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Our Investment Philosophy

The portfolio management process of MFS is based upon a disciplined focus of our energies on the variables that we can control, variables that will have an effect on the long-term real life returns of the portfolio.

We believe that there are six crucial components to a successful investment strategy.  Three principles that are key in the belief system of the investor, and three essential practices that are carried out by MFS.

The first principle in the belief system of the investor is Faith in the Future.  The investor must believe that tomorrow will be better than today.  Our world and society are constantly advancing and improving each and every day.  For example, ten thousand people throughout the world are being elevated out of poverty every single day.  You will most likely not hear this from the media.  No matter what the news stations and media say, which traffic almost exclusively in negativity, the investor must believe that tomorrow we will live in a better world.  Without this faith, do not even attempt to invest your money in the market.

The second principle in the belief system of the investor is Patience.  The investor must believe that results do not happen overnight, but over periods of time.  As one great investor, Warren Buffett, says “The stock market is a highly efficient mechanism for the transfer of wealth from the impatient to the patient”.

The third principle in the belief system of the investor is Discipline.  Staying the course and continuing to do the right thing is discipline.  It is almost never easy to stay disciplined.  Sticking with your investment plan is a common form of discipline, but is all too rare.  The investor must not be distracted by what is hot today, but rather what has most reliably worked over time. 

The first of the three fundamental portfolio practices is Asset Allocation.  Asset Allocation is the long term mix of stocks, alternative investments, bonds and cash.  The financial advisors at MFS will help you decide and formulate the appropriate asset allocation model for each goal, purpose, and time segment of your life.

The second of the three fundamental portfolio practices is Diversification. Diversification is the spreading of risk and return within an asset class.  The Investment Committee at MFS realizes that no one will ever know what segments of the market will outperform the rest of the market over any period of time.  Therefore, broad diversification will capture the upside of all asset classes over time, while simultaneously decreasing volatility at any given moment.

The third of the three fundamental portfolio practices is Rebalancing.  Rebalancing is returning the portfolio to its target diversification.  This will force the sale of high price, low-value, hot sectors to redeployment of those same funds to low price, high value, and out-of-favor sectors.  We force the selling of “high” and the buying of “low”.  This is precisely the opposite of what most investors actually do.

The advisors at MFS are here to educate you on the three principles that every investor must have, and to provide the needed practices for a well-managed portfolio.  However, our most important job as your Financial Advisor is to help you stay the course by counseling you when the three essential principles of any successful investor are being tested.  We will be there to encourage your faith in the future, solidify your patience in the process, and promote the discipline needed to reach your goals.

Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal. Diversification and asset allocation strategies do not assure profit or protect against loss.