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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.
KEY POINTS
Markets have been resilient: History has shown declines have not lasted.
Moving out of stocks potentially locks in losses and may prevent you from profiting from subsequent gains.
Source: FactSet and S&P US. Daily data as of 31 December 1989 to 31 December 2024. Returns above are in US dollars and calculated based on the S&P 500 Price Return Index. Max drawdown is the largest drawdown (peak-to-trough) within each calendar year.
Intrayear decline is the largest price drop from peak-to-trough during a calendar year.
Past performance is no guarantee of future results. These data are not intended to represent the performance of any MFS® portfolio. For more information on any MFs product, including performance, visit mfs.com.
The S&P 500 Index measures the broad US stock market. Returns for periods noted are price only.
It is not possible to invest directly in an index.
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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.
KEY POINTS
Historically, bull markets have beaten bears and driven long term gains.
Investing in the long term and having a disciplined plan can help work toward reaching your client's goals.
Source: SPAR, FactSet Research Systems Inc. Past Performance is no guarantee of future results.
It is not possible to invest in an index.
1 Dow Jones Industrial Average, 4/28/42 - 12/31/24. Returns are shown based on price only. The Dow Jones Industrial Average (DJIA) measures the US stock market. Returns are shown based on price only.
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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.
KEY POINTS
The average investor underperformed1.
Show clients how an appropriate financial strategy can help them pursue their goals.
Source: 1The Average Investor refers to the universe of all mutual funds investors whose actions and financial results are restated to represent a single invesor. This aproach allows the entire universe of mutual funds investors to be used as the statistical sample, ensuring ultimate reliability.
2Average investor return performance: Methodology: QAIB calculates investor returns as the change in assets, after excluding sales, redemptions, and exchanges. This method of calcuation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses and any other costs. After calculating investor returns in dollar terms, two percentages are calculated: total investor rate for the preiod and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a separate percentage of the net assets, sales, redemptions and exchanges for the period. Annualized return rate is calculated as the uniform rate that can be compounded annually for the period under consideration to produce the investor return dollars.
3The Average Equity Fund Investor comprises a universe of both domestic and world equity mutual funds. It includes growth, sector, alternative strategy, value, blend emerging markets, global equity, international equity and regional equity.
4The Average Fixed Income Investor is comprised of a universe of fixed income mutual funds, which includes investment-grade, high-yield, government, municipal, multisector, and global bond funds. It does not include money market funds.
This example is for illustrative purposes only and are not intended to represent the future performance of any MFS® product. Although the data is gathered from sources believed to be reliable, MFS cannot guarantee the accuracy and/or completeness of the information.
The S&P Total Return Index measures the broad US stock market. Bloomberg Barclays U.S. Aggregate Bond Index measures the U.S. bond market.
Past performance is no guarantee of future results. Keep in mind that all investments carry a certain amount of risk, including the possible loss of the principal amount invested.
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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.
KEY POINTS
Building wealth takes time. Think long term.
Talk to clients about the long-term growth potential of stocks and why they can play a part of a diversified portfolio.
Monthly data as of December 30, 1949 to December 29, 2024. S&P 500 Index price returns are gross and in US dollars.
The investments you choose should correspond to your clients' financial needs, goals, and risk tolerance.
Source: Factset. The historical performance of the index cited is provided to illustrate market trends; it does not represent the poerformance of a particular MFS® investment product. The S&P 500 (Price Return) Index is a commonly used measure of the broad stock market. Index performance does not take into account fees and expenses. It is not possible to invest directly in an index. Past performance is no guarantee of future results.
Common stocks generally provide an opportunity for more capital appreciation than fixed-income investments but have also been subject to greater market fluctuations. Keep in mind that all investments do not guarantee a profit or protect against a loss.
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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.
- Stocks may provide the growth potential needed to pursue goals.
KEY POINTS
The power of compounding drives value.
Differences in the rate of return effect how assets can grow over time.
Source: MFS research. This example is for illustrative purposes only and is not intended to predict the returns of any investment choices. Regular investing does not ensure a profit or potect against loss in declining markets. Investors should consider their ability to continue purchasing shres during periods of low price levels.
1Assumed rate of return. Does not represent the performance of any MFS fund, which would vary according to the rise and the fall of the markets. It is not realistic to expect that the stock market or any investment vehicle will have 20, or even 40 or more years of positive returns. These examples are for illustrative purposes only and are not intended to predict the returns of any investment choices. Rates of return will vary over time, particularly for long-term investments. There is no guarantee the selected rate of return can be achieved. The performance of the investments will fluctuate with market conditions.
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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.
