even provide subaccount SMAs to select variable annuities and variable universal life insurance products.

For investors who want their portfolios to reflect their values, we offer direct investing options for principled investing, as well as a donor-advised fund for charitable giving. For those who want to manage and trade on their own, our model portfolios offer professionally designed investment strategies that are accessible throughout the trading day.

All of these offerings are available within our TAMP environment, making it easier for advisers to implement these diverse strategies for their clients or use our turnkey, self-adjusting, multi-strategy offerings.

How financial advisers help clients navigate change

For our adviser partners, embracing this philosophy of change is equally important. In today’s rapidly evolving financial landscape, investors are looking for more than product salespeople—they want trusted advisers who can guide them through complex and changing markets.

FPI provides a range of tools to help advisers build and manage portfolios tailored to each client’s needs. Using our My Business Analyzer tool, advisers can monitor their entire book of business with us and access tools such as the strategy change process, Illustration Generator, Portfolio Compare tool, Proposal Generator, and Crash Test Report. They can also review diversification, durability, and anti-fragile testing for each client account and use our OnTarget Investing process to help communicate the benefits of our approach.

Setting realistic expectations is a critical part of this process. While adaptive strategies can provide important benefits, they’re not a crystal ball. Markets will still experience ups and downs, but the goal is to help make the investment journey more manageable and aligned with each investor’s objectives.

Another key role for advisers is helping clients understand why adaptability matters in investing. Markets evolve, and strategies must evolve with them. Advisers who help clients understand this reality can better guide them through changing conditions.

Preparing for the future of investing

As we look ahead, one thing remains certain: Markets will continue to change. While no one can predict exactly what challenges or opportunities lie ahead, an adaptable approach can help investors prepare for a wide range of outcomes.

FPI remains committed to refining the tools and strategies we use to navigate changing markets. That includes ongoing research into new investment approaches, continual improvements to our optimization processes, and strengthening the service and compliance culture that supports our advisers and their clients.

In an environment where conditions can shift quickly, the ability to adjust portfolios and strategies as new information emerges can make a meaningful difference. Investors who take a flexible, disciplined approach are often better positioned to respond to both opportunities and risks.

Thriving amid change

Successful investing requires recognizing that markets are constantly evolving. Just as entropy gradually pushes systems toward disorder, static investment strategies can lose their effectiveness over time. The solution is continuous renewal and adaptation.

At FPI, this principle shapes everything we do—from our dynamic risk management and multi-strategy portfolios to our ongoing process of reviewing and refining strategies. Our goal is to help investors and advisers navigate markets that rarely stand still.

For advisers, embracing this philosophy provides an opportunity to guide clients through changing market conditions and help them stay focused on long-term goals. For investors, it reinforces an important reality: set-it-and-forget-it approaches may struggle in today’s rapidly shifting financial landscape.

Change isn’t something to fear when investing; instead, we must embrace the opportunities it creates. With the right strategies and mindset, we can turn the challenges of an ever-evolving market into a decisive advantage.

The age of immediacy—and why investing still requires patience

Tue, 10 Mar 2026 15:01:39 GMT

We live in a world that is increasingly intolerant of waiting. That shift affects almost everything in our lives—and it may also be shaping how investors experience markets.

I saw it in my own life recently. I needed batteries and did not have time to run to the store that day. So I checked Amazon and saw they were available for same-day delivery. Done. A few years ago, I probably would have just picked them up while I was out. Now, apparently, even batteries feel too urgent to wait for.

That’s a small example, but it reflects a broader shift. Entertainment is shorter. Delivery is faster. Feedback is almost instant. More of daily life is built to reduce friction, shorten attention spans, and give us things quickly.

It also feeds the brain’s reward-response loop. Deloitte’s 2025 Digital Media Trends report found that Americans spend about six hours a day on media and entertainment, with social platforms competing directly for that time. The Pew Research Center reported that 46% of U.S. teens say they are online almost constantly. That is a useful reminder of how nonstop life has become, especially for the next generation growing up with immediate gratification as a central feature (or bug) of their lives.

This has real behavioral consequences, and not just for markets. A 2024 review of trends in cognitive sciences noted that the mere presence of a phone can diminish attention and increase errors in cognitive tasks. Smartphone use can also intensify boredom rather than relieve it. Maybe we shouldn’t appease young kids with a tablet while out to eat?

In other words, constant stimulation does not necessarily make us calmer. It can make stillness, boredom, and discomfort harder to tolerate.

That matters for investors because investing still requires all three.

Investing runs on a different timeline

Investing requires patience. It requires uncertainty. It requires the ability to endure periods of unease without assuming that something is broken or that action is immediately needed just because results aren’t instantly available.

Long-term returns do not arrive smoothly, and risk is not a flaw in the system. Risk is part of the price of long-term growth.

The problem is that many investors now bring habits shaped by a culture of immediacy into a process that demands the opposite. When investors begin to expect that same responsiveness from markets, even a modest pullback can create emotional tension.

A rough week, a bad month, or a stretch of uncomfortable headlines can feel much more threatening than it really is, even when nothing meaningful has changed about the investor’s long-term goals, time horizon, or financial plan.

The two sides of risk tolerance

This tension shows up clearly in the concept of risk tolerance.

Risk tolerance has two parts: the ability and willingness to take risk.

Ability is more objective. It includes factors such as time horizon, savings, income needs, and overall financial flexibility.

Willingness is more emotional. It reflects how comfortable an investor actually feels when markets are volatile, headlines are unsettling, and portfolios are under pressure.

Research from a 2020 FINRA Investor Education Foundation highlights how these two can diverge. The foundation found that 42% of respondents reported a lower subjective willingness to take risk during market volatility, yet 66% of those respondents had no actual change in their objective risk tolerance. In other words, their ability to take risk did not change, but their willingness did. This research was further confirmed in a 2024 study, which found that younger investors were less willing to take substantial investment risk than previous generations.

That is an important observation, especially after a long period of strong equity returns. The past decade—especially the performance of the S&P 500 Index—may have distorted some investors’ understanding of what risk really feels like. In a strong market, an aggressive portfolio can feel easy to own. In a weaker market, that same portfolio may suddenly feel unbearable.

Why discipline matters during volatility

That is why understanding risk tolerance matters so much. The goal is not to eliminate anxiety entirely. The goal is to size risk in a way that keeps anxiety contained enough for an investor to stay disciplined and remain on track toward long-term goals. A portfolio can look right on paper and still be wrong in practice if it creates enough fear to trigger poor decisions at the worst possible time.

Reacting emotionally can have real costs. Our internal research shows that the market’s worst days and best days often occur close together. Volatility tends to cluster. If an investor is in the market during the bad days, they need to be there during the good ones, too. Missing part of the rebound can do meaningful damage to long-term compounding.

The role of rules-based investment frameworks

This is one reason rules-based and risk-managed investment frameworks, such as those developed at Flexible Plan Investments, can be so valuable.

These frameworks can help reduce the pressure to make emotional, in-the-moment decisions. They allow us to test different hypotheses over market cycles and evaluate what-if scenarios based on experience.

History doesn’t repeat exactly, but it often rhymes. Understanding how markets behaved during past periods of stress can help inform how investors think about future risks. Insights from these kinds of simulations can help investors respond to changing market conditions with process and discipline instead of fear and immediacy.

Patience in an impatient world

The challenge for investors today is not simply understanding markets. It is resisting a broader cultural pull toward instant reaction and the feeling that every situation requires a decision right now.

In a world that increasingly conditions us to relieve discomfort immediately, successful investing still requires something harder: patience, discipline, and perspective.

Navigating a news-rich and volatile environment

Tue, 03 Mar 2026 04:12:00 GMT

In my 13 years of working with Flexible Plan Investments (FPI), there has been no shortage of impactful or market-moving events—each one testing how investors process news and uncertainty.

Everything from contentious election cycles to natural disasters, domestic strife, landmark Supreme Court and national policy decisions, geopolitical tensions, inflation spikes, tariff uncertainty, and—of course—the COVID pandemic.

We react to these events as human beings first, then as concerned investors.

If you are anything like me, much of your attention over the weekend was on the dramatic developments in the Middle East.

As I write this article on Monday morning, the reaction of financial markets—even for oil futures—has been far more muted than I would have expected. (But I have learned the hard way to never try to predict the markets—and they could move dramatically in either direction at any moment.)

I also took some time to look at several pronouncements from major Wall Street firms on what to expect moving forward. There is hardly consensus.

One prominent firm stated, “If this conflict has no meaningful downstream impacts on growth or earnings, any negative stock market response has the potential to be short-lived.”

Another noted, “Even the possibility of [energy] disruption can quickly affect production costs, consumer prices, monetary policy expectations, market sentiment, and the broader outlook for growth and inflation.”

How news affects investor behavior

While I am not an investment expert, as a communications specialist, I find the impact of “news” on investment decision-making and investor behavior to be both meaningful and complex.

News-driven sentiment can help fuel wild market swings, often overshadowing time-tested technical-analysis tools such as pattern and trend recognition, mean reversion, relative strength, moving-average analysis, and supply and demand indicators.

As Investopedia explains, government news releases—and really any major news event—can move markets quickly:

“In the short term, these news releases can cause large price swings as traders and investors buy and sell in response to the information. Increased action around these announcements can create short-term trends, while longer-term trends may develop as investors fully grasp and absorb what the impact of the information means for the markets.”

Two points are worth noting here:

1. Short-term swings have been amplified by technology. Large institutions increasingly use artificial intelligence and sophisticated news-based trading programs to respond instantly to headlines. This leaves little opportunity for the average investor to “compete” in the short term.

