Titan Investment Management

09/14/2023

𝐌𝐚𝐫𝐤𝐞𝐭 𝐔𝐩𝐝𝐚𝐭𝐞:

- Inflation Report: The Customer Price Index (CPI) increased by 0.6% in August and is up 3.7% year over year. The main drivers of this rise are energy and shelter costs.
- Fed's Outlook: Despite the uptick in inflation, it seems that the Federal Reserve (Fed) is likely to hold off on raising interest rates at their upcoming September meeting.
- Future Uncertainty: With the next Fed meeting scheduled for November, there is uncertainty about what will happen in the market in the interim period.
- Economic Factors: In addition to inflation, other factors like the United Auto Workers (UAW) strike and a potential government shutdown could contribute to day-to-day market volatility.

𝐓𝐢𝐭𝐚𝐧 𝐔𝐩𝐝𝐚𝐭𝐞:

- AI Adoption: Titan is optimistic about the adoption of Artificial Intelligence (AI) and the potential for future advancements.
- Market Growth: The AI market is expected to grow at a rate of nearly 20% per annum over the next decade, presenting significant opportunities
- Diverse Players: Both hardware and software companies are gaining attention as demand for AI increases, not just large firms.
- Caution: Despite the excitement, Titan remains cautious due to the economic factors mentioned and the potential for market volatility.

07/12/2023

Take a look at our semi annual outlook on the market from the link below.

https://titaninvestmentmgmt.com/wp-content/uploads/2023/07/2023-Investment-Themes.pdf

Few themes being:
-Commercial Real Estate
-Banking Industry
-Chinese Economy

07/06/2023

𝑻𝒊𝒕𝒂𝒏 𝑴𝒂𝒓𝒌𝒆𝒕 𝑼𝒑𝒅𝒂𝒕𝒆𝒔

The first half of 2023 provided results that were very appeasing to all investors. While the S&P 500 rallied over 16%, the information technology sector accounted for over 60% of that return. This bodes the question; can tech and the AI boom continue to move the S&P 500 higher with the possibility of increase rate hikes from the Fed?

Inflation is obviously top of mind for all investors as it has weighed on economic output over the past couple of years. The Personal Consumption Expenditures Index (PCE) rose at a 3.8% annual rate, down from 4.3% the month prior. While this remains above the Fed’s 2% target, it has moved in the right direction, but leaves room for the Fed to hike.

The elevated inflation environment and expected actions of the Fed are drawing increasing attention to the labor market. Payrolls have blown past estimates as of late, but the unemployment rate has ticked higher as more Americans are jumping back in the labor force. This is an indicator that the power between employee and employer is shifting back to the employer as labor supply grows and inflation cools.

All these factors combine to paint a tactical environment whereby investment flexibility can capture pockets of opportunity while avoiding pitfalls. As always, if you have any questions do not hesitate to reach out.

06/20/2023

𝑻𝒊𝒕𝒂𝒏 𝑴𝒂𝒓𝒌𝒆𝒕 𝑼𝒑𝒅𝒂𝒕𝒆𝒔

The Fed has decided to keep rates unchanged in their latest decision that came last week after inflation had softened. However, there is still the potential for rate hikes in the future. The Fed considers the Core Consumer Price Index (CPI), which excludes food and energy prices, as a more significant indicator since it eliminates the volatility associated with these items. Core CPI remains stubbornly elevated compared to the Fed’s target rate of 2%.

The Fed is currently trying to strike a balance between keeping inflation pressures low and ensuring that economic output is not significantly affected. Last week, the market seemed to handle the pressure from the Fed's decision relatively well despite the possibility of future rate hikes. Given the uncertainty going forward, there is a possibility of setbacks, thus creating opportunities in the latter part of the year.

It's important to note that conditions can change rapidly, and an investment strategy needs to remain tactical to take advantage. If you would like to know more or have a discussion, do not hesitate to reach out.

04/12/2023

𝑻𝒉𝒆 𝑯𝒊𝒅𝒅𝒆𝒏 𝑹𝒊𝒔𝒌𝒔 𝒐𝒇 𝑩𝒂𝒏𝒌𝒔

Banks take people's money and use it to make loans, like mortgages and car loans, and they earn money from the interest on those loans. Banks need to have enough money set aside to cover any losses, and they're required to keep a certain amount of money in reserve. But banks can also face risks if interest rates change or if people withdraw their money. To protect depositors, the government created the FDIC, which insures depositors' money up to $250,000. Some banks have gotten so big that they have more deposits than the FDIC can insure, which can be risky for depositors if the bank runs into trouble. One example is Silicon Valley Bank, which used low-rate government bonds to pay depositors and make money for the bank, but if the value of those bonds dropped, depositors could lose money and the bank could fail. Titan Investments strongly encourages any deposit holder to review their FDIC limit as well as the interest they are earning on their checking or savings account. Remember, while the bank may be paying the deposit holder less than 1%, overnight risk-free bonds are near 5%.

01/31/2023

The Secure 2.0 Act was signed into law on Dec. 29, 2022 and included 92 provisions to employer retirement plans. The bulk of these provisions increase retirement readiness and carry less penalties for financial emergencies:

• Required Minimum Distribution (RMD) age increased to 73.
• Catch up Contributions are now indexed to inflation.
• RMD penalty decreased from 50% to 25%.
• More events qualify for hardship withdrawals.
• More flexibility around inherited IRA distribution methods.

