Titan Invest Review – Invest Money Like A Hedge Fund
The term “hedge funds” conjures up images of Wall Street bankers in expensive suits, and for good reason.
Hedge funds have traditionally been off limits to all but the wealthy, as you normally need several hundred thousand dollars lying around to invest. In fact, you have to be considered an “accredited investor” (either have a $1 million net worth or have earned $200,000 income over the past two years) in order to invest in hedge funds.
Then there are the fees. Hedge funds take a lot of resources to manage properly, and so the fees associated with investing in them can seem extortionary.
Put these two together, and it’s easy to see how hedge funds aren’t really an option for the average investor.
Well, not anymore. Titan Invest, a new company in the fin-tech sphere, is looking to bring the average person a hedge fund investing-like experience and earn you great returns.
But we’ll be the judge of that. Read the rest of our Titan Invest review below to see if this new service is worth signing up for.
What is Titan Invest?
Titan Invest is a trading platform that relies on certain algorithms in order to act similar to a hedge fund. Titan was founded in 2017 by Clayton Gardener, Joe Percoco, and and Max Bernardy.
All 3 have worked in finance in varying capacities. Clayton has a Wharton degree and a UPenn Engineering degree, and he’s worked at hedge funds and in private equity; Joe also has a Wharton degree, and he’s worked at consulting firm McKinsey, Goldman Sachs, and a hedge fund. Max has a Stanford Computer Science degree and has worked in software engineering roles at various tech companies and hedge funds.
To put it shortly, the team behind Titan Invest knows what they’re doing.
How Does Titan Invest Work?
Now, Titan Invest acts like a hedge fund, but they make it very clear that they are not actually a hedge fund. They are an SEC-registered advisor; since they’re online, they’re also technically a robo-advisor.
Titan Invest uses what’s known as an algorithmic trading platform, which is simply a trading platform that trades based on specified algorithms.
Titan in particular uses algorithms that track and analyze hedge fund filings, then they invest in a manner that follows the hedge funds that are doing well.
Before you invest, they first ask you for your risk tolerance. Then, when you invest, you get 20 stocks in your portfolio. Each quarter, Titan Invest changes the portfolio by adding and removing stocks as they see fit based on their algorithms.
Titan Invest picks their stocks based on several criteria:
- Wide moat – A “wide moat” means the stock has a sustainable competitive advantage that makes it hard for competitors to snag some of their market share. It’s like a medieval castle’s moat that prevents outsiders from coming in.
- High returns on investment
- Great management
- Cash generation
- Good chances for growth
The “hedging” portion of Titan’s services appear in the form of shorting the market.
Shorting is when you borrow shares of stock from a lender and sell them at their current price. You’re then supposed to buy them again later and return them to the lender. The goal of shorting is to repurchase the stock at a lower price than the price at which you borrowed them, so that when you return the stock the lender, you’ll have pocketed some extra money
Basically, it’s “sell high, buy low” instead of “buy low, sell high”.
Titan Invest shorts anywhere from 0% to 20% of the market in your portfolio depending on your risk tolerance to hedge against market drawdowns; if the market drops, your normal holdings decrease, but your shorts even it out by increasing.
Thus, the lower your risk tolerance, the more your portfolio will consist of shorting.
Titan Invest’s Fees
Titan Invest has a very simple fee structure: they charge you a 1% wrap fee per year, which is basically an all-encompassing fee that covers the various tasks involved in managing your assets.
So if you have $1,000 invested, you’d owe $10 per year.
Most hedge funds also charge performance fees, aka a portion of your investment profits, which in theory entices the hedge fund managers to do better with your investment capital.
Titan Invest once again charges none of these, yet they still work hard to make your money work for you as they’re all about helping the average investor earn hedge fund-level returns.
Titan Invest’s Pros
Accessibility to Your Money
Hedge funds require you to sock money away in them for months at a time; you can’t withdraw your investment whenever you want.
Titan Invest, however, lets you sell your investments and take your money out whenever you want. You do have to wait two to four days for the money to hit your bank account, but it’s better than waiting months before you can withdraw your cash.