2. Longer-term trends are often counterintuitive. Immediate market reactions may not match the true significance of the news. How often have you seen a “Fed announcement day” trend reverse within 48 hours? Likewise, haven’t you often wondered who decides when “bad news is good news” (and vice versa)? Again, an individual self-directed investor is often left in the dust.

A behavioral finance expert and Wall Street veteran addressed many of these issues in the article “How much attention should you really pay to the news?” He noted that both market professionals and individual investors face behavioral pitfalls when interpreting headlines:

“The fact is that our brains already employ a host of shortcuts to deal with all of the information we are currently exposed to. We use availability bias to give more weight to the most recent information. We use representative bias to overweight anecdotal information. And we use herding to overweight what others are doing. All of these are ways in which the brain arbitrarily reduces the available information to something that can easily support a decision. None of these heuristics make the decision more valid or accurate. …

“It is certainly important for financial professionals—if not all investors—to stay well informed on the latest political, business, economic, and market developments. But it is equally important to recognize that short-term, news-driven investment decisions are generally not a wise course of action—especially for individual investors who may lean toward overreaction.”

FPI’s approach

FPI was built around quantified, active investment management and multi-strategy diversification—with a strong focus on mitigating risk. (You can read more about FPI’s philosophy on research and strategy development here.)

FPI is deeply attuned to market-driving news and data, but, as has been pointed out in this space before, “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?”

FPI may have opinions on the economy or political developments, but its investment process remains grounded in data and discipline. As Peter Mauthe, FPI’s now-retired VP of business development, once put it, “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. … Flexible Plan 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

FPI emphasizes the importance of a well-defined investment plan and long-term perspective that aligns with an investor’s personal objectives and risk tolerance. That approach helps investors stay on track through full market cycles and avoid impulsive decisions driven by short-term news.

Whether markets are highly volatile or relatively calm, FPI offers a holistic portfolio approach and risk-managed strategies designed to adapt to a wide range of market environments.

(If you have not already seen this article by FPI’s founder and president Jerry Wagner, it is well worth a look in understanding the company’s 45 years of investment-management evolution, “Keeping the maps updated: Asset management for a changing world.”)

The diversification illusion

Tue, 24 Feb 2026 04:48:00 GMT

Diversification feels simple—until markets test it.

When markets are steady, it’s easy to believe you’ve diversified your portfolio the right way. Stocks for growth. Bonds for stability. Maybe commodities or alternatives for inflation protection. The goal is straightforward: spread risk and smooth the ride.

And most of the time, that works.

But diversification isn’t just about owning different asset classes. It’s about owning asset classes that behave differently when it matters most—usually when markets and the broader economy are under stress.

That’s where the illusion can begin.

When everything starts moving together

Markets rarely feel dangerous when one asset class is falling. They feel dangerous when several start falling at once. That’s when investors say, “I thought I was diversified.” Or worse, they begin questioning their plan and making drastic, emotional changes.

Recently, we’ve seen periods when multiple risk-oriented asset classes moved in the same direction. The S&P 500 and NASDAQ often move together, but we’ve also seen asset classes that investors view as diversifiers—like bonds, gold, silver, and even cryptocurrency—decline alongside equities. Precious metals can act like safe havens at times, but they can also trade more like risk-oriented asset classes.

That doesn’t mean diversification is broken. It means it’s conditional.

Correlation isn’t static

Diversification depends on correlation—the statistical relationship between how two asset classes move relative to each other.

Correlation is measured on a scale from -1 to +1:

• A correlation of +1 means two asset classes move in the same direction.

• A correlation of 0 means there is no consistent relationship.

• A correlation of -1 means they move in opposite directions.

If two asset classes have a low or negative correlation, they can offset each other’s moves. As their correlation approaches +1, they begin moving together, and diversification becomes less effective.

Importantly, correlation isn’t fixed. It changes based on the time frame and the market environment. A one-year lookback may tell a very different story than a 20-year lookback. During stable periods, correlations often appear low, and dispersion increases. During periods of stress, such as 2008 or the onset of the COVID-19 pandemic, cross-asset correlations spike. Portfolios that felt diversified suddenly start moving in lockstep.

The following charts show rolling correlations between three pairs of asset classes: stocks and bonds, stocks and gold, and bonds and gold. The vertical axis represents the correlation coefficient, while the lines show how that relationship has changed over time. We display both a short-term (one-month) and a longer-term (12-month) lookback to illustrate how correlations can shift with the time horizon. This is for illustrative purposes, and the same effect is evident on longer time periods as well.

Equities are represented by the S&P 500. Bonds are represented by 20+ year U.S. Treasury bonds. Gold represents gold. All data is from Flexible Plan Investments’ (FPI’s) internal database.

Short-term correlations (one-month) can swing quickly, sometimes moving from negative to strongly positive in a relatively brief period. Longer-term correlations (12-month) tend to move more gradually, but they also shift meaningfully over time. The relationship between asset classes is not constant. It evolves.

Variety isn’t independence

The illusion of diversification often comes from confusing variety with independence.

Owning a different ticker symbol doesn’t mean you own a different risk driver. A portfolio can hold domestic equities, international stocks, commodities, and digital asset classes, yet still be influenced by many of the same underlying economic or geopolitical forces.

When capital is abundant and confidence is high, asset classes tend to behave differently. When capital tightens, and investors head for the exits, they often head for the same one at the same time. In those moments, what gets sold isn’t always what’s weakest—it’s what’s available and liquid.

That’s why diversification should be evaluated across different market environments, not just long-term averages. Bull markets, sideways markets, inflationary periods, deflationary scares, and bear markets each reveal different relationships between asset classes.

The goal isn’t simply long-term diversification. It’s diversification that holds up when drawdowns occur.

Diversification is a process

True diversification means seeking independent return streams—exposures driven by different economic forces, liquidity characteristics, and structures. It also means recognizing that relationships between asset classes can change as market regimes shift. A defensive position that worked in one environment may behave differently in another.

Diversification isn’t a one-time allocation decision. It’s an ongoing process of understanding how asset classes interact and how those relationships evolve.

That’s where flexibility and adaptability become essential. Monitoring correlation, reassessing exposures, and adjusting when conditions change can help ensure diversification remains intentional—not assumed.

That doesn’t mean volatility disappears. It means risk is acknowledged and managed.

FPI’s approach to dynamic diversification

At FPI, our objective is to build portfolio solutions that recognize how risk behaves and how quickly it can change once stress enters markets and economies. We combine different return streams—such as stocks, bonds, and gold—with active strategies designed to respond to changing conditions.

Even within the same asset class, structure matters. Two equity strategies can behave very differently when quantitative methods are applied differently, creating distinct return streams from what might otherwise appear to be similar exposures.

This is essentially what active, risk-managed momentum strategies seek to achieve. Consider a portfolio of stocks, bonds, and gold. When one asset class is in an established uptrend while another is declining, a rules-based approach can shift exposure toward the stronger asset. If traditional defensive assets such as bonds are also weakening alongside equities, allocations can move toward other areas—such as gold or cash—rather than assuming historical relationships will hold.

By adjusting exposures as trends and correlations evolve, active management seeks to maintain diversification in practice—not just in theory. Strategies such as FPI’s All-Terrain are designed with this dynamic allocation framework in mind.

Diversification isn’t about owning more things. It’s about understanding what truly drives the things you own.

Just in case: Three elements of investment risk management

Wed, 18 Feb 2026 04:35:00 GMT

Risk management is a normal part of daily life—at home, on the road, and in our financial decisions.

At home, the pantry may be stocked with canned food and bottled water. Households with young children often have outlet covers and cabinet latches. A newborn may mean monitors and alarms. An elderly family member may require extra precautions, such as bathroom supports, bed rails, and a medical alert device.

Just in case.

On the road, we buckle our seat belts and rely on safety features like airbags. The roads themselves are designed with markings, safety engineering, and guardrails in the riskiest stretches.

Just in case.

In our financial lives, many of us rely on professionals and proven tools. We use accountants or expert-prepared software to file our taxes. When buying or selling a home, we often turn to a real estate agent—or at least review online tools to get an idea of value.

Just in case.

There are at least three elements common to all of the examples:

A real danger exists.
Multiple, often redundant protections are recommended.
Action needs to be taken in advance to reduce the impact of that danger.

Yet when it comes to investing, these same principles are sometimes overlooked. It often takes increased market volatility to remind investors that uncertainty is always present—and to renew their focus on risk management.

Do your investments qualify for the same kind of “just in case” risk management that applies to much of everyday life? Let’s look at the three elements.

1. Is the risk real?

Since 2008, the S&P 500 has experienced numerous market pullbacks—some relatively modest, others more severe. Many of the smaller declines, often described as “baby bear” markets, were eventually followed by a resumption of the broader uptrend.

There have also been a few “grizzly bear” markets (declines of at least 20%), which can result in losses that take years to recover.

The danger is real.

2. Multiple types of protection

Mitigating investment risk has usually required more than a single approach. Many investors choose to track the domestic stock market through their portfolios, often using passive index funds that mirror broad benchmarks like the S&P 500 or the NASDAQ 100. These indexes contain many stocks, which helps diversify the risk of investing in any one company, where losses can be total. But just as index funds participate fully in market gains, they also participate fully in market declines.

Most investors who work with financial advisers diversify a second way: by investing across different asset classes. Yet major market corrections have shown the limits of this approach. When U.S. stock indexes decline, many asset classes that are expected to provide diversification have also fallen, sometimes by as much or more.

Historically, bonds, gold, and other commodities have offered the most reliable diversification. Still, as markets advance, the temptation to increase equity exposure grows. Investors adjust their answers to suitability profiling questionnaires to take on more risk. They neglect rebalancing and allow stock allocations to rise. They watch indexes climb while diversified portfolios lag, and they ask their advisers to take on more risk.

When the inevitable bear market arrives, they learn what risk really is. They suffer losses closely approaching those of the indexes they were trying to catch just months earlier.

