1. STAYING CALM WHEN THE MARKET GOES WILD
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STAYING CALM WHEN THE MARKET GOES WILD
I’d like to begin by asking how many of you are worried about what’s happening in the stock market? Taxes! Healthcare costs! Housing costs! Mortgages! Global unrest! Recession! Inflation, etc. Every day it seems there’s something new to worry about. The thing is, there are plenty of ways to cope with today’s markets. What I’d like you all to do now is to take a deep breath, exhale, and follow along with me as I give you some perspective and some tips for dealing with today’s market.

2. IMPORTANT INFORMATION
The views expressed in this presentation are those of MFS and are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any other MFS investment product.
MFS may have sponsored this seminar by paying for all or a portion of the associated costs. Such sponsorship may create a conflict of interest to the extent that the broker dealer’s financial advisor considers the sponsorship when rendering advice to customers.
Past performance is no guarantee of future results. No forecasts can be guaranteed.
The views expressed in this presentation are those of MFS and are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any other MFS investment product.
MFS may have sponsored this seminar by paying for all or a portion of the associated costs. Such sponsorship may create a conflict of interest to the extent that the broker dealer’s financial advisor considers the sponsorship when rendering advice to customers.
Past performance is no guarantee of future results. No forecasts can be guaranteed.

3. OVER THE LONG TERM, STOCKS HAVE LED THE WAY Growth of hypothetical $10,000 investments over three decades
You’ve heard it before, but I think this is still probably the most important concept in investing: time is one of an investor’s greatest allies. As you can see in the chart, since 1986, stock returns, as represented by the Standard & Poor’s 500 Stock Index (the S&P 500), have been positive and have outpaced long-term government bonds, Treasury bills, and inflation. Investing is the best way we know of to help make your money work for you. Do keep in mind, that past performance is no guarantee of future results.
Let’s look at this graph – going into the new century the market produced strong returns driven by the technology sector. However, the early 2000s saw that technology bubble burst and market returns plummet. The market rallied again in Through 2008, however, the market’s returns were seriously impacted by a housing credit crunch and that continued on into What should an investor have done in response to those dynamic and difficult market conditions?
In our opinion, the best response may have been to do nothing — if you’re properly prepared with a long-term plan. To help you create or update that plan and take market volatility in stride, here are some facts and a few opinions you may want to consider.
1 Sources: SPAR, FactSet Research Systems Inc. For illustrative purposes only. Results are not intended to represent the future performance of any MFS® product. Stocks are represented by the Standard & Poor’s 500 Stock Index (S&P 500), which measures the broad U.S. stock market. Bonds reflect performance of the Bloomberg Barclays U.S. Aggregate Bond Index, which measures the U.S. bond market. U.S. Treasury bills are represented by the Citigroup Three-month Treasury Bill Index. The principal value and interest on Treasury securities are guaranteed by the U.S. government if held to maturity. Inflation is measured by the Consumer Price Index, a measure of inflation, as reported by the U.S. Bureau of Labor Statistics. These indices represent asset types that are subject to risk, including loss of principal. Index performance does not include any investment related fees or expenses. It is not possible to invest directly in an index.
The value of equity investments are more volatile than the other securities. In addition, long term Government Bonds and the Treasury Bills are guaranteed as to the timely payment of interest.  

4. BEAR MARKETS HAVE NOT STOPPED STOCKS Tracking the S&P 500 Index (closing values 1987 – 2016)
As the chart shows, there have been a number of bear markets over the past 30 years. But their length pales in comparison to the up periods between the bad times. Looking at it with a longer view, overall historical returns have been strong. Optimistic investors often refer to these periods of volatility as “buying opportunities,” others think of these periods as “white sales.” Yet some find it difficult to maintain that perspective while living through a bear market.
Housing, mortgages, sub-prime lending, deficits, and foreclosures headlined the market’s declines in 2007, 2008, and 2009 and dominated the news media. Yet, in our view, there are still attractive investment opportunities in other areas of the stock and bond markets, both in the United States and overseas. It has always been my view that one of the best strategies to help reduce market volatility is to invest in stocks and bonds of fundamentally well-run companies selling at reasonable prices in good sectors and strong industries in the U.S. and overseas. That takes us right to the next graph.
* Bear market returns are cumulative for each period.
Source: Morningstar, Inc. For illustrative purposes only. Results are not intended to represent the future performance of any MFS product. A bear market is defined
as a peak-to-trough decline of 20% or more over a prolonged period. Bear markets are calculated based on month-to-month changes in the S&P 500. A correction
is defined as a peak-to-trough decline of 10% or more but less than 20% over a relatively short period.
Past performance is no guarantee of future results.

