Looking ahead, the investing landscape seems more difficult, especially after three robust years of equity returns. More capital preservation strategies should be considered. At the same time, corporate earnings are still growing. Further, the long-term trend for stocks is up and to the right.
What is a person who doesn't want to actively manage their money, but who also wants to hedge against downside risk to do? Find an investing platform that does these things.
In 2021, I was introduced to Titan Global Capital Management (Titan) by an old VC friend of mine, Mark G. He was an early investor in Personal Capital and acted as their CMO for several years. Mark and I actually overlapped at Personal Capital for a couple of years while I did some consulting.
Given Titan was founded only three years earlier in February 2018, I decided to see how they'd do for another year before sharing their work. I'm happy to say they've grown tremendously. Further, I think the timing is right to talk about their product now as the markets get more volatile.
Titan is an investment platform bringing premier, active investment management to everyone. Here's Titan sharing their value proposition in their own words.
Why Does Titan Exist?
Wealth is crucial to our health and security. But we haven’t been properly taught how to grow our wealth or given tools to do so. We’ve been forced to choose between subpar options: unaffordable old-school wealth management, too-conservative mutual funds / ETFs, and uniformed “do it yourself” investing.
Managing and growing your wealth is a full-time job. With Titan, our experienced investment team does that job for you.
Founding Team / Story
The world tells the average retail investor to “run along and go put your money in an ETF.” But for the ultra-wealthy, the equation completely flips: “Welcome to first class. Which specialty funds would you like?” This didn’t sit right with Titan’s founders, so they set out to level the playing field.
Co-Founder and Co-CEO Clay Gardner spent the majority of his career as an investor at multi-billion dollar hedge funds, applying the long-term, quality-oriented approach that Titan uses today.
Co-Founder and Co-CEO Joe Percoco has a well-developed perspective of today’s financial and technology ecosystems, spending time investing at Goldman Sachs and a long/short equity hedge fund, as well as McKinsey & Co. in their technology practice.
Co-Founder and CTO Max Bernardy was a senior engineer and early employee at a hedge fund and several early-stage technology companies.
What Does Titan Do?
Titan is the new-guard investment platform bringing premier, active investment management to all.
We are the first Direct-To-Consumer, mobile-first investment platform where everyday investors, irrespective of wealth, can have their capital actively managed by 10+ investment experts in long-term strategies. We also just launched the first actively managed crypto portfolio available to US investors (except in NY).
Through the Titan app, investors and potential investors have courtside seats to the strategy, research, and commentary of Titan’s Investment Management team. The insights are accessible for clients from all levels of financial knowledge.
Investing with Titan not only grows clients’ long-term wealth, but transforms them into the smartest investors they’ve ever been. Here’s a recent portfolio update we sent to our clients. And here's one of our daily “Three Things” email highlighting important moves in the market (some of which impact their portfolios).
Titan offers all U.S. investors access to four outstanding actively-managed investment products: Flagship, Opportunities, Offshore, and Crypto.
Titan’s Goals
1. Grow your capital long-term. Titan aims to outperform the market, not track it, in order to double your money every 5-7 years.
2. Education. Titan can enable you to be the smartest investor you’ve ever been by giving you court-side seats to the strategy, research, and commentary of our internal Investment Management team. If you enjoy learning about individual companies and general market research, you'll enjoy Titan's insights.
From instant investing to portfolio manager access, we provide access to many cutting-edge features that other firms do not, free of charge.
Accolades + Stats
In under three years, Titan has grown to $750 million AUM and 35,000+ clients.
Titan has raised $75 million to date at a valuation of $450 million from premier venture capital firms. They include Andreessen Horowitz, General Catalyst, Sound Ventures, and BoxGroup. In addition, we have raised capital from people such as Will Smith, Odell Beckham Jr., Kevin Durant, and Jared Leto.
Titan was also ranked the #1 Robo-Advisor by US News in 2020. In addition, Titan was included on the Forbes’ Next Billion Dollar Startups list in 2021.
Titan’s Investment Strategies / Product Offerings
1) Flagship is our large-cap US growth strategy made up of high-quality, big-name companies that they believe can compound capital in excess of the S&P 500. The portfolio contains 15-25 stocks with an average market cap of nearly $600 billion. Flagship has an annualized return of 20.4% (after fees) since inception (February 2018).