The true “just in case” investor relies on more than index exposure and asset-class diversification alone. They build portfolios using multiple risk-management approaches, including employing dynamic, risk-managed strategies and diversifying not only by asset class but also by investment strategy. Their portfolios include “plan B” investments designed to provide redundant layers of risk protection.

Like insurance, these protections come at a cost. “Just in case” investors understand that you can’t have one foot out the door and do as well as a market index that is always fully invested. They recognize that maintaining diversification and risk controls can mean trailing stocks during strong rallies. And when a market pullback turns out to be temporary, they accept modest losses as the cost of being prepared should a more severe decline occur.

3. Acting before the danger arrives

Finally, “just in case” risk avoidance requires investors to put preventive tools in place before losses occur. Just as no one waits for an auto accident before buying insurance, investors can’t wait to add risk management beyond diversification until after the market loses 20% or more.

Risk is always with us in the financial markets. For that reason, risk-management tools are most effective when they are employed consistently—not added in reaction to losses.

Just in case a 10% “baby bear” turns into a “grizzly bear.”

Just in case a 20% downturn in an index fund turns into a 50% downturn.

Just in case the time required to get back to even takes years.

Dynamic risk management—just in case.

Keeping the maps updated: Asset management for a changing world

Tue, 10 Feb 2026 04:14:00 GMT

February 1, 2026, marked the 45th anniversary of Flexible Plan Investments (FPI).

When Flexible Plan Investments was founded, most investors navigated markets much the way sailors once crossed the oceans—with fixed charts, fixed assumptions, and the expectation that conditions would behave roughly as anticipated.

Those charts were carefully drawn. They reflected the best information available at the time. And for long stretches, they worked.

Until they didn’t.

Storms formed where none were expected. Currents shifted. Previously reliable routes became hazardous. Yet the prevailing response was often to redraw the charts—more detailed, more precise—while still assuming the seas themselves would eventually cooperate.

At FPI, we came to a different conclusion.

The issue was not the map. It was the assumption that the environment would remain stable long enough for any static map to remain accurate.

Today, the analogy is even closer to home.

Modern travelers rely on GPS navigation—digital maps that can be remarkably precise, provided they are continuously updated. When that update stream works, it reflects road closures, construction, accidents, and changing conditions. When it doesn’t, the guidance can become dangerously outdated.

Drivers have followed obsolete GPS instructions into dead ends, onto closed roads, and even directly off a dock. The technology did not fail because maps are useless. It failed because the map was no longer current.

Markets behave much the same way.

Financial plans and long-term portfolio designs remain important reference points. But when they are not paired with dynamic, risk-managed asset management that includes ongoing monitoring and adjustment, they can quietly drift out of alignment with reality.

From the beginning, FPI was built around a simple, practical belief:

Effective asset management requires more than a map; it takes a disciplined process for keeping that map updated as conditions change.

Static plans in a moving world

Much of today’s financial planning and portfolio construction remains rooted in frameworks developed under earlier market assumptions—when relationships among asset classes were considered more stable and diversification more predictable.

Static financial plans. Static allocations. Portfolio designs built on the premise that risk can be optimized at a point in time and revisited periodically, with the expectation that markets will revert toward long-term averages.

These approaches offer structure and clarity. They also reflect the conditions under which they were developed.

The challenge is not that such plans are poorly constructed. It is that they were not designed for a world that moves as quickly, shifts as abruptly, and surprises as often as the one investors experience today.

A different design philosophy

From the beginning, FPI was built around a different idea:

• If markets are dynamic, portfolios must be managed dynamically.

• If risk characteristics change, portfolio management must account for that change.

That belief shaped both the firm’s investment strategies and how it supports advisers and their clients.

Rather than relying solely on static allocations and periodic reviews, FPI focused on building systems and processes designed to monitor conditions and respond as markets evolve—much like a navigation system that updates routes as conditions change, rather than relying on a single printed map.

Instruments, not just instructions

A modern aircraft does not rely exclusively on a flight plan created at takeoff and reviewed once a year. It relies on instruments—monitoring conditions continuously, adjusting course as needed, and responding to turbulence in real time.

That same distinction informs FPI’s approach. FPI does not provide financial planning or investment advice; it provides asset management.

That distinction is important for both advisers and their clients.

FPI’s responsibility is to manage portfolios according to clearly defined disciplines, using systematic processes intended to monitor risk, adjust exposures, and maintain diversification as market conditions change.

This approach emphasizes:

• Ongoing risk monitoring

• Portfolio adjustments based on observable market behavior

• Diversification across strategies and decision frameworks

• Liquidity and transparency across investment structures

The objective is not prediction; it’s structured responsiveness.

From fragile optimization to adaptive design

Many traditional portfolios are optimized based on a specific set of assumptions about market behavior. They may function as expected—until conditions change.

FPI took a different approach.

Rather than focusing on a single optimal outcome, the firm emphasized adaptive design, including:

• Strategies intended to respond to changing conditions rather than rely on forecasts

• Diversification across different decision frameworks and time horizons

• Risk-management processes designed to adapt as conditions evolve

The goal was to build portfolios capable of navigating a wide range of market environments, rather than relying on a single permanent solution.

Liquid alternatives as a core component

This philosophy naturally led to the inclusion of liquid alternatives as a core component of the asset management process—not as niche allocations but as tools for diversification and risk management.

These include actively managed strategies across trend-following, countertrend, managed-futures, tactical fixed-income, principled-investing, and All-Weather frameworks—implemented with an emphasis on liquidity, transparency, and ongoing management.

Today, this same asset management discipline is available across multiple structures:

• Flexible separately managed accounts (SMAs)

• Mutual funds and ETF strategies

• Defined allocation frameworks

• Self-directed brokerage accounts (SDBAs) and retirement platforms

• Model marketplaces across custodians

Different structures. The same underlying process.

What this means for advisers: Supporting differentiation

Advisers operate in an environment where many offerings appear similar, particularly when portfolios are static and reviewed infrequently.

FPI’s asset management approach is intended to support advisers by offering:

• Actively managed portfolios designed to adapt to changing market conditions

• Monitoring and reporting tools—including OnTarget Investing, crash testing, and My Business Analyzer—that support portfolio oversight and communication

• Operational and service support structured to accommodate a wide range of strategies, platforms, and account types

This framework is designed to complement the adviser–client relationship by providing a consistent asset management process that can be explained, monitored, and reviewed over time.

What this means for clients

For clients, the experience is centered on process and transparency.

Rather than relying solely on static assumptions, portfolios are managed with attention to:

• Ongoing changes in market risk

• Diversification across multiple investment approaches, including liquid alternatives

• Liquidity and accessibility across different account types

• Consistent management of assets held for different purposes, including taxable accounts, retirement accounts, and charitable assets

One philosophy, many ways to access it

Over time, FPI has expanded how its asset management process can be accessed, including through:

• Flexible SMAs

• Mutual funds and ETF strategies

• Principled investment choices, including socially responsible and faith-focused approaches

• Donor-advised funds (DAFs)

• SDBAs for 401(k)s and 403(b)s

• Model marketplaces and custodial platforms

The investment structures differ, but the underlying asset management discipline is consistent.

Recent additions to the toolkit

That consistency continues with the firm’s most recent initiatives:

• FlexPlan Strategic extends FPI’s asset management process into the SDBA environment using adviser share–class funds, providing another way for advisers and clients to access systematically managed portfolios within brokerage platforms.

• FlexDirex is an actively managed SMA that provides leveraged and inverse exposure to single-stock ETFs. It was developed to provide an additional, specialized tool within the firm’s broader asset management framework and is managed according to defined risk and process guidelines.

Both reflect the same long-standing design principle: portfolios and processes should be able to adjust as conditions change.

Forty-five years of updating the maps

Markets will continue to evolve.

Assumptions will continue to be tested.

Conditions will continue to change.

FPI was not founded on the belief that a single portfolio design would remain appropriate indefinitely. It was founded on the belief that asset management is an ongoing process, not a one-time decision.

As FPI celebrates its 45th anniversary, the firm remains different by design—not because change is unusual, but because it is expected.

That difference continues to matter for advisers managing their practices and for clients whose assets need to be managed through changing markets.

The “Super Bowl Indicator” (and a more serious look at investment process)

Tue, 03 Feb 2026 03:15:00 GMT

For as long as there has been a stock market, amateur and professional analysts have tried to find correlations between external factors and market performance. Those efforts have ranged from the outright silly and coincidental (see the discussion of the “Super Bowl Indicator” below) to the most complex and serious econometric models.

Some such analytic efforts, especially those related to the calendar and the economy, may have a basis in real facts and cause and effect. Tax-related issues, business and investment reporting periods, commodity seasonality, political election cycles, and sentiment at various times of the year have shown repeatable patterns over the years. Many of these factors can be built into active trading models using sophisticated algorithms and any number of statistical factors.

Designing a model- or algorithm-based strategy is a challenging task that typically involves rigorous analysis of historical data to discover an exploitable market edge. Once identified, a process is built that includes trading rules (the “strategy”) that the manager or computer will apply to take advantage of that edge.

In the Proactive Advisor Magazine article “The case for mechanical trading strategies, “ the author, a quantitative strategy consultant, writes,

“Mechanical strategies have the distinct advantage of making the best use of historical data. They allow for a backtesting process that comes as close as possible to simulating the real-life execution of the strategy concept. Without overlooking any trades, a computer can go through large amounts of data in very little time. In contrast, human decisions cannot be consistently reproduced (because of the effects of stress, moods, or subjective judgment) and require significant time to simulate trade results even for short periods.

“Validation is the process of making sure that the trading concept provides a real market edge, meaning one likely to persist in the future. In other words, validation focuses on identifying the ‘fool’s gold’ from the real precious metal before getting investors to buy a stake in the prospecting venture.”