5. mfsp-staycalm-pres-3/11 4
A TALE OF THREE INVESTORS Hypothetical $1,000 annual investment from 1/1/97 to 12/31/16
Investor #2
Investor #1
Investor #3
ADR refers to a practice of Allocate, Diversify, and Rebalance
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These three investors used three different hypothetical strategies. Each invested $20,000 over a 20-year period ($1,000 per year). While these returns cannot guarantee future results, there was a clear winner among these three investors.
Chasing performance - The first scenario, “chasing performance,” illustrates a hypothetical investment of $1,000 at the end of each year in the best-performing market segment of that year.
Hoping for a rebound - You follow the same scenario as “chasing performance,” but this time you’re investing in each previous year’s worst-performing market segment.
Allocating, diversifying and rebalancing- You diversify your $1,000 by investing equally in 8 different market segments each year for 20 years. At the end of every quarter, you rebalance your portfolio’s assets so that they stay equally distributed among the eight market segments. 5
Source: SPAR. Hypothetical examples are for illustrative purposes only and are not intended to represent the future performance of any MFS® product.
For purposes of this comparison, we have divided the overall market into the following eight indices — the Barclays U.S. Aggregate Bond Index measures the U.S. bond market. The MSCI EAFE Index measure the non-U.S. stock market. The Russell 1000 Growth Index measures large-cap U.S. growth stocks. The Russell 1000 Value Index measures large-cap U.S. value stocks. The Russell 2500 Index measures U.S. small- and mid-cap stocks. The FTSE NAREIT All REITs Total Return Index tracks the performance of commercial real estate across the U.S. economy. The JPMorgan Global Government Bond Index (Unhedged) measures government bond markets around the world. The Bloomberg Commodity Index is composed of futures contracts on physical commodities. Index performance does not reflect the deduction of any investment-related fees and expenses. It is not possible to invest directly in an index.
Use of a systematic investing program does not guarantee a profit or protect against a loss in declining markets. You should consider your ability to continue to invest through periods of low prices.
mfsp-staycalm-pres-3/

6. "OUR FAVORITE HOLDING PERIOD IS FOREVER" - Warren Buffet
Shown is a hypothetical during a time when the market experienced a prolonged downturn (1973 – 1974). If you had pulled out of the market after those tough two years instead of staying the course, you would have missed out on the upturn when it finally came. Of course, past performance is no guarantee of future results, but this is one history lesson that could be very valuable in today’s investing environment.
Data source: Morningstar.
©2017 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar; (2) may not be copied; and (3) is not
warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible or any damages or losses arising from any use of this information. The data is not intended to represent the performance of any MFS product. Keep in mind that all investments carry a certain amount of risk including the possible loss of the principal amount invested.
The Standard & Poor’s 500 Stock Index measures the broad U.S. stock market. Index performance does not include any investment-related fees or expenses.
It is not possible to invest directly in an index.

7. MOVING TO CASH DOESN'T NECESSARILY HELP
Hypothetical long-term results if an investor moved to cash
Let’s assume that when your original investment dropped to $6,273, you removed it from the market and reinvested it in a 6-month CD at the average 9.90% for this period. CDs offer a fixed rate of return. The are also FDIC insured and
have principal and interest guarantees but offer no opportunity for growth of capital or income.
Data source: Morningstar. The six-month CD rate is derived from secondary-market six-month CD rates published by the Federal Reserve Bank.
The value of equity investments are more volatile than the other securities. CDs offer a fixed rate of return . Also, they are FDIC insured and have principal and interest guarantees.
Hypothetical examples are for illustrative purposes only and are not intended to represent the future performance of any MFS product.

8. Hypothetical long-term results if an investor stayed with stocks
STAYING THE COURSE
Hypothetical long-term results if an investor stayed with stocks
But what if you had kept your $6,273 invested in the S&P 500 instead of investing in a CD? Or even had gone a step further and set up a systematic investment plan adding $50 per month, starting on
1/1/1975, for the next 10 years?
The use of a systematic investment plan does not guarantee a profit or protect against a loss in declining markets. You should consider your financial ability to continue to invest through periods of low prices.
Data source: Morningstar.
Index performance does not include any investment related fees or expenses. It is not possible to invest directly in an index.
Stock markets and investments in individual stocks are volatile and can decline significantly in response to issuer, market, economic, industry, political, regulatory, geopolitical, and other conditions.
Hypothetical examples are for illustrative purposes only and are not intended to represent the future performance of any MFS product.