KEY POINTS
A tale of two decades: one decade's laggards may be the next decade's leaders.
Predicting the best and worst asset classes each year can be very difficult. Diversification, however, can potentially add value and help manage risk.
The historical performance of each index cited is provided to illustrate market trends; it does not represent the performance of a particular investment product. Index performance does not reflect the deduction of any investment-related fees and expenses. It is not possible to invest directly in an index. The investments you choose should correspond to your financial needs, goals, and risk tolerance. For assistance in determining your financial situation, consult an investment professional. For more information on any MFS product, including performance, please visit mfs.com. past performance is no guarantee of future results.
The Diversified Portfolio: Equal allocations among the market segments are represented by the various market indices defined herein (excludes cash). Note that the portfolio’s assets were rebalanced at the end of every quarter to maintain equal allocations throughout the period. Diversification does not guarantee a profit or protect against a loss.
1 FTSE 3-month Treasury Bill Index tracks the daily performance of 3-month US Treasure Bills. 2 Bloomberg U.S. Aggregate Bond Index measures the US bond market. 3 Bloomberg Global Aggregate Index provides a broad-based measure of the global investment-grade fixed income markets. 4 Russell 1000 Value Index measures US large-cap value stocks. 5 Bloomberg Commodity Index is composed of futures contracts on physical commodities. 6 MSCI EAFE Index measures the non-US stock market. 7 Russell 1000 Growth Index measures US large-cap growth stocks. 8 Russell 2500TM Index measures US small-and mid-cap stocks. 9 FTSE NAREIT AII REITs Total Return Index tracks the performance of commercial real estate across the economy. It is not possible to invest directly in an index.
Note that the diversified portfolio’s assets were rebalanced at the end of every quarter to maintain the equal allocations throughout the period.
IMPORTANT RISK CONSIDERATIONS
International: Investing in foreign and/or emerging market securities involves interest rate, currency exchange rate, economic, and political risks. These risks are magnified in emerging or developing markets as compared with domestic markets. Small/Mid Cap stocks: Investing in small and/or mid-sized companies involves more risk than that customarily associated with investing in more-established companies. Bonds: Bonds, if held to maturity, provide a fixed rate of return and a fixed principal value. Bond funds will fluctuate and, when redeemed, may be worth more or less than their original cost.Commodity: Commodity-related investments can be more volatile than investments in equity securities or debt instruments and can be affected by changes in overall market movements, commodity index volatility, changes in interest rates, currency fluctuations, or factors affecting a particular industry or commodity, and demand/supply imbalances in the market for the commodity. Events that affect the financial services sector may have a significant adverse effect on the portfolio. Real Estate: Real estate-related investments can be volatile because of general, regional, and local economic conditions, fluctuations in interest rates and property tax rates; shifts in zoning laws, environmental regulation and other governmental actions; increased operational expenses; lack of availability of mortgage funds; losses due to natural disasters; changes in property values and rental rates; overbuilding; losses due to casualty or condemnation, cashflows; the management skill and creditworthiness of the REIT manager, and other factors.
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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.
KEY POINTS
Asset Allocation and Withdrawal Rates Are Key to Achieving Goals.
Predicting the best and worst asset classes each year can be very difficult. Diversification, however, can potentially add value and help manage risk.
Source: Ibbotson, MFS Analysis. Data for stock returns are monthly total returns to the Ibbotson US Large Stock Total Return Index from January 1926 through December 2024. Data for bonds returns are monthly total returns to the Ibbotson US Intermediate Term Government Bond Index from January 1926 through December 2023. Bloomberg US Treasury: 5-7 Year Index was used for January 2024 to December 2024 bonds return data. Withdrawals adjusted for inflation monthly using the Ibbotson published inflation rate for the relevant time period.
Past performance is no guarantee of future results.
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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.
KEY POINTS
Don't make unintended bets. Consider rebalancing your portfolio.
Rebalancing may help your clients' portfolios stay in line with their goals and risk tolerance.
Source: Factset
1 Time period above, reflecting a strong stock market, is based on performance of the S&P 500 Index (Stocks), which measures the broad US stock market, and the Bloomberg US Aggregate Bond Index (Bonds) which measures the U.S Bond market. Index performance does not reflect the deduction of any investment-related fees and expenses. It is not possible to invest directly in an index.
Past performance is no guarantee of future results. -
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.
KEY POINTS
Determining the risk in your portfolio may make the difference when pursuing your goals.
MFS: Navigating risk from all angles
At MFS, we believe managing the downside is just as important as capturing the upside.
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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.
KEY POINTS
1. Understand Market Movements
KEY POINTS |
Markets have been resilient: History has shown declines have not lasted.