Flexible Plan Investments’ approach

The experienced and knowledgeable research group at Flexible Plan Investments (FPI) spends countless hours and resources in developing and validating investment strategies that are based in mathematical constructs. Led by President and Founder Jerry Wagner and Research and Portfolio Manager Daniel Poppe, the team is responsible, in part, for optimizing trading system models, developing and verifying new algorithmic trading methodologies through implementation and live trading, designing and testing proprietary asset-allocation approaches, and applying walk-forward optimization techniques.

Only strategies that demonstrate high probability of success against specific design objectives (and that have been backtested across various market conditions and scenarios) are considered for inclusion in FPI’s lineup of strategic portfolio solutions for advisers and their clients.

Three core principles guide FPI’s investment process:

1. A quantitative and systematic approach to dynamic risk management. FPI uses data-driven analytics to identify market trends and optimize portfolio decisions, ensuring each step is research-backed and precise, taking the emotion out of investing.

2. Innovation and evolution in multi-strategy diversification. Through ongoing refinement, advanced analytics, and new economic insights and the latest technologies, FPI works to keep highly diversified portfolios adaptable and resilient in changing markets.

3. Client-centered objectives and managing investor expectations. FPI’s process is designed to align with each client’s goals—offering the ability to build a customized portfolio that can remain consistent with the client’s financial objectives and risk tolerance through different market environments.

For additional perspective, please read the in-depth interview with Jerry Wagner in The Wealth Advisor, which explores FPI’s differentiated approach to active investment management, innovation, and personalized support.

But what about the Super Bowl Indicator?

At this time of the year, it seems appropriate to shift briefly from the serious business of strategy construction to one of those silly and coincidental seasonal forecasting metrics.

Specifically, what will the “Super Bowl Indicator” say about market prospects for 2026? And, based on that, who should you be rooting for in the Super Bowl this coming Sunday--the Seattle Seahawks (NFC) or the New England Patriots (AFC)?

According to Investopedia, the “Super Bowl Indicator” can be characterized as follows:

• “The Super Bowl Indicator predicts stock market trends based on the winning conference of the Super Bowl team. A win for the NFC team predicts a bull market, while an AFC win suggests a bear market.”

• “From 1967 to 2025, the indicator was correct with 71% accuracy. Since 2005, however, it has only been correct about 40% of the time. Up to the 1990s, the Super Bowl Indicator boasted a more than 90% success rate in predicting the up-or-down outcome of the S&P 500. …”

There is an important caveat. Teams that originated in the pre-merger NFL are counted as NFC teams, even if they are now an AFC team. The Pittsburgh Steelers are a notable example, given their Super Bowl success.

One additional factor helps explain the indicator’s declining accuracy. When you consider the relative Super Bowl dominance of the New England Patriots (AFC) and, to a lesser degree, the Kansas City Chiefs (also AFC) in this century, it is hardly surprising that the predictive power of the Super Bowl Indicator has suffered since 2005. While 2008 and 2022 were steep drawdown years for the S&P 500, the Index has had a strong majority of positive years since 2005.

While we can have fun discussing this particular “indicator,” it just confirms what serious market strategists know to be true. No seasonal or historically based methodology—no matter its apparent strengths—can forecast short- or intermediate-term market outcomes with absolute certainty. And none justify abandoning sound risk management practices, diversification, and constant market vigilance.

That said, regardless of the Super Bowl Indicator’s validity, I say “Go Seahawks” anyway!

A trade for Yukon Cornelius: Silver and gold are nonstop

Tue, 27 Jan 2026 04:56:00 GMT

Christmas may be a month behind us, but Yukon Cornelius—the legendary prospector from “Rudolph the Red-Nosed Reindeer”—would be pretty ecstatic about what’s happening in silver and gold right now. And he wouldn’t be alone.

Market attention has shifted away from the major stock indexes and toward precious metals—first gold, and now, very clearly, silver.

A historic move in precious metals

With silver up roughly 145% and gold up around 65% last year, both metals are posting their strongest performances since 1979. Record after record is falling, while Wall Street forecasts seem to become outdated almost as soon as they’re published.

Gold ended last year around $4,325 per ounce. As I write this, it sits just over $5,000 an ounce. Silver did even better, finishing the year near $45 per ounce before pushing past $90 this month.

Silver, in particular, appears to be in what traders call a “price discovery phase,” a period with few historical reference points to slow momentum. The market is simply trying to determine, in real time, what it’s worth.

The last time precious metals captured this much attention was around 2011, when investors were fixated on whether silver could break $50 an ounce. After that, both gold and silver went relatively quiet for years, with renewed interest emerging only in the post-COVID period.

Forecasters left behind

Analysts missed this move badly.

In the London Bullion Market Association’s annual Precious Metals Forecast Survey, the average analyst forecast for gold’s 2025 price came in almost $700 below the metal’s actual average price for the year—a record miss in both dollar and percentage terms. They also underestimated silver’s average 2025 price by roughly $8 per ounce.

Now those same analysts have released their 2026 predictions, and they’re the most bullish on record, with gold targets near $4,750 and silver approaching $80. Yet, as of now, prices have already exceeded both.

These forecasts reflect annual averages, so prices may still settle. Even so, the message is clear: momentum has been stronger than anyone expected.

What is this rally telling us beyond the price tag?

I think it reflects something deeper about how investors view risk today. When gold and silver rise together, and silver outperforms by this kind of margin, it suggests investors aren’t just seeking safety. They’re also positioning for industrial demand growth and expressing concern about long-term confidence in fiat currencies.

The gold-to-silver ratio has compressed significantly, according to Kavout. Historically, when this ratio falls, it often signals a mix of optimism about growth (which supports silver’s industrial role) and ongoing concern about monetary stability (which supports gold).

Don’t let FOMO test your discipline

This is where the conversation gets uncomfortable.

When an asset doubles or triples in a year, the mathematics of future returns changes. The upside for silver at $90 is fundamentally different from the upside at $30.

Recently, Flexible Plan Investment’s (FPI’s) president, founder, and chief investment officer Jerry Wagner wrote about the three types of risks that surround investors on a daily basis. With gold and silver, we’re starting to see a probable risk of a pullback show up in quantitative models. Analysts at Société Générale have flagged silver as potentially entering bubble territory.

Even in a rally supported by fundamentals, sentiment can become overheated. Fear of missing out (FOMO) becomes a powerful driver.

That’s when investors see the headlines and think, I’ve got to own silver.

When enthusiasm runs ahead of fundamentals

Signs of speculative excess are starting to appear.

Nearly half of all ETF inflows into silver funds occurred in the final month of 2025 as prices accelerated. Physical silver premiums in Shanghai have run $8 to $10 above London prices—the widest spread on record. These kinds of dislocations tend to happen late in fast-moving markets.

Silver is often described as “gold on steroids.” It’s smaller, more volatile, and serves a dual role as both an industrial input and a store of value. That combination creates explosive upside potential, but also sharper downturn risk.

History is instructive. In 1980, silver reached $50 during a speculative bubble, collapsed below $5, and took more than three decades to reclaim that high. That is the trap of chasing exponential moves. Psychologically, it becomes easy to believe the trend will continue forever.

Risk matters more as prices rise

Sometimes fundamentals do justify higher prices. But that doesn’t mean buying at any price is prudent.

Silver at $90 could go to $180—but it could also pull back 20% or 50% along the way. As prices climb, managing risk becomes increasingly important.

So how should investors think about precious metals in 2026?

First, acknowledge what you don’t know. Nobody knows whether silver will hit $120, fall back to $60, or run higher before any meaningful correction. Forecasts are guesses, even when they are informed guesses.

Second, consider portfolio balance. If commodities were meant to be a 5% allocation, make sure this rally hasn’t quietly turned that into 8% or 10%. Rebalancing remains one of the most effective tools for managing concentration risk.

Lastly, focus on rule-based discipline over excitement. The goal is not to call the top. The goal is to participate thoughtfully when trends are strong—and to maintain a plan for when momentum eventually fades.

Yukon Cornelius had one thing on his mind, as Burl Ives famously sang:

“Silver and gold,
Silver and gold,
Everyone wishes for silver and gold …”

As investors, we might all do well to keep our eyes clear and avoid letting the prospect of never-ending riches replace the steady work of risk management and sound decision-making.

Personal benchmarks

Tue, 20 Jan 2026 19:20:00 GMT

by Jerry Wagner

It’s that time of year again—time for a benchmark, a point of reference that helps you see where you are and how far you’ve come.

For me, that point of reference started at a doorway. I can still feel the doorjamb pressed against the back of my head as my dad balanced a ruler on top and penciled a line where it met the molding. I stretched upward, resisting the urge to stand on tiptoes. My sister and brothers followed in order by age, each leaving behind a line, a date, and a name. When we were finished, we crowded around the doorway and compared this year’s line with last year’s—our personal benchmark. How much had we grown? The answer was right there.

Most families have some version of this ritual. It’s a simple way to measure progress—to see where you’ve been and whether you’re moving in the right direction. That same instinct shows up every quarter when investors open their account statements and look for answers.

The problem with traditional market benchmarks

For many firms, benchmarking is straightforward. Investment returns are printed next to the S&P 500 Index return and left for comparison. Some firms go a step further and include additional indexes—maybe a bond index, the NASDAQ, or an international measure—for added context.

The problem is that these comparisons are often unrealistic. Not only is the S&P 500 a poor benchmark for most investors, but for many individual portfolios, it is simply inappropriate. A benchmark should have real relevance to the person using it.

What indexes don’t tell you

While indexes can show the direction of the stock or bond market, they say nothing about whether an investment has fulfilled its intended purpose for an investor. An index is simply a collection of stocks chosen by a committee to be used by the media. It does not measure success in meeting an investor’s goal. They are not the personal benchmark that every investor needs.