2) Opportunities is Titan’s small/mid-cap US growth strategy made up of companies that they believe can grow at exceptional rates and become the next crop of rising stars. The portfolio contains 15-25 stocks with an average market cap of $13 billion. Impressively, Opportunities has an annualized return of 61.4% (after fees) since inception (August 2020).
3) Offshore is Titan’s international growth strategy made up of some of the world’s best businesses in emerging and developed markets from China to Latin America and beyond. The portfolio contains 15-25 stocks with an average market cap of $175 billion. Offshore has an annualized return of -8.8% since inception (after fees), but was just recently created in April 2021.
4) Crypto is the newest addition to Titan, and is the first actively managed portfolio of crypto-assets made available to all investors that Titan believes are positioned for outstanding long-term returns with minimal correlation to equities and with attractive hedging qualities. The portfolio typically holds around 5-10 cryptoassets, and has an annualized return of 329.8% (after fees) since inception in August 2021.
Recommended Portfolio Mix
Depending on how much money you have invested with Titan as well as your preferred investing style and risk tolerance (aggressive, moderate, or conservative), Titan will provide a custom, recommended % allocation to each of their portfolios.
Risk Tolerance + Hedging By Titan
There are multiple ways that Titan provides downside protection to their clients. The primary way is by including a hedge, a holding that bets against the market, in their portfolio. The size of your hedge will depend on your preferred investing style and risk tolerance – aggressive, moderate, or conservative.
When the Titan investment team does not believe their portfolios are undergoing or have high risk of undergoing an extended downturn:
- 0% of portfolio value is hedged if your preferred investing style is “aggressive”
- 5% of portfolio value is hedged if your preferred investing style is “moderate”
- 10% of portfolio value is hedged if your preferred investing style is “conservative”
When the Titan investment team does believe their portfolios are undergoing or have high risk of undergoing an extended downturn:
- At least 5% of portfolio value is hedged if your preferred investing style is “aggressive”
- At least 10% of portfolio value is hedged if your preferred investing style is “moderate”
- At least 20% of portfolio value is hedged if your preferred investing style is “conservative”
During times of especially uncertain market volatility, the Titan investment team can also seek to preserve client capital and minimize risk by reducing equity exposure and increasing cash holdings. This cash reserve also allows Titan to make opportunistic investments when company valuations decline to attractive levels.
Sam's note: Titan's ability to offer hedged portfolios at a lower cost in this environment to be attractive. It is a unique investment offering I haven't seen elsewhere. Since 2012, I've invested in structured notes to provide for downside protection and for potential leveraged upside. If I hadn't invested in hedged investments, I wouldn't have invested as much money as I have into equities.
How Titan Works
1. Deposit money into Titan via the app. Titan is 100% mobile-only.
2. Select a portfolio or multiple (Flagship, Opportunities, Offshore, and Crypto) for your money to be invested into. Titan will recommend a portfolio mix based on your preferred investing style, risk tolerance, and the amount that you’ve deposited. Your job is now done.
3. The Titan team buys the stocks in your selected portfolio. You now own fractional shares of the stocks or assets that Titan’s analyst team has selected for the portfolio.
4. From there, Titan will make updates by buying/selling stocks in the portfolios while explaining every move Titan makes with consistent written, audio, and video updates.
Below is a sample of a recap we send to investors each day on our app. We specifically highlight notable events that impact client holdings so clients can always stay informed.
How Titan Differs From Other Modern Investing Products
There are a few different behaviors that consumers in today’s investing market engage in. The first is “set and forget,” when people invest in robo-advisors with general portfolios that generally track the market. These consumers want everything done for them and don’t want to engage with their investing experience much at all.
Another behavior is “do it yourself,” where you use an investing app to buy and sell all of your own stocks and assets. Managing existing positions and researching new ones requires a lot of time, energy, and skill. This is an activity most of us don’t have enough time to do successfully.
Enter Titan. When you become a client of Titan, our team of investment analysts will work to grow your capital in our strategies that aim to outperform the market in the long term, not track it. Additionally, Titan gives you insights to all of our investment decisions and market moves relevant to your portfolio.
Pricing
You can start investing with Titan for $5/month (if you have less than $10,000 in deposits); that’s the price of a cup of coffee in New York City. Once you invest $10,000 or more, it switches over to a flat 1% annual advisory fee (compared to 2% and 20% of profits for the average hedge fund).