Moving out of stocks potentially locks in losses and may prevent you from profiting from subsequent gains.
Source: FactSet and S&P US. Daily data as of 31 December 1989 to 31 December 2024. Returns above are in US dollars and calculated based on the S&P 500 Price Return Index. Max drawdown is the largest drawdown (peak-to-trough) within each calendar year.
Intrayear decline is the largest price drop from peak-to-trough during a calendar year.
Past performance is no guarantee of future results. These data are not intended to represent the performance of any MFS® portfolio. For more information on any MFs product, including performance, visit mfs.com.
The S&P 500 Index measures the broad US stock market. Returns for periods noted are price only.
It is not possible to invest directly in an index.
2. Volatility Is Normal
KEY POINTS |
Historically, bull markets have beaten bears and driven long term gains.
Investing in the long term and having a disciplined plan can help work toward reaching your client's goals.
Source: SPAR, FactSet Research Systems Inc. Past Performance is no guarantee of future results.
It is not possible to invest in an index.
1 Dow Jones Industrial Average, 4/28/42 - 12/31/24. Returns are shown based on price only. The Dow Jones Industrial Average (DJIA) measures the US stock market. Returns are shown based on price only.
3. Help Clients Control Their Emotions and Behavior
KEY POINTS |
The average investor underperformed1.
Show clients how an appropriate financial strategy can help them pursue their goals.
Source: 1The Average Investor refers to the universe of all mutual funds investors whose actions and financial results are restated to represent a single invesor. This aproach allows the entire universe of mutual funds investors to be used as the statistical sample, ensuring ultimate reliability.
2Average investor return performance: Methodology: QAIB calculates investor returns as the change in assets, after excluding sales, redemptions, and exchanges. This method of calcuation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses and any other costs. After calculating investor returns in dollar terms, two percentages are calculated: total investor rate for the preiod and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a separate percentage of the net assets, sales, redemptions and exchanges for the period. Annualized return rate is calculated as the uniform rate that can be compounded annually for the period under consideration to produce the investor return dollars.
3The Average Equity Fund Investor comprises a universe of both domestic and world equity mutual funds. It includes growth, sector, alternative strategy, value, blend emerging markets, global equity, international equity and regional equity.
4The Average Fixed Income Investor is comprised of a universe of fixed income mutual funds, which includes investment-grade, high-yield, government, municipal, multisector, and global bond funds. It does not include money market funds.
This example is for illustrative purposes only and are not intended to represent the future performance of any MFS® product. Although the data is gathered from sources believed to be reliable, MFS cannot guarantee the accuracy and/or completeness of the information.
The S&P Total Return Index measures the broad US stock market. Bloomberg Barclays U.S. Aggregate Bond Index measures the U.S. bond market.
Past performance is no guarantee of future results. Keep in mind that all investments carry a certain amount of risk, including the possible loss of the principal amount invested.
4. Take a Longer View
KEY POINTS |
Building wealth takes time. Think long term.
Talk to clients about the long-term growth potential of stocks and why they can play a part of a diversified portfolio.
Monthly data as of December 30, 1949 to December 29, 2024. S&P 500 Index price returns are gross and in US dollars.
The investments you choose should correspond to your clients' financial needs, goals, and risk tolerance.
Source: Factset. The historical performance of the index cited is provided to illustrate market trends; it does not represent the poerformance of a particular MFS® investment product. The S&P 500 (Price Return) Index is a commonly used measure of the broad stock market. Index performance does not take into account fees and expenses. It is not possible to invest directly in an index. Past performance is no guarantee of future results.
Common stocks generally provide an opportunity for more capital appreciation than fixed-income investments but have also been subject to greater market fluctuations. Keep in mind that all investments do not guarantee a profit or protect against a loss.
5. Compounding and how it works
KEY POINTS |
The power of compounding drives value.
Differences in the rate of return effect how assets can grow over time.
Source: MFS research. This example is for illustrative purposes only and is not intended to predict the returns of any investment choices. Regular investing does not ensure a profit or potect against loss in declining markets. Investors should consider their ability to continue purchasing shres during periods of low price levels.
1Assumed rate of return. Does not represent the performance of any MFS fund, which would vary according to the rise and the fall of the markets. It is not realistic to expect that the stock market or any investment vehicle will have 20, or even 40 or more years of positive returns. These examples are for illustrative purposes only and are not intended to predict the returns of any investment choices. Rates of return will vary over time, particularly for long-term investments. There is no guarantee the selected rate of return can be achieved. The performance of the investments will fluctuate with market conditions.
6. Diversification Benefits
KEY POINTS |
A tale of two decades: one decade's laggards may be the next decade's leaders.