However, the good intentions of Secure 2.0 will not be without its challenges.

• High earners (wages greater than $145,000) can only make catch up contributions on a Roth basis - What happens if the retirement plan does not have a Roth option?
• Part-time employees (working more than 500 hours a year) will be eligible for the retirement plan beginning Jan. 1, 2025 – Are plan sponsors ready for this additional record keeping?
• New retirement plans will require mandatory participant enrollment at 3%. This will then escalate 1%/year up to 10% - Currently optional for existing plans, who will ensure this requirement is met?
• Student loan matches are now an option - How will the employer reconcile this payment, let alone the frequency of the match?

Secure 2.0 provides benefits to employees across the US. However, no one seems to be asking the question of who will track all these changes? The plan sponsor (typically employer) is the fiduciary for a significant portion of retirement plans in the US. Thus, the employer will be held liable for ensuring these changes are followed.

Options exist to offset this liability. Titan Investments strongly encourage every plan sponsor to review their fiduciary duties and determine what they are responsible for. If you need any assistance, do not hesitate to reach out.

12/20/2022

Have you ever considered how your investment advisor or broker’s portfolio aligns with your own?

At typical firms most clients are placed in a wide variety of investments and differing portfolios. This poses the next question, why aren’t clients invested in the same manner as their broker or advisor? Obviously, how much you own of a given stock should correspond with your risk preference, but the underlying stock should not deviate from advisor to client.

Everyone at Titan, including advisors, own the same investments adjusted by weight to match each client’s risk appetite. Titan takes accountability for its decisions and thus analyzes every investment daily. This investment solution not only results in lower fees, but a daily review of our positions and our client portfolios.

It is Titan’s purpose to bring accountability and transparency to the investment industry.

12/08/2022

Its been a while, but for the first time in a long time overnight risk free interest rates offer a yield that is meaningfully different from zero.

The past 12 months has seen the overnight risk free interest rate move from close to 0% to 4.00% (soon to be at least 4.50%). Yet, checking and saving accounts are still paying close to 0%. Why the banks are not paying more, should be a top-of-mind question for every American.

Titan Investments is seeking to open the eyes of everyone to this anomaly. We have moved a significant portion of funds into risk free Treasury Bills that currently pay ~3.875% and offer daily liquidity. We are capturing this opportunity for our investors; banks should be paying deposit holders.

Remember, any deposit dollar a bank has is either invested into loans or investments. Why let the bank make 4% off your deposit dollar and pay you next to nothing? The largest financial institution in the world, JP Morgan Chase has more invested into overnight investments than total loans, this is the first time in history. Chase has realized this opportunity, why are Americans ignoring it?

This in conjunction with a host of other market trends will be guiding our positioning and outlook into 2023.

Nonetheless, one of the main points that will be targeted is the rise of interest rates.

11/30/2022

Welcome Ethan Claycomb!

Ethan has joined Titan Investment Management as a Financial Advisor.
Ethan hales from Vincennes, IN, a local basketball star that ascended to Bellarmine University where he led the Bellarmine Knights to their first D-I conference championship in the ASUN conference. While achieving athletic success, Ethan also excelled academically, graduating with his MBA from Bellarmine University.

Ethan was quick to pass his Series 65 and is now studying to be a Certified Financial Planner (CFP). Ethan’s continued drive towards education in conjunction with his intellectual acumen has led Ethan to establish himself as an expert in fixed income, equity strategies, and retirement accounts.

This entrepreneurial spirit is grounded in his family. Ethan was able to view firsthand the discipline and determination required to create and grow a successful business. Ethan’s father, a 2nd generation business owner, as well as Ethan’s family instilled this work ethic that has set him on a path to success.

We are excited to have him and look forward to his bright future.

11/16/2022

Titan's three main areas of focus last month:
- 𝐓𝐡𝐞 𝐒𝐭𝐚𝐭𝐞 𝐨𝐟 𝐂𝐡𝐢𝐧𝐚'𝐬 𝐄𝐜𝐨𝐧𝐨𝐦𝐲
- 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧
- 𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧

The dynamic nature of the market warrants active portfolio management. Abnormal times call for evolving investments.

Titan Insights

11/09/2022

𝐓𝐡𝐞 𝐁𝐨𝐧𝐝 𝐌𝐚𝐫𝐤𝐞𝐭 𝐇𝐚𝐬 𝐄𝐱𝐩𝐥𝐨𝐝𝐞𝐝!

With rising interest rates, is the bond market still the safe spot that investors have known it to be?

People commonly turn to bonds as a haven during rough financial times, but this year, it has not been the answer. Long dated bonds have returns that are worse than the stock market. Why long dated bonds? Typically, investors were attracted to the rates they provided during healthy economic conditions. But now? Why would anyone consider investing in these long-dated bonds when the short-term coupon is paying similar rates?

The current times are pressing investors, and if you want to see that change, quit using the “set it and forget it” mindset. Turn to a more actively managed portfolio to take advantage of the current economic conditions.

Disciplined Investing Meets Forward Thinking