The Power of Great Investment Management from MFS

MFS regularly does something that’s extremely difficult: get their investors better yields than they would from a general index fund. Index funds are passive, stocks aren’t chosen by anybody. They just get added to the fund based on who is performing best in the market place. Because the market has the tendency to grow over time (something it has done for several generations, or as long as the USA has existed), we have every expectation that it will continue to do so, built upon a growing population, increased quality of life, novel technologies, broader trade, and a host of other factors.

But it’s hard to beat an index when it comes to actual yields. Investment managers mess it up all the time. What makes MFS different is their 3-tiered approach to investment management.

1) Global Thinking. MFS’s investment analysts come from all across the world. Because they are stationed in different economic situations from each other, they are able to speak to the nuanced realities which feed into the global economic ecosystem.

2) Risk Management. MFS only takes on a risk when they are sure they are or will be being compensated for that move. This is important for investors to know, that the choices their managers are making aren’t mere speculation but the result of quantitative analysis and insight based on the first factor listed here.

3) Long Term Thinking. This is a hallmark characteristic of a good investor, but it’s really difficult to live out when the market waters get choppy. Many a good investor has gotten spooked by a temporary bear market, forgetting that this is often the time to reinvest, or to hold the line, waiting for tides to turn as they inevitably do. By understanding and embodying long term thinking, MFS is able to make decisions based on perspective, not industry noise.

Check out this short video on what makes MFS successful:

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  1. Great idea with the short video. I prefer viewing something quickly rather then having to read all the time. 🙂

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