Predicting the best and worst asset classes each year can be very difficult. Diversification, however, can potentially add value and help manage risk.
The historical performance of each index cited is provided to illustrate market trends; it does not represent the performance of a particular investment product. Index performance does not reflect the deduction of any investment-related fees and expenses. It is not possible to invest directly in an index. The investments you choose should correspond to your financial needs, goals, and risk tolerance. For assistance in determining your financial situation, consult an investment professional. For more information on any MFS product, including performance, please visit mfs.com. past performance is no guarantee of future results.
The Diversified Portfolio: Equal allocations among the market segments are represented by the various market indices defined herein (excludes cash). Note that the portfolio’s assets were rebalanced at the end of every quarter to maintain equal allocations throughout the period. Diversification does not guarantee a profit or protect against a loss.
1 FTSE 3-month Treasury Bill Index tracks the daily performance of 3-month US Treasure Bills. 2 Bloomberg U.S. Aggregate Bond Index measures the US bond market. 3 Bloomberg Global Aggregate Index provides a broad-based measure of the global investment-grade fixed income markets. 4 Russell 1000 Value Index measures US large-cap value stocks. 5 Bloomberg Commodity Index is composed of futures contracts on physical commodities. 6 MSCI EAFE Index measures the non-US stock market. 7 Russell 1000 Growth Index measures US large-cap growth stocks. 8 Russell 2500TM Index measures US small-and mid-cap stocks. 9 FTSE NAREIT AII REITs Total Return Index tracks the performance of commercial real estate across the economy. It is not possible to invest directly in an index.
Note that the diversified portfolio’s assets were rebalanced at the end of every quarter to maintain the equal allocations throughout the period.
IMPORTANT RISK CONSIDERATIONS
International: Investing in foreign and/or emerging market securities involves interest rate, currency exchange rate, economic, and political risks. These risks are magnified in emerging or developing markets as compared with domestic markets. Small/Mid Cap stocks: Investing in small and/or mid-sized companies involves more risk than that customarily associated with investing in more-established companies. Bonds: Bonds, if held to maturity, provide a fixed rate of return and a fixed principal value. Bond funds will fluctuate and, when redeemed, may be worth more or less than their original cost.
Commodity: Commodity-related investments can be more volatile than investments in equity securities or debt instruments and can be affected by changes in overall market movements, commodity index volatility, changes in interest rates, currency fluctuations, or factors affecting a particular industry or commodity, and demand/supply imbalances in the market for the commodity. Events that affect the financial services sector may have a significant adverse effect on the portfolio. Real Estate: Real estate-related investments can be volatile because of general, regional, and local economic conditions, fluctuations in interest rates and property tax rates; shifts in zoning laws, environmental regulation and other governmental actions; increased operational expenses; lack of availability of mortgage funds; losses due to natural disasters; changes in property values and rental rates; overbuilding; losses due to casualty or condemnation, cashflows; the management skill and creditworthiness of the REIT manager, and other factors.
7. Investments Should Align With Your Clients' Goals
KEY POINTS |
Asset Allocation and Withdrawal Rates Are Key to Achieving Goals.
Predicting the best and worst asset classes each year can be very difficult. Diversification, however, can potentially add value and help manage risk.
Source: Ibbotson, MFS Analysis. Data for stock returns are monthly total returns to the Ibbotson US Large Stock Total Return Index from January 1926 through December 2024. Data for bonds returns are monthly total returns to the Ibbotson US Intermediate Term Government Bond Index from January 1926 through December 2023. Bloomberg US Treasury: 5-7 Year Index was used for January 2024 to December 2024 bonds return data. Withdrawals adjusted for inflation monthly using the Ibbotson published inflation rate for the relevant time period.
Past performance is no guarantee of future results.
8. The Importance of Rebalancing
KEY POINTS |
Don't make unintended bets. Consider rebalancing your portfolio.
Rebalancing may help your clients' portfolios stay in line with their goals and risk tolerance.
Source: Factset
1 Time period above, reflecting a strong stock market, is based on performance of the S&P 500 Index (Stocks), which measures the broad US stock market, and the Bloomberg US Aggregate Bond Index (Bonds) which measures the U.S Bond market. Index performance does not reflect the deduction of any investment-related fees and expenses. It is not possible to invest directly in an index.
Past performance is no guarantee of future results.
9. Understanding Risk is Critical
KEY POINTS |
Determining the risk in your portfolio may make the difference when pursuing your goals.
MFS: Navigating risk from all angles
At MFS, we believe managing the downside is just as important as capturing the upside.
10. Why MFS?
KEY POINTS |
