Triad Wealth CIO: We Want to Introduce More Cyclicality in Our Models

Core Insights - Triad Wealth Partners has experienced significant growth since its founding in 2023, with assets under management (AUM) exceeding $1 billion within two years [5] - The firm focuses on maintaining a conservative investment strategy, avoiding high-risk assets like crypto ETFs and emphasizing a diversified portfolio [4][10] - The investment approach includes a structural overweight to U.S. equities, driven by behavioral, fundamental, and thematic factors, particularly the rise of AI [10][11] Investment Strategy - The firm employs multiple model portfolios and separately managed accounts (SMAs) to cater to various client needs, including growth and tax efficiency [2][4] - Triad Wealth emphasizes global diversification, low costs, and tax efficiency in its investment strategies [2][24] - The firm has recently adjusted its U.S./international equity mix to introduce more cyclicality and value tilt [11] Client Profile - The primary client base consists of mass affluent individuals with investable assets ranging from $500,000 to $1 million, with some high-net-worth clients [3] - The firm aims to help advisors navigate market volatility, particularly concerning oil prices and their impact on equity markets [6][8] Market Outlook - The firm observes that historically, the S&P 500 performs better in years when oil prices rise, attributing this to economic growth [6] - Current market conditions are characterized by a supply-driven oil shock, reminiscent of the 1970s, which could negatively impact equity market returns if sustained [7][8] Asset Allocation - Triad Wealth maintains a structural overweight to U.S. equities due to strong earnings power and thematic drivers like AI [10] - The firm has increased allocations to developed markets for better valuations and currency hedging, while also considering emerging markets for thematic plays related to infrastructure and commodities [15][16][17] Investment Management - The firm collaborates with third-party investment consultants, primarily BlackRock, for model portfolio management and trade updates [19][20] - The selection process for investment managers focuses on value, cost, and the overall philosophy and performance of the strategies employed [21][22][23] Tax Efficiency - Triad Wealth employs direct indexing and automated tax loss harvesting to enhance tax efficiency for clients [24][25] - The firm prioritizes the use of ETFs over mutual funds for their inherent tax efficiency and ease of transaction [26]