9. INVESTING ACROSS MULTIPLE ASSET CLASSES Asset class annual returns, best to worst, 2007 – 2016
Just as no one can predict market peaks and troughs, it’s a fact that nobody knows which area of the market will be the next to outperform — small-, mid-, or large-cap stocks; growth or value offerings; U. S. or international markets; or stocks or bonds, for example. Yet many investors are tempted to simply chase performance by moving money into whatever asset class appears to be outperforming at the moment. The problem with this approach is that by the time a particular area is generally recognized as “hot,” you may have already missed some of the best performance. Let’s take a look at our chart here. The patchwork quilt that you see shows the leading asset classes for each year for the past 10 years.
Going into 2008, an investor looking only at recent performance might have favored Commodities. Commodities dropped to the middle of the pack for and then ran at the bottom from
Most investors would have probably given up at that time, but they began performing well again in Large-cap growth had been near the top from , only to drop to the middle last year.…And nobody knows what will happen next. Past performance is truly no guarantee of future results.
In this illustration, the gray boxes, which represent a diversified portfolio, had a much smoother ride. The dips weren’t nearly as deep, even though the highs weren’t as high. Do keep in mind that even a diversified portfolio can lose money, and that’s why we strongly encourage you to work closely with a financial advisor who can help you build a diversified portfolio to fit your needs and goals and explain the risks associated with investing. Keep in mind, no investment strategy can guarantee a profit or protect against a loss.
Source: SPAR, FactSet Research Systems Inc. For illustrative purposes only. Results are not intended to represent the future performance of any MFS product. 2 Bloomberg Commodity Index is composed of futures contracts on physical commodities. It is not possible to invest directly in an index. 3 Russell 1000® Growth Index measures large-cap U.S. growth stocks. 4 MSCI EAFE Index measures the non-U.S. stock market. 5 JPMorgan Global Government Bond Index (Unhedged) measures government bond markets around the world. Index performance does not include any investment-related fees or expenses.6 Bloomberg Barclays U.S. Aggregate Bond Index measures the U.S. bond market. 7 Diversified Portfolio is made up of equal allocations of all segments disclosed herein, excluding cash. 8 Citigroup 3-month T-bill Index is derived from secondary market Treasury bill rates published by the Federal Reserve Bank.9 Russell 2500 Index measures small- and mid-cap U.S. stocks. 10 Russell 1000® Value Index measures large-cap U.S. value stocks. 11 FTSE NAREIT All REITs Total Return Index tracks the performance of commercial real estate across the U.S. economy. It is not possible to invest directly in an index.

10. ASSET CLASS RISK CONSIDERATIONS
Growth stocks Investments in growth companies can be more sensitive to the company’s earnings and more volatile than the stock market in general. Value stocks Investments in value companies can continue to be undervalued for long periods of time and be more volatile than the stock market in general. International stocks Investments in foreign markets can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical, or other conditions. Small-/Mid-cap stocks Investments in small and mid-cap companies can be more volatile than investments in larger companies. Emerging Markets Emerging markets can have less market structure, depth, and regulatory oversight and greater political, social, and economic instability than developed markets. REITs Real estate-related investments can be very volatile because of general, regional, and local economic conditions, interest rates, property tax rates and values, zoning laws, regulations, natural disasters, cash flows, and other factors.
Let’s take a moment to talk about some of those risks. [Read slide.]

11. ASSET CLASS RISK CONSIDERATIONS
Bonds Investments in debt instruments may decline in value as the result of declines in the credit quality of the issuer, borrower, counterparty, or other entity responsible for payment, underlying collateral, or changes in economic, political, issuer-specific, or other conditions. Certain types of debt instruments can be more sensitive to these factors and therefore more volatile. In addition, debt instruments entail interest rate risk (as interest rates rise, prices usually fall), therefore the Fund's share price may decline during rising rates. Funds that consist of debt instruments with longer durations are generally more sensitive to a rise in interest rates than those with shorter durations. At times, and particularly during periods of market turmoil, all or a large portion of segments of the market may not have an active trading market. As a result, it may be difficult to value these investments and it may not be possible to sell a particular investment or type of investment at any particular time or at an acceptable price. The price of an instrument trading at a negative interest rate responds to interest rate changes like other debt instruments; however, an instrument purchased at a negative interest rate is expected to produce a negative return if held to maturity.
Commodities 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, 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.
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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12. PLANNING AND PREPARATION ARE KEY
If you have not already done so, we encourage you to:
Discuss these facts and opinions with your investment professional
Factor them into your long-range financial plans
So what have we learned today? Bear markets happen but they also end. How you react to them depends on your long-term view and your short and long-term financial plans. I can’t stress enough how important it is to work with an advisor who understands you and your financial needs. The more turbulent the markets, the greater the need for professional guidance to help temper our emotional response to events as they unfold.
I hope that this presentation has been helpful in calming some of your fears about today’s markets and giving you ideas for moving ahead with your investment plans. Based on what we’ve talked about today, I would like the opportunity to discuss today’s markets with you and then factor them into your long-range financial plans. Hopefully, the next time the markets appear to be going wild, you’ll feel confident enough in your plan to just sit back.
[Optional, if the audience is comprised of prospects rather than clients]: One other take-away I’d like to leave with you – work with a professional investment advisor. Clearly, I’d like that person to be me, but here’s why so many people do work with professionals. They don’t want to worry about their investments every time the market goes down and they don’t want to make a hobby or a second profession out of investing. They simply want their money to work for them so they have a better likelihood of working toward achieving their investment goals.
Thank you for your time and attention. Now let’s take some questions!
There is no guarantee that these investment strategies will work under all market conditions, and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market.
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.

13. Thank you!
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