Indexes are also often used in a one-dimensional way. Quoting only the return of the S&P 500 is like citing the payoff of a winning lottery ticket—it’s meaningless without understanding the risk involved. Yes, a lottery ticket can deliver an extraordinary return, but the odds of winning are vanishingly small. The risk is nearly total.

The same principle applies to market indexes. You may know that the S&P 500 gained 10% in a quarter, but that number alone ignores the fact that the index has, at times, declined by more than 50%. If you knew an investment could lose more than half its value, would you choose it? And if not, why compare your portfolio to a risk profile you could not tolerate?

How we create a personal benchmark

We make all of this standard information available to financial advisers through our research, illustrations, composite performance reports, and firmwide GIPS-verified information. Our composite performance and GIPS reports show how strategies have performed historically.

But when you engage an investment advisory firm, you are also engaging its research capabilities—and its ability to adapt and refine even well-established strategies as market conditions change. That ongoing work matters just as much as the historical numbers.

On our account statements, we use current research report benchmarks and fund rules to prepare a personal benchmark for each client account. We call this our OnTarget Investing process. You can visit the OnTarget Investing website to learn more, but here is a brief overview.

The process starts with the suitability questionnaire clients complete as part of their investment management agreement with us. By pairing each client’s answers with the strategy or portfolio of strategies chosen by each client and their financial adviser, we can establish a personal benchmark aligned with the client’s stated investment time horizon.

This personal benchmark is provided to clients in the initial proposal and then delivered with each subsequent account statement. The goal is simple: to give clients a customized, relevant measure for evaluating how their account is performing over time.

How the OnTarget Monitor works

Each client’s personal benchmark is best illustrated by the OnTarget Monitor (see the sample below).

The OnTarget Monitor uses hundreds of Monte Carlo simulations to compare a client’s portfolio’s performance with the strategy’s benchmark. The portfolio value (the black line) is plotted against a color-coded range of possible investment outcomes over the client’s stated time horizon.

The multicolored background represents the probability that the client’s account will reach the forecast composite benchmark values shown on the right side of the chart, based on the strategies currently used. The composite benchmark reflects the benchmarks of each strategy in the client’s account, weighted by allocation.

The black line shows the account’s monthly percentage change, after advisory fees, ending with the current balance. The time period shown matches the investment time horizon indicated in the client’s suitability questionnaire.

What “OnTarget” performance means

We refer to “OnTarget” performance as periods when the portfolio’s value remains within the blue and green zones.

A bear market can briefly push even the best strategies or diversified portfolios into the red or yellow zones. That alone is not unusual. However, prolonged time in the red zone may indicate that the current mix of strategies no longer aligns well with the client’s objectives or risk tolerance, or that a portion of the portfolio may be out of sync with the current market environment. In those cases, it may be appropriate for the client and their financial adviser to review the strategy mix and consider adjustments.

Why personal benchmarks matter

My parents lived in their home for almost 50 years. My father, who was a builder, had been the contractor. Leaving that house was not easy.

Before we did, each of us returned to the doorway. We ran our fingers over the many notches, and bent down and squinted at the faded writing. Those marks told a story—where we had been, and how we had grown.

That is the power of a personal benchmark. May yours be OnTarget, not some media-inspired number that fails to reflect your risk profile and investment time horizon.

Risk is always with us

Tue, 13 Jan 2026 04:51:00 GMT

“Nothing is certain except death and taxes,” Benjamin Franklin famously observed. I would add one more certainty to that list: risk.

The specific risks we face change over time and vary by circumstance. In today’s world, which seems to be growing ever smaller, the risks faced in one corner can be very different from those encountered in another.

What is constant is that, regardless of circumstance, location, or century, risk remains an integral part of our lives. It is an everyday element. It is always with us.

We are very aware of some risks and probably overemphasize their influence. News programming often seems designed to keep us in a constant state of distress, described by some as “a horror movie from which we don’t get to go home.” But I do not think we should let this induced “culture of fear” overcome us—especially when it comes to how we think about risk in our financial lives.

On the contrary, as an entrepreneur, I believe that opportunities arise from taking risk. Fear of risk, by contrast, can overwhelm and paralyze.

If risk is always with us, yet an overfixation on it can be detrimental to how we live our lives, how should we think about it? As with most fears, the best response is often to learn more about it and understand how it affects us, helping us achieve a better sense of balance.

There are many types of risk. Investors face at least three main types, and each must be approached differently.

Unavoidable risk

The first type is probably the least likely, but it often seems to be the most feared. This is unavoidable risk—the risk that something bad will happen no matter what you do. Some people, including some investors, behave as though this kind of risk is far more common than it actually is.

In investing, whether in bonds or stocks, we know that volatility and bear markets are inevitable. Even so, we can take steps to help mitigate the effects of these declines. Asset and strategy diversification, combined with dynamic risk management, can help diminish losses, even if such measures cannot always avoid them entirely.

Improbable risk

The second class of risk involves those that are improbable—risks that occur only a small percentage of the time. These tend to push us toward one of two responses: ignoring them because they are unlikely to happen or slipping into the paralysis of a broader culture of fear.

We see this pattern often in how people react to alarming headlines or isolated events. In investing, everyone has heard stories of someone who lost everything during the Great Depression or a major financial crisis. These market collapses are extremely rare, yet they do occur. However, focusing on them can distort perspective and lead to inaction.

Some investors experienced significant losses during the brief but sharp bear market in early 2020. Many were then punished again when they remained on the sidelines during the recovery that followed, having overemphasized the risk of another crash.

There is a solution to this type of risk: working with a financial adviser to build a portfolio of investment strategies that includes both a defensive plan to exit the market when conditions deteriorate and an offensive plan to reengage when conditions improve.

Probable risk

The final type of risk is probable, or realistic, risk—the kind we can reasonably anticipate. We’re told that if you smoke, lung and breathing difficulties are likely. If you drive a car, some type of accident over your driving lifetime is probable.

Probable risks are everywhere around us. They permeate our lives. Yet despite their prevalence, our minds are wired to assess them quickly and take prompt action.

The human brain evolved to deal with probable risks in this basic way, and it served our early ancestors well. Faced with immediate danger, they had to decide instantly whether to fight or flee, and that instinct helped them survive a hostile environment.

Modern life, however, presents far more complex decisions. Studies show that humans are not very good at weighing probabilities, and even trained statisticians can be misled by the brain’s tendency to reject the more probable of two outcomes.

This often stems from an overreliance on recent experience. For example, a down day, week, or quarter in an investment can easily be extrapolated into the future, leading to fear. Loss aversion compounds the problem. Research shows that the fear of losing a dollar has a greater influence on decision-making than the prospect of gaining more than two dollars.

As a result, some investors allow recent market activity to derail a well-constructed investment plan or strategy. Fear of loss can overshadow the satisfaction of future market highs and prompt an investor to abandon a stock, bond, or strategy after a single disappointing quarter.

Yet it is unlikely that the original investment decision was based on one quarter’s return. More often, it reflected confidence built on years of performance, not a short-term setback.

While misjudging probable risk can lead us astray, there is also a positive side to this category of risk. Probable risks are anticipatable and, to some extent, controllable. You can stop or limit smoking. You can insure against a car accident. And in investing, you can adjust or reformulate your portfolio.

A solution to all three types of risk

Dynamic risk management can help address all three types of risk within an investment portfolio.

Bear markets tend to fall into two broad categories:

Probable “baby bears,” which are short, frequent, and relatively shallow (20% or less in downside risk).
Improbable but unavoidable “super bears,” which are rare, longer lasting, and much deeper declines (when the market falls more than 20%).

To cope with the baby bears, a simple passive allocation can be an effective tool. Even better, in my opinion, is a multi-strategy core portfolio.

Multi-strategy core portfolios are suitability-based and use multiple strategies that include asset-class diversification, strategy diversification, and dynamic risk-management measures—rather than the asset-class diversification alone used in traditional passive asset allocation. These portfolios can help keep investors engaged in the market most of the time while seeking to avoid whipsaws and sharp, shallow corrections.

In contrast, tactical strategies (such as our Classic, QFC Self-adjusting Trend Following, and Volatility Adjusted NASDAQ strategies) and dynamic rotation strategies (such as our Evolution and Market Leaders strategies) are often better suited for the “explore” portion of a portfolio, designed with super bear markets in mind.

Tactical strategies can move entirely out of stocks when necessary to help mitigate the steep losses associated with super bears. Dynamic rotation strategies can become increasingly defensive as market conditions deteriorate, eventually shifting to cash or bonds to sidestep the severe part of a decline. Both approaches rely on tested methodologies to reenter the market when conditions improve.

By combining multi-strategy core portfolios designed to manage baby bears and tactical and rotational explore strategies aimed at super bears, investors can build portfolios that address all three types of risk. Dynamic risk management makes this possible.

***

Each of us must remember that risk is real and that, like death and taxes, it is always with us. The goal is not to be paralyzed by risk, but to anticipate it, understand it, and seek to manage it thoughtfully.

New year, new resolutions: Can advisers turn good intentions into action?

Tue, 06 Jan 2026 04:32:00 GMT

Early every January, Americans dust off the same three traditions: wishing family, friends, and colleagues a “Happy New Year;” putting away holiday decorations; and declaring they’re about to become a new person. A Forbes Health/OnePoll survey heading into 2024 stated, “Many respondents plan to commit to multiple goals, with 66.5% stating they plan on making three or more resolutions for the year ahead.”

While the numbers for those making resolutions can vary depending on what poll you look at entering 2026, the “greatest hits” look familiar: exercise more, eat healthier/lose weight, save more money, improve career and personal life, spend more time with friends and family, and generally feel happier or improve well-being.

