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1. Market
1. Understand Market Movements
- While unsettling, market volatility and declines are inevitable and normal.
- Historically, stock markets have recovered and posted gains.
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2. Volatility
2. Volatility Is Normal
- Markets rarely go straight up.
- Over time, markets have bounced back from downturns.
- If clients sell during a decline, they may miss the rebound.
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3. Emotions
3. Help Clients Control Their Emotions and Behavior
- Help your clients determine their risk tolerance.
- Choose investments aligned with their goals and risk tolerances.
- Talk to your clients about the impact of market timing.
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4. Longer View
4. Take a Longer View
- Historically, stocks have offered higher long-term growth potential than bonds and/or cash.
- Yet many clients underinvest in stocks or try to time the market.
- In either case, clients could be missing opportunities.
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5. Compounding
5. Compounding and how it works
- Compounding is when an asset’s gains or income are reinvested to potentially grow.
- Over time, compounding is what typically drives the value of a portfolio.
- Treasury bills/bonds cash may not provide enough growth potential to pursue goals.2
- Stocks may provide the growth potential needed to pursue goals.
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6. Diversification
6. Diversification Benefits
- Asset class performance can change from year to year and decade to decade.
- Trying to pick the best performing asset consistently is almost impossible.
- Diversification spreads investments across assets that perform differently.
- Strength in one asset may offset weakness in another, which may help manage volatility.
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7. Goals
7. Investments Should Align With Your Clients' Goals
- Over time, goals may shift from growth to preservation.
- Consider aligning your client asset allocation with their goals.
- Your withdrawal rate is also important to help manage the client savings.
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8. Rebalancing
8. The Importance of Rebalancing
- Asset allocation can shift over time due to performance.
- If stocks outperform bonds, your stock allocation may rise, increasing risk.
- If bonds outperform stocks, your stock allocation may shrink, reducing growth potential.
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9. Risk
9. Understanding Risk is Critical
- You can’t avoid risk, but you can manage it.
- Understanding how an asset manager tackles risk is important.
- At MFS, we know that risk management is critical to pursuing wealth accumulation.
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10. Why MFS?
10. Why MFS?
- For a century, MFS' purpose has been to create wealth for our clients.
- We do that by trying to invest in companies that can grow for years to decades, not a quarter or two.
- We strive to invest for the long-term because it aligns with end investor goals.
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1. Understand Market Movements
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2. Volatility Is Normal
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3. Help Clients Control Their Emotions and Behavior
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4. Take a Longer View
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5. Compounding and how it works
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6. Diversification Benefits
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7. Investments Should Align With Your Clients' Goals
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8. The Importance of Rebalancing
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9. Understanding Risk is Critical
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10. Why MFS?
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