decoarative

Principles of Long-Term Investing Resilience
 

Download
Print

  • 1. Market

    1. Understand Market Movements

     

      KEY POINTS

    • While unsettling, market volatility and declines are inevitable and normal.
    • Historically, stock markets have recovered and posted gains.

     

    Return to top

  • 2. Volatility Is Normal

     

      KEY POINTS

    • Markets rarely go straight up.
    • Over time, markets have bounced back from downturns.
    • If clients sell during a decline, they may miss the rebound.

     

    Return to top

  • 3. Help Clients Control Their Emotions and Behavior

     

      KEY POINTS

    • 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.

     

    Return to top

  • 4. Take a Longer View

     

      KEY POINTS

    • 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. 

     

    Return to top

  • 5. Compounding and how it works

     

      KEY POINTS

    • 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.

     

    Return to top

  • 6. Diversification Benefits

     

      KEY POINTS

    • 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.

     

     

     

    chart

    Return to top

  • 7. Investments Should Align With Your Clients' Goals

     

      KEY POINTS

    • 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.

     

    Return to top

  • 8. The Importance of Rebalancing

     

      KEY POINTS

    • 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.

     

  • Return to top

    9. Understanding Risk is Critical

     

      KEY POINTS

    • 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.

     

    Return to top

  • 10. Why MFS?

     

      KEY POINTS

    • 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.

     

    chart

    Return to top

1. Understand Market Movements

 

    KEY POINTS

  • While unsettling, market volatility and declines are inevitable and normal.
  • Historically, stock markets have recovered and posted gains.

 

Return to top

2. Volatility Is Normal

 

    KEY POINTS

  • Markets rarely go straight up.
  • Over time, markets have bounced back from downturns.
  • If clients sell during a decline, they may miss the rebound.

 

Return to top

3. Help Clients Control Their Emotions and Behavior

 

    KEY POINTS

  • 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.

 

Return to top

4. Take a Longer View

 

    KEY POINTS

  • 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. 

 

Return to top

5. Compounding and how it works

 

    KEY POINTS

  • 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.

 

Return to top

6. Diversification Benefits

 

    KEY POINTS

  • 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.

 

 

 

chart

Return to top

7. Investments Should Align With Your Clients' Goals

 

    KEY POINTS

  • 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.

 

Return to top

8. The Importance of Rebalancing

 

    KEY POINTS

  • 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.

 

Return to top

9. Understanding Risk is Critical

 

    KEY POINTS

  • 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.

 

Return to top

10. Why MFS?

 

    KEY POINTS

  • 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.

 

chart

Return to top

57781.1
close video