Do You Need Active Investment Management?

Just like anything in the investment industry, there are winners and there are losers. This is no more apparent than when looking at the field of active investment managers. These are the guys who say “Yes, buy this” or “No, don’t buy that”. It may sound simple, but there’s a LOT of work that goes into picking stocks that will make you a lot of money. And they’ve got to pick a lot of them. If you were just to invest in one or two stocks, you’d stand a great chance of losing it all. But by investing in lots, you stand a high chance of diluting your big wins with other picks that underperform. Do you see the problem? Investment management is a tricky game, and lots of managers fail to get their clients returns that beat the market.

But there are some that succeed, obviously. Warren Buffett has one such fund, which SLAUGHTERS the market year after year. It’s not luck. It’s about insight, experience, and timing. In order to achieve this, you’ve got to have a great team, a team like the one at MFS. MFS is one such investment management firm who beat the market most of the time. That’s great, because that’s what you are paying them for. But if it’s so hard to do, how does MFS do it? They explain that they have a three-tiered approach that works really well for them.

  • MFS cultivates a global perspective. MFS employs analysts all over the world. Managers who don’t tend to be America Myopic. They are most aware of American financial events, when the US is just a tiny fraction of the world population. By seeing world events for what they are MFS is able to give you a much more nuanced decision making toolkit than those who wear Western-tinted glasses.
  • Risk Management. MFS doesn’t act unless you are going to get compensated.
  • Long Term Thinking. MFS knows when to wait, contrary to a lot of industry noise calling for immediate action all the time.

 

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  1. Kathy says:

    Yes, we do have an active investment manager……us! No one cares about our money more than us and we do all of our own research, picking and trading ourselves. We actually don’t really trade because once we buy a stock or bond, we tend to hold it for years.

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