For financial advisers, that mindset could be an opportunity. Many clients are already primed to act—the adviser’s role is to turn a January intention into a repeatable process.

The catch is follow-through. While one study says 89% of people believe they are at least somewhat likely to follow through on their resolutions, prior research has said only about 25% of resolution-setters achieved at least some success.

That is pretty consistent with observations shared in a Gallup webcast, where speakers noted that by mid-February, roughly 80% of people who set New Year’s resolutions had abandoned them.

Psychologically, resolutions frequently fail for the same reason self-directed investors often see poor results compared to professionally managed accounts: goals are vague, too aggressive, or unsupported by a system designed to keep behavior on track.

The good news is that willpower is not the main lever—structure is. Evidence-backed tactics include (1) making goals smaller and more specific, (2) building implementation intentions (“If X happens, then I’ll do Y”) to pre-decide the when/where/how, and (3) using consistent self-monitoring—even simple tracking—to create feedback and accountability.

One practical takeaway financial advisers can immediately apply is to help clients convert vague resolutions, such as “save more,” into an automated, measurable routine, such as setting specific monthly contributions to a designated account. Research also shows that framing objectives as specifically goal-oriented (“build an emergency fund of six months’ expenses”) rather than purely avoidance-oriented (“stop spending so much”) tends to be more successful. Pair those approaches with automation, tracking, and accountability, and advisers may be able to convert a feel-good statement into a system. That’s the adviser challenge—and opportunity: designing the environment so the desired behavior becomes the default.

What resolutions would advisers most like their clients to make?

As I started thinking about writing this article a week ago, I thought it would be interesting to ask advisers what resolutions they would most like their clients to make for 2026.

I intentionally asked several dozen advisers not to focus on big-picture issues in their financial- and investment-planning process, but instead on specific behaviors that often come up, are potentially fixable in the coming months, or might even fall into the “pet peeves” category.

Far and away, the leading responses centered on advisers wishing that some of their clients would finally become serious about addressing their legacy, estate, and long-term-care planning. While this represents a small minority of their clients, it is troubling to them—for good reason. Several advisers also mentioned the serious emotional barriers some clients face in confronting their own mortality or potential health issues as they age, which is understandable. You can read more on how advisers address legacy-planning issues in the Proactive Advisor Magazine article, “Generational wealth transfer—or a change in legacy thinking?”

Related to legacy planning, a couple of advisers spoke about their wish that clients would get their adult children more actively involved in financial planning—both by including them in family planning sessions and by addressing the individual needs of the children themselves. In the article “Offsite ‘boot camps’ promote financial literacy to clients’ children,” one adviser discusses his successful financial education program targeted to that group.

Another common theme is that, despite the adviser’s best efforts to manage investment expectations, some clients still don’t fully grasp the value of a balanced, disciplined, and risk-managed approach to their overall portfolio. Here’s how a few advisers expressed it:

“I hope all of my clients would resolve to stop comparing their portfolio to a cap-weighted S&P 500 index.”

“I wish that some of my clients who are more risk-averse would better understand that to protect from downside, there are often sacrifices on return. You can’t have it all, even though they wish they could.”

“I wish a few of my clients would put more emphasis on how well they did this year rather than feeling upset they didn’t participate more in the silver rally!”

This insightful article, written a few years ago by a financial adviser, addresses many of the issues surrounding client investment expectations: “Why it’s critical to teach clients the importance of ‘behavioral adherence.’” Jerry Wagner, Flexible Plan Investments’ president, also often discusses investor expectations, including in his recent year-end article, “How to find true happiness in your investing.” He writes that true investor happiness comes from “making steady progress toward goals that are realistic, meaningful, and manageable.”

Other “resolution” topics mentioned by advisers included their hope for more qualified, unsolicited referrals (“Don’t keep our firm your best-kept secret”); better coordination between spouses or partners on paperwork and scheduling meetings (“We waste too much time going in circles”); encouraging clients to make more heartfelt and generous charitable donations (“They inevitably find it so fulfilling”); and addressing the ongoing issue of excessive debt for some clients (“I wish every single client, especially younger ones, would stop using buy now, pay later to ‘pay’ for things!”).

Perhaps my favorite sentiment for 2026 came from several advisers I interviewed last year, each of whom said it in slightly different ways:

“I wish all of my clients would focus as much on their happiness and health as they do on their wealth.”

Echoing that thought, on behalf of everyone at Flexible Plan Investments, we wish all of our readers a happy, healthy, prosperous, and productive New Year. And good luck to all of the contributing advisers as they work to turn those client resolutions into lasting results!

How to find true happiness in your investing

Tue, 30 Dec 2025 04:16:00 GMT

Most of us spend a lot of time chasing happiness, yet rarely pause to consider what it actually means. This time of year often invites that kind of reflection, as many people begin thinking about what they want to change, improve, or do differently in the months ahead in hopes of finding greater happiness.

Psychologists tell us that happiness is a state of “subjective well-being” (SWB). It is a sense of feeling good about yourself and your life in whatever context you experience it. In that way, it is not based on one absolute definition but rather on each person’s subjective state.

Still, there seems to be agreement on what does not result in true happiness. Being rich and accumulating possessions, while satisfying in the short term, does not appear to lead to lasting happiness.

Some psychologists believe that happiness is closely tied to progress. In a blog post for Psychology Today, Timothy Pychyl explains that “progress on our goals makes us feel happier and more satisfied with life (our subjective well-being, SWB, increases).”

He adds that “the research on goal pursuit and well-being reveals an interesting cycle between progress on our goals and our reports of happiness and life satisfaction.” This cycle is shown in the following illustration.

This image conveys the concept that as we make progress toward our goal, we reinforce and expand our sense of well-being—and as our sense of well-being increases, it enhances our ability to progress and reach our goals.

How does happiness fit into investing?

While investing is only one part of our lives and our broader pursuit of happiness, the realities of modern life make it an important one. So, how does the “happiness is progress” concept fit into the investing context?

We all seek progress in our investing, but we define it in different ways. Many investors assume progress means maximizing returns. By that logic, buying a lottery ticket would be the ultimate strategy: invest a dollar for the chance at an almost infinitely large payoff. The problem, of course, is that you are far more likely to lose your entire investment.

So something more than returns alone must be considered when evaluating investment progress. Risk and probability are essential parts of the equation.

Many years ago, I co-wrote a paper for the Journal of Portfolio Management that demonstrated that, in judging the efficacy of market timing, you had to assess returns in light of the risk taken. Today, risk-adjusted returns sit at the core of modern portfolio theory and the growth of liquid alternatives.

Progress in investing, therefore, should be judged by achieving the desired level of risk-adjusted returns.

The role of risk

The “desired level” is the subjective part. It is determined by one’s suitability profile. What level of risk can you live with and afford? It’s different for everyone, and it changes as one’s wealth rises and falls, and as the market stirs emotions that fluctuate from fear to greed and back again.

This is why we regularly ask investors to use our suitability questionnaire to inform us of any changes in their profile over time or when they want to change strategies.

We use quantitative analysis to supply the probability part of the “investment–progress equation.” We think of “probability” as the odds of winning. But essential to giving the “odds” any meaning is the concept of repeatability. Flipping a coin yields odds of 50/50. But the results are random.

With quantitative investing, one seeks a repeatable process that has an edge over the random outcomes of a coin flip. That does not mean that it will be right every time, but rather that it will be right more often than a coin toss, or generate more returns for the risk taken than a game of chance.

That’s why we develop computer-driven strategies. Having a computer follow a formula of commands yields a repeatable process. Being able to test that formula over history yields a probability of success.

You can’t have “progress”—and, thus, investment happiness—without a meaningful, manageable goal

The psychological definition of happiness found that the pursuit of a goal was essential to the concept of progress. But others have found that pursuing just any goal won’t necessarily lead to happiness. Just as the mere acquisition of wealth and objects is not likely to be satisfying, the pursuit of goals that stem from lowered expectations may not be challenging enough to evoke happiness.

Nor is requiring peak performance all of the time. That is simply not attainable. Life is made up of a series of peaks and valleys—as are the financial markets.

So simply making progress toward any goal is not enough to find happiness. Instead, we need to seek meaningful, manageable goals.

I often get the impression, when talking to investors and advisers, that their goal in turning to active managers is to find a strategy that captures all the gains of the S&P while suffering none of its losses. That’s not a manageable goal. It will lead to disappointment, not happiness.

A more realistic outlook is to first realize that the markets regularly have peaks and valleys. A manageable goal, then, is to end up with more dollars than you began with at the end of a full market cycle—while managing risk along the way. History has shown that this kind of discipline can leave investors in a stronger position than a purely buy-and-hold approach, particularly during periods marked by volatility and drawdowns.

We help investors focus on the more meaningful goal by providing a chart of their time invested with us and our OnTarget Monitor in their quarterly statements. The monitor uses the time horizon investors provide when they begin working with Flexible Plan Investments to project the range of probable outcomes for their combination of strategies.

In addition to this monitor, each quarter we track the performance toward the probable, attainable goal of each investor’s portfolio over the time horizon of their choice. Green means the portfolio is deemed OnTarget. Red indicates a change is in order.

Flexible Plan Investments offers many different strategies and suitability profiles, so if your portfolio is in the red, a better fit for the current environment is always just a strategy change away.

***

Happiness, as we’ve discussed, is not something that can be guaranteed or engineered through a single decision. More often, it emerges from making steady progress toward goals that are realistic, meaningful, and manageable.

For investors, that kind of progress does not come from chasing returns or searching for a “Holy Grail” strategy. It comes from setting attainable goals that reflect the level of risk one can comfortably and affordably accept, and from staying disciplined through the inevitable ups and downs along the way.