Low Minimums and No Lockups
All you need is $100 (our minimum deposit) to get started, and there are never any lockups. Take your money out anytime.
Referral Program
Titan also has a robust referral program. In the Titan app, you can easily invite others to sign up for a Titan account by sending them an email, text, or social invitation.
For each eligible referral that you complete, you will win an entire portfolio of Titan stocks (or crypto) that could be worth up to $10,000. At a minimum, all portfolios rewarded will be worth at least $25. In addition, each person that you refer will automatically receive a 100-day free trial to Titan.
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Thanks, Sam! Had not heard of this. Particularly interested in the the crypto product. I made it my resolution this year to understand blockchain/crypto. After two weeks I can see how it is the future, but picking the winners is going to be tough.
Thanks also for writing about fundrise. I just made my first deposit with them.
It sounds intriguing, but I’m always wary of places that promise to beat the market AND provide downside hedging. Not only does it seem too good to be true, but it also seems to pander to the exact type of stuff people are conditioned to want to hear. Why, exactly, do we want to beat the market again? I suppose it’s human nature to want to maximize returns, but if you could just track the historical market you’re going to double your money roughly every 7 years. It’s a lot to ask for more than that, and if you’re properly planning and investing you shouldn’t need more than that anyway. More would always be nice but if I could just return market average from here on forward I would be more than set.
The downside hedging is certainly more intriguing to me, although not particularly applicable to me at this age given that retirement is still a ways off. I will definitely keep tab on this though to see, as services like this (if they work as advertised) could become appealing down the road as retirement nears.
Thanks! Giving this a go.
Also enjoying Fundrise.
Hey Sam, thanks for sharing! I just sold some stocks today so will transfer a bit of money to play with. Signing up now! I am interested in the opportunities and crypto funds.
I like to invest in listed hedge funds, private equity etc. For example Pershing Square Holdings (PSH.L). This might be problematic for US investors who aren’t accredited? I don’t know….
Bill Ackman’s fund? Really? Ok.
Interesting offering.. thanks for writing about it, Sam!
Still trying to get my head around what this is about, but this recent commentary they published struck me –
https://www.titan.com/research/2021/11/05/open-houses-closing-down
“But we believe the near-term challenges facing housing are considerable. The hardest days may still be ahead.”
Sam – this is the exact opposite of your bullishness on housing!!
https://www.financialsamurai.com/2022-housing-market-forecast/
“2022 Housing Market Forecast: Another Boom Year”
I don’t want to pull this particular Titan commentary out of context – it’s exiting a few select positions exposed to real estate – but it feels from looking at the website that their entire strategy is to pick a “few” (10? 20?) positions for every portfolio, so it probably matters more each position they enter and exit vs. say, a more conventional money manager’s buy-a-bunch-of-ETFs strategy
Interesting! But their commentary was about selling Redfin 2 months ago, which actually was a good call.
The question is, what now? Time will tell.
Not just Redfin.. their more recent commentary also exits FTDR borne from the same thesis
https://www.titan.com/research/2021/12/06/titan-opportunities-trade-update-weve-bought-iqv-sold-rdfn-and-ftdr-IQV-WSC-SSNC
One could still believe in real estate upside in 2022, and *also* believe in Titan’s approach – there are all kinds of ways to rationalize the two things. And as you said, time will tell.
It’s interesting that Titan explicitly aims to beat the S&P 500 (their Flagship strategy) with a basket of 15-25 stocks, so – almost definitionally – any investor needs to be ready for more such stock-specific calls and (perhaps) more volatility.
All in, certainly a good, additive idea to consider within one’s portfolio. Thanks again for bringing it up.
Good stuff. I like how Titan is actively putting out investment content and explaining why they are investing the way they are. For the money I farm out to actively managed funds, having this type of insight and clarity is really nice.
I think you are better just investing in the whole market and forgetting about it. From a diversification, expense and tax standpoint you will always beat these managed from funds over the long run. They prey on people always wanting something now or even a small chance of beating the market. Won’t happen. Good luck though. Consider it entertainment. $10k invested doesn’t even move the needle either way.
You can certainly invest much more than $10,000. It’s just a 1% flat fee on AUM.