We already mentioned it, but Titan Invest has a nice and clean fee structure that’s also quite cheap. This helps get Titan Invest’s features into more people’s hands.
Titan Invest caters to two types of audiences. The first one is the general long-term investor, and they do this with their normal taxable account.
The other audience that Titan Invest serves are retirement investors. They offer their own traditional and Roth IRAs which invest into their portfolios, giving you a chance to build retirement wealth using advanced algorithms that have provided a good return.
Unlike hedge funds which require hundreds of thousands or even millions of dollars to invest, Titan Invest only asks you for $500 to get started. It may seem steep if money’s tight, but it’s quite low given how similar investing with Titan Invest is to a traditional hedge fund.
Research and Educational Material
Gigantic investment prospectuses are intimidating even for experienced investors, so there’s no way your average person will even touch one.
To further their mission of helping the average investor, Titan Invest ditches the whole prospectus route in favor of in-app videos that use layman’s terms to explain complicated investment topics.
That’s only part of it, though. Titan Invest also provides real-time updates on stocks, deep dives into particular portfolio holdings, various notes in video and audio form, and formal quarterly letters regarding their portfolio.
You can sign up for their email list and they’ll send a weekly letter and plenty of investment research straight to their email inbox as well.
All in all, Titan Invest does an amazing job providing in-depth investing information in a way that people who aren’t hedge fund managers can digest.
Integration With Other Apps
Do you use Personal Capital? Titan Invest can integrate with your Personal Capital and Mint to track your other investments in a convenient fashion. They’re relatively new still, so they’re constantly working on building connections with other personal finance apps/services. Keep an eye out for announcements about new partnerships and integrations with similar services!
Referral Program (And Zero Fees)
We’ve already discussed how Titan Invest’s fees are much lower and simpler than traditional hedge fund fees, but did you know you can get Titan Invest’s services for free through their referral program?
Their referral program is unique in that for each person you invite to the app you receive a $50 credit (up to $1000). Your friends then get to knock off 0.25% from their annual management fee.
To take advantage of the referral bonus, you have to invite friends and family directly through the app’s interface.
Like any good investment service, Titan Invest has plenty of safety features. Your account is insured up to $500,000 by the Securities Investor Protection Corporation (SIPC). To protect your financial information, Titan uses 256-bit encryption, one of the most secure forms of encryption used today.
Rest assured that you’re safe using Titan Invest.
Titan Invest’s Cons
Titan Invest has got some good stuff going for it, but it’s not all perfect. Barring a few minor things, most of its drawbacks are related to its young age.
As Titan grows their user base and continues to build their platform, we’ll hopefully see them address these cons and enhance the user experience.
Titan Invest’s fees are a pro insofar as they beat hedge fund fees. However, they’re steeper than their robo-advisor competition. Even actively managed robo-advisors competing with Titan Invest have lower fees.
But it still beats hedge fund fees (if you could afford to invest in those in the first place). And hey, refer a few friends and you’ll be paying no fees at all anyways.
No Web Platform
As of November 2019, Titan Invest unfortunately does not have an online version. If you wanted a more comprehensive web version of the app, you’d be out of luck.
But there’s hope: Titan Invest says they’re working on a full web version of their app. We aren’t sure when exactly they plan on finishing and releasing it, so acclimate yourself to the app for now and keep an eye out for announcements regarding their web version.
For the moment, Titan Invest is only available to investors in the United States. However, they’re already addressing this drawback: Titan Invest has a wait list of international investors who will get first access the moment Titan Invest goes international.
The Verdict: Should You Sign Up for Titan Invest?
Overall, Titan Invest is pretty good. They’ve actually beat the S&P 500’s returns by 0.4% as of November 2019; not a lot, but it’s reassuring to see them beating such a large and well-known index.
That being said, Titan Invest is built for long-term investing over short-term trading. If you’re looking for somewhere to store away money for the long term and build your wealth, Titan Invest is a solid choice.
However, if you’re getting into trading as a profession, enjoy watching the market everyday, need to make a good return within only a few months, you just enjoy trading in the short-term for any other reason, Titan Invest isn’t a great platform for you.
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