Vol III, No. 3

April 2015   



A monthly commentary about the role of behavior (and misbehavior) in investing



The Misbehaving Investor

The potential for even small investments to compound over time to meaningful amounts (...say a million bucks) is greater than many of us realize.


In this month's issue, we urge younger investors to start investing as soon as they can.


John Feb 5  

John Heldman, CFA

Partner/Portfolio Manager

Dave Hutchison, CFA
Partner/Portfolio Manager
About Us

Triad Investment Management manages all-cap, small-cap and balanced portfolios with a focus on Research, Behavior and Ethics.  Founded in 2008, Triad is a 100% employee-owned SEC registered investment adviser.  Learn more at www.triadim.com


Triad managed $131 million as of March 31, 2015.  The Concentrated All-Cap Equity composite return, annualized and net of fees since inception, is 9.7% vs. 8.3% for the S&P 500 Index (April 30, 2008 to March 31, 2015).


Please review our Concentrated All-Cap Equity annual disclosure presentation and the important disclosures at the bottom of this issue. Past performance does not guarantee future results.

Triad Small 1-24

Who Wants to be a Millionaire


Listen up kids.  To me, that means anyone under age 30.  Parents too.  I'm gonna tell you how you can become a millionaire.  It takes time, but it can be done.  Let's say you're 25 years old and you'd like to retire at 55.  Let's further assume you invest all the funds in the stock market, and earn the historical 10% per year.


Starting with zero you need to save $6,079 per year and invest it all into the market.  Scary thought, but bonds or cash won't do it.  If you give yourself a bit more time, you can save less.  With a 40 year timeframe, you only need to save $2,259 per year, or about six bucks per day.  That's about the cost of a pack of cigarettes or a Venti iced nonfat caramel macchiato whipped Frappuccino at your local Starbucks.  Actually I made up that drink name.  Start even sooner, say at age 15 and give yourself 50 years to invest.  The yearly amount drops to $859 or a little over two dollars a day.


Now I don't know what $1 million will buy in 30, 40 or 50 years, but I'm guessing it's going to be better to have an extra $1 million in retirement than not.  However, there are two issues that prevent many people from taking the first step.  One is plain old ignorance, not realizing the math of compounding your money over decades.  The other is to methodically invest your money for 30 or 40 years and not spend it today or tomorrow.  It takes discipline and spending restraint, and we humans aren't wired to handle this stuff easily.


Why bring this up?  I read lots of articles about the lack of retirement planning by various generations.  Let's start with mine, the Baby Boomers.  Ten thousand boomers are retiring each day and many will survive on Social Security and perhaps a small pension.  Too late for them to do anything significant.  Gen X, born between 1965 and 1980, has some time, but needs to be well on the road to saving.  


No, this advice is aimed primarily at the very young, Generation Y, or Millennials, born between 1981 and 2000.  Or the next crop, which apparently is being called Generation Z or Boomlets, born 2001 or later.  This group still has the benefit of time to save and grow some serious bucks.


So do a Millennial or Boomlet a favor and make him or her read this.  It might be a waste of 5 minutes or it could change a life.  Get them to recognize early that the roadblock to financial success runs straight through human behavior, and make them commit to saving, now.  


The sooner you start the sooner you can finish and the more you'll have to see you through the golden years.  Parents, educate your kids about money and they'll thank you.  And you can spend their otherwise inheritance on yourself knowing they'll be ok.  I'd call that a win-win.  The Millennials might not.

-John Heldman, CFA
Past performance does not guarantee future results. Results are presented net of fees and include the reinvestment of all income.  The opinions expressed herein are those of Triad Investment Management, LLC and are subject to change without notice. Consider the investment objectives, risks and expenses before investing. The information in this presentation should not be considered as a recommendation to buy or sell any particular security and should not be considered as investment advice of any kind. You should not assume that any securities discussed in this report are or will be profitable, or that recommendations we make in the future will be profitable or equal the performance of any securities discussed in this presentation. The report is based on data obtained from sources believed to be reliable but is not guaranteed as being accurate and does not purport to be a complete summary of the available data. Recommendations for the past twelve months are available upon request. In addition to clients, partners and employees or their family members may have a position in any securities mentioned herein. Triad Investment Management, LLC is a registered investment adviser. More information about us is included in our SEC Form ADV Part 2, which is available upon request.

Triad Investment Management, LLC claims compliance with the Global Investment Performance Standards (GIPS®). Triad has been independently verified by Ashland Partners & Company, LLP for the period from the strategy's inception, April 30, 2008, through December 31, 2014. Triad is an SEC-registered investment advisor. The composite includes all fully discretionary separately managed accounts that follow the firm's Concentrated All-Cap Equity investment strategy, including those accounts no longer with the firm. Triad's strategy is to invest in a concentrated portfolio (usually holding between 20 to 30 securities) of common stocks, unrestricted as to market capitalization, of both domestic and international companies. The U.S. Dollar is the currency used to express performance. Past performance is not a guarantee of future results, and there is a risk of loss in investing in equities. Results are presented net of fees and include the reinvestment of all income. Investments made by Triad for its clients differ significantly in comparison to the referenced indexes in terms of security holdings, industry weightings, and asset allocations. Accordingly, investment results and volatility will differ from those of the benchmarks. As of June 30, 2013, the Triad Equity Composite was renamed the Concentrated All-Cap Equity Composite.  For more information or for a copy of the firm's fully compliant presentation and the firm's list of composite descriptions, please contact us at (949) 679-3991.



1Q 15
1 Year
3 Year
5 Year
Triad Concentrated All-Cap Equity
S&P 500 Index

As of March 31, 2015.  Results presented net of management fees.



© 2015 Triad Investment Management, LLC