Based on your article and a little more reading I gave it a go last night.
I’ve overthought and passed on way too many good simple moves and I’m starting with the $10K (more on why below) and seeing how it goes.
I still bemoan for instance buying my Diamond Multimedia Riva 128 video card (NVIDIA’s first gen product into 3d) and going this is a real threat to 3DFX (which required daughter cards) maybe I should put $5K in it?! I passed and now it would have been $2.5M. Instead I put that money into VFINX in a rIRA. Sound BUT I certainly can’t retire on that.
As some of you maybe know, most proprietary products require the cost of admission to see the nuts and bolts, and even then sometimes you pop the hood and there’s a huge piece of decorative plastic and they won’t let you see shop manual or talk to the engineer.
In most cases, the cost of entry for these products that I’ve been pitched has been ENORMOUS and I think this is where this product UNIQUELY differs. That I think is the biggest takeaway so far.
For INSTANCE, I was pitched private banking last year and eventually after months of sales and marketing and seeing what they had planned I pulled back. There was no dipping a toe in, there was no in addition to what you are doing thing, it was 100% of all investable assets had to be with the provider and too bad too sad if you 100’s of K of taxes due to it. That provider wasn’t mean about it, they just did what they did and that’s why some of the features they had existed. That private banking provider did concede what I was doing on my own was already more sophisticated from a trading/investing stand point BUT I also had to acknowledge some of the things they could do to react and find opportunities and features on top of the investments like lines of credit I couldn’t do so simply on my own or at all.
So anyway given it feels so much like a top of a market I’ve been kinda looking at a vehicle focused more on the constant trading, adjusting, and hedging side of things for at least part of my portfolio.
With that said, here’s my initial experience:
Signup process, funding, etc was straightforward. I’m still waiting on some info on ownership since you open the account as an individual, not a trust, not joint. I think they need to add that up front because with any serious amount of investment the risk of potential gaps if some disaster occurred that next day is really not prudent to take when you spent all the time and effort putting those legal structures together in the first place.
There are four funds for lack of a better term, but to me really categories. You see the holdings of the fund once money is invested but I’m not sure Titan would be so keen on having me publish this, plus I just “paid” $10k to see this. Since they don’t show you what that is ahead of time (before you send money) I’m guessing they consider their holdings and allocation mix proprietary and obviously it probably changes and so if they published this you could just run the entire investment on your own for “free”.
Two of the funds: Opportunities and Offshore are not available unless you commit to the $10K amount and of course because I wanted to see under the hood so that’s what made the the price of entry for me $10K.
What’s not clear (yet) to me is depending on what you answer about timelines, aggressiveness, risks, is if the holdings of the funds (categories really) is different or if the allocations of the holdings is maybe different. In my case, each fund holds roughly 12-18 holdings including the hedge holding.
What I’ll say is what the holdings are is not something that was like “wow eureka they found the next Amazon!”
I’ve been investing for well over 20 years in various personal capacity for myself and family, most of it has been long term index based which has worked out great but it hasn’t been quit your job, gulfstream, life changing either. See my first example.
That said, I dabbled in trading as trading became effectively transaction fee free in the past few years, and to really trade CORRECTLY to produce gains, tax loss harvest, etc IS NOT THAT simple as many of you know. It really needs to be your job and you need corresponding real world hours and effort to do it well.
As “Financial Samurai” says, you may very well find yourself being at a coffee shop or Costco or celebrating a birthday or whatever it is when you really needed to be at the terminal hitting the button and making the most of it! So that’s what I’m hoping this platform does very actively for me and how I intend to use it as a kicker to what I’m already doing.
I’ll follow up in a few months if someone nudges me with a reply to this comment.
I use Personal Capital and 2021 returns were about 11% in their blended aggressive portfolio. I would have doubled my returns simply investing in SPY or QQQ. I brought up concerns there, but they just told me to stick to the plan essentially since large caps won’t outperform small & mid caps every year…. Not sure what to do. Will stick with it for now I suppose
Small cap/value has outperformed large, historically. Just saying.