Progress, however, is not the same as constant motion. Moving simply to create the feeling of progress is rarely the answer. True progress is supported by understanding yourself, documenting that understanding through a suitability profile, and monitoring your progress toward a goal that is personal to you and your portfolio.

By keeping the focus on process rather than outcomes, investors can work toward a more durable form of investment happiness.

The frost on the window: Seeing through market uncertainty

Tue, 23 Dec 2025 04:07:00 GMT

When I woke up this morning, the wind chill was hovering near zero, and wintry winds were howling outside. Through the window, I could see the early morning commuters cautiously navigating the snow-covered street as they began their trek to the city.

The scene reminded me of my childhood and how different winters were before thermal windows. Back then, waking up on a chilly winter morning often meant finding the windowpane coated in frost. The glass was still there, and the world outside was unchanged, but my view was distorted and obscured. What was really happening beyond that frosted pane?

Market uncertainty can feel exactly like looking through a frosted window. When volatility strikes or news headlines scream doom and gloom, your financial future may appear blurry and hard to interpret. The world outside your portfolio hasn’t fundamentally changed, but your perception of it has. In these moments of uncertainty, many investors make the mistake of reacting to the frost instead of taking a moment to clear the glass.

Today, I want to talk about how to navigate those frosty, uncertain markets—how to cut through distractions, manage emotions, and stay on course toward financial goals. Just like a frosty window on a winter morning, clarity will return with a little sunlight, patience, and the right tools.

The frost: What creates market uncertainty?

Frost forms when the warm, moist inside air meets the cold, dry, unforgiving surface of a windowpane. Market uncertainty arises similarly: external events meet investors’ internal fears and emotions, clouding their view of the future.

Common drivers of market uncertainty include:

• Geopolitical tensions: Whether it’s trade wars, military conflicts, or shifting alliances, global events can send shockwaves through markets.

• Economic data surprises: Unexpected inflation numbers, job reports, or GDP figures can create sudden volatility.

• Corporate earnings misses: A big-name company’s failure to meet expectations can ripple through entire sectors.

• Unforeseen crises: Events like the 2008 financial crisis, the COVID-19 pandemic, or even a new administration in Washington can blindside markets, leaving investors scrambling for answers.

Each of these factors is like a blast of warm, moist air hitting the market’s clear, cold glass, forming a layer of frost that distorts reality. However, the underlying fundamentals—the long-term drivers of market growth and recovery—often remain intact. It’s our perception of the situation that’s altered, not the reality itself.

How our emotions and biases frost our view and distort perception

When the window is frosted, our first instinct might be to give up on the view or simply walk away. But these reactions are often unsatisfying, and the same is true for investing during periods of uncertainty. Behavioral finance teaches us that our emotions and biases can cloud judgment, leading to impulsive decisions that harm long-term outcomes.

Recency bias: Overreacting to recent events

Recency bias causes us to overemphasize recent events and assume they will continue indefinitely. If a strategy has been underperforming, it’s easy to believe that this trend will persist. But history tells us that no strategy outperforms in all market environments. Markets and strategies are cyclical; winter eventually gives way to spring. Just as every bear market has been followed by a bull market, strategy outperformance often follows periods of underperformance.

Anchoring bias: Stuck with a single view

When frost clouds our view, we often anchor to what we think we should see—a specific price or portfolio value. This fixation can blind us to opportunities and risks right in front of us. Using dynamic, risk-managed strategies can help investors avoid being anchored to past market conditions and focus on the evolving landscape.

Overconfidence bias: Believing that past success guarantees future results

Overconfidence during periods of calm can leave us unprepared for volatile markets. When the window is clear, it’s easy to believe it will stay that way. But seasoned investors and financial advisers know that frost can form at any time. That’s why we continually monitor and adapt our strategies, ensuring we’re ready for the next storm.

The illusion of control: Believing we can influence unpredictable market outcomes

Investors sometimes believe they can control market outcomes by taking on the trading or timing themselves. Even though they have a tactical money manager, they may try to “time the timer.” Scraping frost with your bare hands might feel like taking action, but it often makes the problem worse. Similarly, overreacting to market noise can cloud your judgment further. Instead, rely on our dynamic strategies, which use data-driven insights, to guide your portfolio through uncertainty.

Strategies to clear the frost

How do we clear the frost and regain clarity during uncertain markets? It starts with recognizing that the frost is temporary and that we have the tools to deal with it.

Step back and gain perspective

Just as a frosted window looks less daunting from a distance, market uncertainty often feels less overwhelming when we zoom out to the long-term view.

Here’s a recent daily chart of the NASDAQ Composite Index. It looks fairly volatile, making it hard to guess the direction it is heading.

Three Months of Daily Prices

But when we take a step back and look at the same index on a weekly basis, the longer-term trend seems much clearer.

Three Years of Weekly Prices

These two perspectives of the same index show how dramatically our view of the market can shift depending on the timeframe we examine. While daily fluctuations might seem alarming, a broader perspective often reveals clearer trends and patterns. This principle guides our approach to market analysis, which uses two key tools to help cut through market noise and maintain clarity:

• Put today in its historical perspective: Look at past market downturns and recoveries. The S&P 500, for example, has weathered countless recessions, crashes, and corrections, but has consistently trended upward over the long term. The same holds true of bonds and gold. Dynamic management can turn the ups and downs of these asset classes into opportunities.

• Focus on goals: Keep your investment objectives in mind. For investors nearing or in retirement, using strategies designed to dynamically manage risk can help mitigate losses during downturns, leaving more dollars for your golden years.

Trust your road map

When the road ahead is unclear, a solid road map can make all the difference. For investors, this road map is found in well-designed, risk-managed investment strategies.

• Dynamic strategies: Flexible Plan Investments’ (FPI’s) dynamic, adaptive strategies adjust to changing market conditions—acting like a defroster in your car, clearing the view automatically so you can focus on the road ahead.

• True diversification: A portfolio diversified across not just asset classes but also investment strategies reduces the impact of volatility in any one area. It’s like insulating your windows to prevent frost from forming in the first place.

Avoid impulsive decisions

It’s tempting to act quickly during uncertain times, but impulsive decisions often do more harm than good. Instead, take a measured approach:

• Regular reviews: Check your portfolio periodically, not daily. Frequent monitoring can amplify emotional reactions.

• Stay the course: History shows that sticking with the plan is more profitable than impulsively reacting to news headlines or chatter from the herd.

• Use professional guidance: Investors should consider working with a financial adviser to help them stay disciplined and focused.

Leverage technology and data

Today’s tools and data can help cut through market noise. Our adaptive strategies, for example, can analyze vast amounts of information to identify trends and opportunities that might not be immediately apparent.

• Automated strategies: Let technology handle the heavy lifting of managing risk and optimizing returns.

• Objective analysis: Rely on data-driven insights rather than emotions or speculation.

Every frost melts

History shows that no frost—or market environment—lasts forever. Consider the 2008 financial crisis. At the time, it felt like the end of the financial world: Markets were down over 50%, unemployment was soaring, and fear was everywhere. Yet if investors had used active, tactical strategies, such as those available at FPI, to mitigate losses from holding on until the bottom, they could have had more money to invest with when one of the strongest bull markets in history unfolded over the following decade.

Or think back to March 2020, when the COVID-19 pandemic sent markets into a tailspin. Within months, markets not only recovered but reached new highs. Those who avoided much of the losses and had the knowledge to reenter the market as it pivoted higher would have been especially well-rewarded.

The key takeaway: Markets are resilient. Dynamic, risk-managed portfolios are built to respond, protect, and prosper. They have faced wars, recessions, pandemics, and political upheavals, and they are designed to weather future challenges as well. The frost always melts, and when it does, the view beyond the window becomes clear once again.

Tools to help you clear the frost

As we pause this week to enjoy the simple wonders of the holiday season—time with family, familiar traditions, and a quieter rhythm—let’s take a breath and remember that uncertainty is like frost on a window: temporary and not necessarily reflective of the reality outside. Just as the morning sun melts the frost, dynamic, risk-managed strategies can help cut through market uncertainty to reveal the profitable path before us.

Having a trusted partner to help clear away the frost allows you to focus on your journey with confidence. Many investors choose to work with FPI for this reason—to help clear the haze of uncertainty. Our approach focuses on managing your portfolio quantitatively, employing the lessons of the past to guide your investments through whatever weather lies ahead.

In tomorrow’s investment landscape, the winners won’t be those who predict the frost, but those who have systems in place to consistently clear it away. As markets evolve, will you let uncertainty cloud your vision, or will you trust in systematic, dynamic strategies to help clear your view?

Here are some next steps you can take in navigating market uncertainty:

• Investors: Schedule a portfolio review with your financial adviser to align your strategies with your goals and time horizons, as well as today’s market conditions.

• Stay informed: Read our weekly update, delivered to your inbox each week and available at www.flexibleplan.com/news.

• Financial advisers: Join our next webinar to learn how our strategies adapt to changing markets.

The road ahead may have its twists and turns, but with clarity, purpose, and the right systems in place, your financial destination can remain firmly within reach.

From all of us at Flexible Plan Investments, we wish you and your family a Merry Christmas and a peaceful holiday season. May this time bring rest, perspective, and clarity as you enjoy the days ahead.

Preparation over prediction: Why discipline matters heading into 2026

Tue, 16 Dec 2025 17:42:14 GMT

This Christmas, I will be enjoying a little humble pie for dessert. As we close out 2025 and look ahead to the new year, it feels like a fitting way to reflect on a market environment defined by confidence, uncertainty, and the ways risk can build when conditions look favorable.

At the start of the year, I referred to 2025 as the “year of the commodity trading advisor,” with a focus on improving risk management, preparing portfolios for future volatility, and acknowledging that—excluding the COVID period—we are firmly in the later stages of a long bull market cycle. The goal was never to predict a downturn but to think more carefully about how risk should be managed as markets mature. Looking back now, I was right and wrong at the same time.

