Asset Trip with Clay Gardner: Old World Wealth Management Meets New World Investing Strategies
Published Jan 27, 2022•Updated Feb 22, 2022
Could you tell us a little bit about what you do at Titan and how you got started here?
Sure. We view retail investing as in between two poles right now. One we would describe as the unaffordable old world of wealth management. Think traditional private wealth managers or financial advisors in physical offices where you may invest via a mutual fund, for example. The other pole is sort of casino-like gambling and day trading in self-directed brokers—folks buying and selling options and stocks—many of whom maybe haven't gotten a driver's license yet, but are given the keys to a car that they're hopping into.
What Titan is trying to do is build a middle ground and solution in between those poles, where anyone can have access to a team of human investment managers managing their money on their behalf. And they can build a relationship and communicate with those managers via their mobile phone. In just a couple of minutes, you can download the app, sign up and get invested in a combination of equity and crypto products. We have a team on staff at Titan that comes from the investment world that's managing your money in those products on your behalf and explaining it to you along the way.
Quality, long-term investments
Know the game you're playing
Getting in early on FAANG stocks
Investing in businesses he couldn't explain to a 4th grader
I'm curious about your own investing journey. Was there anything in your personal investments that led you toward this space?
That's a great question because my co-founder Joe and I actually were on different sides of the table, so to speak. Joe was caught between those two poles I just described. He struggled to invest because he didn't have the time or resources necessary to pick his own investments, to trade stocks himself. But he also wasn't too enthused about the old world of money management and, frankly, didn't have the wealth required (nor did I) to be able to invest with an old school money manager. My background was sort of the opposite; if he was the user of Titan, I was the expert on the other side of the table. I used to help manage money on Wall Street, in private equity and for hedge fund firms that managed money on behalf of wealthy individuals, institutions.
So, we met on the first day at college, at Penn, back in 2008 and then reconnected almost 10 years later. We realized that although we had gone in very different directions after college we both had noticed this massive problem: many people don't have a smart expert that they can have in their pocket managing money. Many people aren't so privileged as to have those folks in their lives. But Joe had me, right? So we were like, how do we democratize? How do we scale that sort of relationship so that anyone can push a button and have an investment manager at their service?
I'm curious, from the perspective of your average, more traditionally oriented investor—someone who maybe contributes to their 401k and has a mutual fund—what do you see adding Titan to their portfolio doing for their overall investments?
We see most clients that come to us actually have accounts opened at Fidelity and Schwab or other brokerages, and maybe they're dabbling in mutual funds and ETFs. We're winning pretty meaningful accounts from those platforms. So we actually find that occasionally some folks will dip their toes in Titan and try us alongside those other products. They may move some money from a cash, checking or savings account into Titan to see what we're all about and test the products.
But very quickly we've seen lots of clients rollover and transfer funds from those other platforms and those older mutual fund products into Titan. I think once folks have a direct-to-consumer, direct-to-manager relationship with the person managing their money and have that person explaining it to them along the way, that's just a dramatically different experience. So while we don't perceive [those brokerages] to be direct competition, we are seeing a lot of shared gains from those players.
You need to know what game you're playing. Otherwise, you're bound to get whipped around by others.
In terms of your own personal investments, what is your investing strategy, and how do you allocate your assets accordingly?
Well, I have [some] amount of my net worth in Titan. And the way that I think about investing is from the perspective of the quality investor. So, long-term focused. I think the time horizon is the ultimate edge for investors, and it's definitely my personal edge. That ethos has manifested itself in terms of the products we built and how we manage them. All of them have the same philosophy, which is to [invest in] quality assets that are productive, at reasonable prices, and then sort of do nothing. And then when news flows, when events and catalysts present themselves and we believe it's warranted, we'll make changes. I think doing nothing can be the ultimate friend of the personal retail investor, and it's a privilege that many institutions don't have. They have to put up numbers every year, which affects a lot of the decision-making.
How old were you when you started investing? Do you happen to remember what your first investment was?
I do. I started investing when I was 12. I believe the first investment my parents encouraged me to choose was Google, which was a great investment in the early- to mid-2000s. I think I also dabbled with, honestly, some stocks that I had heard about through CNBC, you know, all the news channels. My personal journey was very much one of self-discovery, of making mistakes, of trying to figure out what type of investor I was. Do I day trade, do I follow charts? I think every person probably has a similar journey where they kind of have to figure out their own personality and their temperament. I was just very fortunate where I was able to make those mistakes with a really small amount of money at a really early age, which has informed a lot of the investor that I am today.
So speaking of those mistakes, if you could go back and give your former investor self any piece of advice surrounding investing, what would it be?
I would say: know the game that you're playing, that's the most important thing. Markets are a really complex system. There are first order, second order, third order consequences. There are short-term focused day traders looking at charts. There are long-term focused investors looking at the future of innovation and AI [artificial intelligence]. Then there are also all sorts of institutional imperatives. There are pension funds that have a certain hurdle they have to meet, which inform our asset mix. There are private asset managers working for wealthy families that can invest for the next 50 years.
What those various motives and players mean is, you need to know what game you're playing. Otherwise, you're bound to get whipped around by others. Emotions run high, you heard from your Uber driver that XYZ is a good stock so you wanna go buy it. There's a lot of temptation and always a lot of chaos in markets. I think the more you know yourself and know the game you're playing, the better equipped you can be to make rational decisions.
Not to put you on the spot, but I like to end these interviews by asking what your biggest investing win and biggest investing losses are.
That's a great question. I would say the biggest investing wins have to be understanding the power of internet platforms pretty early. So FAANG stocks are sort of all the rage today, and I dipped my toes in pretty early. I think it was like the late 2000s, not quite near the IPO, but I was a big fan of the products. Peter Lynch, a famous manager from Fidelity, says buy what you love. Which can go both ways, but it's ended up being a positive for me, just investing in platforms I believe are producing great products and services I use. So, Microsoft, Apple, Google, those have been pretty meaningful winners, especially considering how big those businesses have gotten.
Biggest losers, man, there are too many to count to be totally honest. <laughs> I'll say the biggest losers were, categorically, businesses where I couldn't quite articulate in fourth grade English what the business did and why I believed it would manifest itself in a better-than-average outcome. Whether it's because I heard XYZ from a friend at an early age or some news pundit mentioned it on a financial news channel or I read about it in the paper. Any time I can't confidently explain something in fourth grade English to my grandmother, but also be able to dive deep and double click into it and explain it with some of the best investors in the world, usually what ends up happening is you sell in times of fear and times of volatility as opposed to buy, which bites you in the foot.
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If you're interested in investing like Clay, you can check out these platforms:
- Titan: the new-guard investment platform bringing premier, active investment management to everyone
- Schwab Intelligent Portfolios: a robo-advisor that builds, monitors, and rebalances a diversified portfolio of exchange-traded funds
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