Ask me about it. Very disappointed in Personal Capital returns for both 2021 and 3-year returns (that’s as long as I’ve been with them in an actively managed portfolio). 2021 returns lagged S&P500 by 800 bps (lagged Blended index by 200 bps) and 3-year lagged by over 3300 bps (lagged Blended index by 500 bps)!! This is in an aggressive tolerance portfolio. Anytime I talk with them they say “just stick to the plan”. I mean that’s fine, but I just don’t want to wake up at 50 having paid a decade of portfolio managed fees only to lag the S&P by a ridiculous amount, when I could’ve arguably come wayyyy ahead by passive index investing. I’m thinking 2022, with its rocky start, may be a good test of their equal weighting strategy. If they underperform again, I’m bailing, and I suppose, so are a bunch of others.
Sounds like my experience investing in a target date fund that has a 2035 target. But at least you were still up 20%.
Agreed. I’ll probably keep what I have with them and find an alternative firm. If they continue to drastically underperform I’ll be pulling everything. They initially showed me charts of their aggressive portfolio overlayed against the S&P 5 and claimed to have beaten it over the long term. Naively I moved ahead without really doing enough due diligence.
Great find! I don’t know any other investment managers who offer hedged portfolios at this price either. Their crypto offering is intriguing too.
I’m happily taking down risk and hedging after being up more than 100% since Jan 1, 2020. These returns are not sustainable.
I don’t think the S&P 500 or NASDAQ returns are sustainable either as written in my 2022 stock market forecast.
Having some downside protection feels VERY comforting in this market. Sort of like a warm blanket on a snowy day.
If the markets continue to explore higher in 2022, it’ll be an incredible gift to us investors.
I do wonder where all the investment money is going to flow to eventually.
It’s nice to see more investment options coming to market for a wide audience. That’s interesting they are solely dedicated to a mobile interface. I bet that Crypto fund will be quite popular. Nice that they also have a low entry point and flat monthly fee up to the first 10k.
It is hard out outperform in a bull market if you are hedging. But as I look out over the next few years, hedging seems more appropriate after such a massive run. I just don’t have the time to construct the hedge and to stay on top of my investments like a full-time professional.
For example, I didn’t even realize the S&P 500 recouped almost all its losses today after being down big this morning. I was too busy at the Japanese tea Garden with my family and then getting lunch! What a volatile day.
As for Personal Capital, I just use their free tools to manage my own net worth. But if you need help, and want to speak to a financial advisor, and plan out a strategy, I think they’re worth talking to. So many people don’t bother to invest because they don’t know how or know where to start.
Great points. Does this mean you are planning/are already investing with Titan, in lieu of the structured notes you used to hedge in the past? And if so, may I ask what percentage of your equities portfolio?
Love the Japanese Tea Garden btw. Glad to hear you are getting a break from all the content you’ve been creating.
Not in lieu, in addition. I always start small and work my way up based on performance, customer service, etc. I waited for one full year before first getting introduced to them before hosting this post.
It’s how I started with real estate crowdfunding. Started with one deal for $10,000, then invested $50,000, $200,000, $550,000 through various funds and individual investments.
I keep alternative investments to 10% or investable assets. With crypto selling off hard, their crypto fund is particularly intriguing.
I like Personal Capital, but got tired of the endless calls to market their services to me. I now just use Mint and track yearly performance on my own.
Sounds good to me. It’s interesting, but I haven’t gotten a call from PC in nine years. Maybe they know just not to call me? I get alert notifications when I log into the attempt to set up an appointment with a FA. But that’s it.
I like the idea of not having to track all my investments and have one place to see it all.
My issue is having to link all my financial accounts to them. I know that is the only way to do it, but I can’t get over doing that. It is just very uncomfortable.
Yep, no worries! Or some reason, I just trust technology and the system. It’s kind of like how I trust using a credit card or paying my bills online or depositing checks through my mobile application. I have actually been saved a couple of times thanks to online safety. On time, I was mugged in China. Citibank refunded me the entire $2000.
My investment (admittedly for only about a year) in Va)g_*rd’s similar product has proven disappointing. Less than 10% overall and 4% NAV. Some online-only banks can do nearly the same. I may take TITAN up on their claims. Thx for posting(!)
Their returns do not appear to be all that great as compared to their respective indices.
I hope they do a better job than Personal Capital. I had a meeting with Personal Capital as I was considering using them to manage a portion of my portfolio but soon discovered that they were never beating any of the benchmarks. I decided I would be much better off simply investing in an ETF.
Any thoughts? I do not want to think you are only recommending them because you have consulted with them.