A year of mixed signals

That sentiment, in many ways, captures how 2025 unfolded. It was a year defined by periods of optimism followed by moments of uncertainty—confidence interrupted by caution.

Early in 2025, trade tensions escalated rapidly, triggering some of the most volatile market days we have seen in decades. Geopolitical stress persisted, with ongoing conflict in the Middle East and continued strain between the United States and China, particularly around technology exports and Taiwan. Investors also faced renewed concerns about the debt ceiling and a temporary government shutdown.

At the same time, artificial intelligence continued to dominate headlines and market performance. The Federal Reserve moved toward rate cuts while simultaneously acknowledging a softening labor market, even as inflation remained above long-term trends.

As we close out 2025 and look ahead to 2026, it is natural for investors to ask what comes next. Markets are near all-time highs, economic data remains broadly positive, and there is significant optimism surrounding innovation, particularly artificial intelligence. On the surface, conditions look favorable.

It is precisely during periods like this when discipline matters most.

When confidence is high, risk often builds quietly

This does not mean a crisis is imminent, nor does it mean long-term investment plans should be abandoned. But it does mean acknowledging that risk often accumulates during periods of confidence, when strong performance can make vulnerabilities easier to overlook. When those risks eventually surface, they can do so abruptly and with little warning. Preparing is far more effective than reacting in real time.

As we think about 2026, several areas deserve careful consideration. Market valuations are elevated and, by many measures, approaching levels last seen during the dot-com era. High valuations alone do not cause markets to decline, but they do reduce the margin for error. When expectations are stretched, even modest disappointments—such as slower growth, weaker earnings, or shifts in sentiment—can lead to heightened volatility. Elevated valuations do not make markets wrong, but they can make them more fragile.

Artificial intelligence has also been a significant driver of recent returns, and its long-term potential is real. At the same time, the path forward remains uncertain. Substantial capital is being directed toward infrastructure, data centers, semiconductors, and power generation. History suggests that technological revolutions rarely unfold in a smooth, linear fashion. The risk is not that artificial intelligence will fail to matter but that capital may be misallocated along the way. Implementation risk is often overlooked when enthusiasm is widespread.

Economic growth remains positive but has shown signs of moderation. This is consistent with a late-stage expansion and does not imply an immediate downturn. The Federal Reserve has acknowledged emerging slack in the labor market, which has informed its willingness to ease policy. While monetary policy can be effective, it has limits. Rate cuts do not guarantee uninterrupted market advances, and reliance on policy support alone introduces its own risks.

Taken together, these factors are not reasons to abandon equities or retreat entirely to cash. They are reasons to remain disciplined. They reinforce the importance of understanding how each component of a portfolio works together to provide smoother outcomes and better risk-adjusted returns.

Why portfolio construction still matters

Diversification is not simply about owning many asset classes. It is about owning the right mix of asset classes. During periods of market stress, correlations can rise, and long-only exposures that appeared distinct can begin to move in the same direction. Without careful construction, portfolios can become more vulnerable precisely when protection is needed most.

A disciplined, risk-managed approach focuses on smoothing outcomes and improving risk-adjusted returns over time. That does not mean eliminating volatility or avoiding drawdowns entirely. It means designing portfolios with realistic expectations and an appreciation for how risk evolves as markets change.

A year-end reminder

Reflecting on 2025, I would have hoped commodity trading advisors would have performed better given the volatility we experienced. That is disappointing. At the same time, it was instructive. Periods of strong equity performance and rising confidence are often when investors relax standards, concentrate exposures, and assume recent trends will continue indefinitely. That mindset has historically been costly. Sound judgment is best grounded in facts, not feelings.

As we look ahead to 2026, rather than labeling it the year of a single strategy, it may be more useful to think of it as a year of preparation. While no one can forecast the next market disruption, portfolios can be positioned in advance to manage volatility thoughtfully. Doing so reduces the likelihood of emotional decisions and creates the potential to benefit from market dislocations rather than be harmed by them.

This philosophy extends beyond investing. Preparation plays an important role across every aspect of financial life—from maintaining a comprehensive financial plan to working with advisers who understand your individual goals and help select strategies that take broader economic risks into account.

In that sense, the lesson extends beyond markets. Progress—whether in investing or in life—is rarely linear, and outcomes are often shaped long before they are visible. Preparation, discipline, and patience tend to matter most when results are uncertain.

As Detroit Lions fans know well, success is rarely determined by a single moment. It is built over time through preparation long before the outcome is known. With that in mind, I wish you a Merry Christmas and a healthy, prosperous New Year—and hope that 2026 rewards those who stay disciplined, patient, and prepared.

Active vs. passive: How about both?

Tue, 09 Dec 2025 04:55:00 GMT

As we approach the end of 2025, it’s a good time to look back on what has been a most interesting year for the markets.

It started with many questions surrounding a new administration’s economic initiatives, the swift actions of “DOGE,” and a flurry of executive orders.

The tariff meltdown in the first quarter and early April led to one of the fastest and largest two-day drawdowns for the S&P 500 in history—and a total closing peak-to-trough drop of about 19%. The Chicago Board Options Exchange’s VIX benchmark for volatility spiked to over 45.

Yet, despite continuing geopolitical, tariff, inflation, and interest-rate uncertainty, markets rallied remarkably to get back to a year-to-date gain of nearly 17%. Strong corporate earnings, excitement around AI initiatives, increased transparency on tariffs, a largely resilient consumer, and expectations of further Federal Reserve interest-rate cuts have been drivers of that impressive—though choppy—recovery.

Market volatility remains a major concern

Proactive Advisor Magazine publishes reviews of major trends in the wealth-management industry, especially those related to managed investment accounts; the use of third-party investment managers; and viewpoints on active, risk-managed investment strategies.

These overviews are particularly relevant in an investment environment where market volatility remains a major theme. (As we have seen again in 2025, volatility often cuts both ways—to the upside and downside. Many studies have shown how the “best” and “worst” days in the market often cluster together.)

Financial advisers, of course, have to address their clients’ concerns and provide solutions. In Gallup research published in July, a majority of investors said they were still concerned about future market volatility.

And a study by The Financial Planning Association noted that many financial advisers have reevaluated their clients’ portfolio construction in 2025, saying, “Among the practitioners who have recently reevaluated the asset allocation strategy they typically recommend or implement for their clients, 69% say anticipated changes in the economy were a factor in that reevaluation, and 63% cited market volatility.”

The debate: Active vs. passive—or both?

The debate over active versus passive investing tends to resurface every year, often heating up during times of market stress or when new data on the volume of active and passive mutual funds and ETFs is released. But, as noted in previous updates, those numbers don’t tell the entire story. Passive investment vehicles are often used in the construction of active strategies.

Given the concern over the high and unpredictable volatility in 2025, I believe some research from several years ago is still relevant.

As we saw during the COVID era, when market volatility becomes top of mind, more advisers turn to actively managed strategies for their clients’ portfolios.

A study conducted by The Journal of Financial Planning and the Financial Planning Association (FPA) in 2021 concluded, “The majority of advisers (58 percent) continue to favor a blend of active and passive management, as has been the trend for the past several years. However, the 2021 results show a continued decline in a purely passive approach.”

Senior Investment Strategist Dan Hunt of Morgan Stanley offered a similar perspective in the article, “A New Take on the Active vs. Passive Investing Debate”:

“… I spend a lot of time thinking about how to construct investment portfolios—and these days, a big part of that conversation centers on the role of active and passive styles of investing, an ongoing (and sometimes quite heated!) debate in the financial industry. …

“Active strategies have tended to benefit investors more in certain investing climates, and passive strategies have tended to outperform in others. For example, when the market is volatile or the economy is weakening, active managers may outperform more often than when it is not. Conversely, when specific securities within the market are moving in unison or equity valuations are more uniform, passive strategies may be the better way to go. Depending on the opportunity in different sectors of the capital markets, investors may be able to benefit from mixing both passive and active strategies—the best of both worlds, if you will—in a way that leverages these insights. …”

An article in 2024 from Russell Investments provides a related viewpoint:

“Just as a GPS navigator supplemented with a map provides both real-time guidance and a reliable backup, investors may benefit from the dynamic decision-making of active management alongside the potential stability of passive strategies. …

“Just as a GPS navigator analyzes real-time data to recalibrate routes efficiently, active management interprets market conditions to steer portfolios towards investment goals. Meanwhile, passive management, akin to a map, provides a predetermined route based on market indices, offering stability and a reliable foundation.”

The bottom line

In general, financial advisers we have interviewed for Proactive Advisor Magazine tell us that third-party money management—with a focus on risk-managed portfolios—has provided the following benefits for their practice and their clients:

• Enhanced risk management and diversification

• Mitigation of market volatility

• Sophisticated, rules-based strategies that take emotion out of the investment equation

• A turnkey approach to strategy implementation and execution

• Professional investment management that frees up time for client planning and service

• Greater “behavioral adherence,” helping clients stick with their long-term investment plan through full market cycles

I believe the research cited above and the extensive feedback we have heard from financial advisers is quite consistent with the overall investment philosophy endorsed by Flexible Plan Investments (FPI) and discussed frequently in this weekly update.

Jerry Wagner, FPI’s founder and president, has summarized the firm’s approach in this way:

“Our strategies are designed to use active strategies to provide another layer of risk management that passive portfolios cannot deliver. In addition, combining these strategies or adding them to a passive portfolio can result in diversification that exceeds the preventative care attainable by a portfolio diversified only by asset classes. … Dynamic risk management and strategic diversification are today’s prescription of choice to prepare for and heal from unpredictable times.”

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