About First Community Trust

Investment Strategies &
Risk Management

My Account

Locations/Contact Us

Meet Our Officers

Services

Investment Management Living Trust Testamentary Trusts Estate Planning Conservatorships Charitable Trusts Why You Need a Will Selecting An Executor Pension and Profit Sharing Plans/IRA’s Cash Management Services Estate Planning Glossary

Calculators

Frequently Asked Questions

Current News and Events

Privacy Statement

Selecting an Investment Advisor

FCT’s Investment Philosophy

FCT’s Investment Strategies

Selecting an Investment Advisor

When you look for a trusted partner to manage your investments there are four major areas of importance:

Expertise

Depending on your experience with investments, you will want to consider and examine the background and expertise of the investment advisor you select. At First Community Trust our investment professionals with many years of investment expertise carefully craft a philosophy and strategies to meet your specific objectives.

Experience

Equally important is the experience of the investment manager you select. John J. Gonner, First Community Trust's Senior Vice President of Investments has many years of investment experience in both equity and fixed income investments. John is a Chartered Financial Analyst (CFA); a Certified Financial Planner (CFP); and a Certified Public Accountant (CPA).

This experience will provide you with the peace of mind knowing that your investment strategies will be professionally managed to obtain the results consistent with your needs.

Reputation

The professionals of First Community Trust have many, many years of trust, retirement and investment experience. Knowing that experienced personnel manage your funds will add to the peace of mind you will attain by selecting First Community Trust. We are always happy to provide names of current clients who will be happy to discuss how First Community Trust has served them.

Compatibility

Our goal is for you to have peace of mind. In choosing your investment partner you will find that we will listen to you and respond to your needs. Most important, you can call on us at any time since we are located right in your community.

Investment Philosophy

First Community Trust takes pride in the investment expertise offered to our clients. Our investment philosophy is simply stated, "To provide the best risk adjusted rate of return to our clients". We work with you to design an investment strategy to meet your needs. Our investment philosophy is based on minimizing risk while providing excellent investment returns.

Equity Investment Style

• Select stocks and funds with superior earnings growth at reasonable valuations.
• A preference for companies with above average profitability, leadership position in its business, strong balance sheet and evidence of sustained unit growth.
• Represent major components of the economy through diversification of industry mix.
• Stocks must be followed in the Value Line or Standard & Poors Universe and rated average or higher for safety.

Fixed Income Investment Style

• Emphasize safety of principal and liquidity. Bonds and bond funds must be rated "A" or higher.
• Manage the average maturity of the portfolio according to interest rate forecasts and the shape of the yield curve.
• Capitalize on the differential in yields among various asset classes.

Mutual Fund Investment Style

• Offer diversification through disciplined approach and utilization of highly rated mutual funds.
• Mutual funds must have a Morningstar rating of Three Stars or higher.
• Funds must have a three to five year track record.
  

Asset Allocation Investment Strategies

First Community Trust takes pride in the fact that we design an investment plan and strategy to meet each client’s needs and desires. Our hands on approach will provide our clients with the best risk adjusted rate of return. Generally speaking, First Community Trust will develop an investment strategy that would fall under one of five major classifications.

Fixed Income Only

Fixed Income Only has no equity exposure, distinguishing this approach from the Maximum Income strategy. The primary objective of this strategy is to protect the principal
value of a client’s portfolio, with an emphasis on high quality fixed income assets. Since this approach does not contain any equity exposure there is less principal fluctuation
and the chance of principal loss is minimized.

Maximum Income

Maximum Income or Capital Preservation has the primary objective of protecting the principal value of a client’s portfolio, with an emphasis on income producing assets of the safest and highest quality. This strategy is designed for a client who chooses to avoid short-term volatility and, therefore, will accept a lower average annual return in order to minimize the loss of principal and to avoid price fluctuations.

Income

The Income strategy is for investors who are willing to assume a moderate amount of risk and desire substantial current income. Modest risk of principal is achieved with a diversified income portfolio and some equity exposure. The equity focus will provide for steady dividends and potential for income to offset the effects of inflation. This type of portfolio has less exposure to inflation concerns, but increases the potential of risk due to interest rate changes and equity market fluctuations.

Income and Growth

Investors who pursue the Income and Growth, or Balanced strategy will be seeking to achieve a balance of current income and capital appreciation for future needs. The Income and Growth portfolio will use a combination of income and equity investments across the broadening universe of financial assets. Bond selections may include somewhat more risk than in the Income portfolio, and equity investments will seek to provide both dividends and capital appreciation. Volatility will be less than with the Growth strategy, with income yields slightly higher.

Growth

A Growth Strategy is designed to attain long-term growth of principal and moderate income. This type of investment portfolio is designed for the accumulation of wealth over a long-term investment horizon (generally 5 to 10 years), with little need for current income. A strategy will be developed with a diversified portfolio of equity investments across various equity sectors, including global and foreign corporations. The focus will be on funds and companies that have consistently outperformed their peers with regard to growth of revenue, earnings and market valuation. Dollar cost averaging can enhance this type of strategy, as the portfolio may experience price volatility.

Maximum Growth

This strategy is for investors who seek to achieve above average capital appreciation over a long-term time horizon (generally 10 years or more). This strategy will utilize a larger commitment to equity funds or individual equities paying higher price/earnings multiples and will have higher concentrated portfolios with larger and more frequent volatility. Dollar cost averaging may enhance long-term results and a higher turnover of stocks and funds should be expected.

FCT Model Portfolio Strategies

All categories will allow for significant client input before a decision is made regarding final asset allocation and implementation.