By: Fred Palmliden
First Farmers’ Wealth Management and Trust Services professionals have served individuals and families since its founding in 1969. Continued growth for the last half century has positioned us as one of the largest community bank Trust Departments in the southeast with almost $6 billion in assets under supervision. What makes First Farmers different is the culture of service, not sales, which strengthens our ability to provide financial solutions grounded in unbiased advice.
The focus is on providing high quality strategies to grow wealth over time while keeping costs as low as possible. Listening to the client is the first step in designing a solution that fits the client’s risk tolerance. Tailored solutions are then constructed to fit a client’s unique needs and risk return objectives. As a fiduciary, we avoid any investment products that would compensate us. Instead, we rely on a proven investment approach that is aligned with the clients’ best interests. We want our clients to be successful at growing wealth, because if they are successful, we are as well.
The investment process we utilize is disciplined, systematic, and adaptive. Disciplined, since investment decisions are based on data and sound judgment instead of emotions or the latest fad. A well-thought-out plan helps our clients stay the course when volatility picks up, creating an all-weather-type portfolio. Systematic, meaning that we look at all the different corners of the market and we strive to find the best solution for each section at low costs. The result is a globally diversified portfolio with investment solutions that have a strong track record of outperformance at low fees. Lastly, the investment process is adaptive with a mix of strategic and tactical asset allocations. While the core tends to be well anchored, the investment portfolio is not static. Adjustments are made along the way depending on the current investment environment and perceived future developments.
Following this investment philosophy and approach results in a custom investment portfolio that participates well on the upside but holds up especially well in times of turmoil. Since we tend to be more conservative, portfolio performance may trail the major indices slightly when the market is rallying, however, we typically don’t give up as much on the way down. Having an attractive balance between upside and downside capture has resulted in strong risk-adjusted returns and has been key to our history of outperformance over time.
The results speak for themselves. While we were not immune to the weakness in the market in 2022, thanks to our proven investment approach, the damage was greatly limited for our clients. Essentially, we played defense all year and were able to outperform the broader market. Our outperformance came from three main strategies: leaning on Value versus Growth on the equity side, keeping duration short on the fixed income side, and introducing a third sleeve with liquid alternatives.
The investment environment is always shifting and strategies that worked well one year may not necessarily be appropriate going forward. In 2023, a more balanced approach between Value and Growth has been targeted as well as an increased exposure to international equity and an increase in bond duration, among other adjustments. While past performance is no guarantee of future results, we are confident in our process and strongly believe that we can effectively help our clients navigate the challenges that lie ahead. It has been a privilege to serve our clients for the past 54 years and make an impact not only on their lives but on the lives of future generations.
