There are no secrets online anymore. People share everything, even the performance of their personal stock portfolios. Social investing site Covestor raised $6.5 million in a series A financing based on the appeal of this concept. The round was led by Union Square Ventures and Spark Capital. Europe’s Amadeus Capital Partners also participated. The startup previously raised $1 million last June from the founders of Seekingalpha, Betfair, Tribe.net, and Wallstrip.
Covestor, which is still in beta, lets you link your real brokerage account to the service so that you can compare your returns against other Covestor members, professional fund managers, and the overall market. As I wrote last October:
The idea is that eventually, the best investors will emerge, and Covestor plans on creating ways to invest in their “funds.” They are actually just going to be selling the data and linking it to the brokerage accounts of people who choose to be followers. The investing stars who arise from this social soup will be able to offer their trading data for a fee once they build a track record or give it away for free and enjoy the notoriety of being an investing whiz. Covestor will take its cut as a management fee.
Covestor competes with Cake Financial—which also lets you link to your real brokerage account and tracks more than $1 billion worth of investments—SocialPicks, and Motley FoolCaps. Covestor won’t disclose the total value of the funds it tracks, but last October it was $100 million. Presumably, it is now much higher.
First time to be the first`.`lol
So, if you share your financial information, will that not affect the performance of your portfolio. i am talking about a negative feedback loop. i think investors should get some thing in return for sharing the data.
Covestor is an excellent service!
i LOVE covestor. for the first time in history, it makes stock picking a meritocracy, and everyone benefits – if you’re great you get acclaim from the community and they say that soon you can charge for people to be able to follow you – which is fabulous.
This VC group seems a great fit for Covestor. They have success in social Web sites. Adds a lot of value to what is a very strong concept. Watch out Wall Street…as an avid seeker of non-wirehouse investment ideas i find Covestor very intriguing, and have found strategies not in evidence elsewhere. Good luck!
I have been a member of Covestor since August, 2007 and am very pleased with the service so far. The folks at Covestor are very responsive to suggestions for improvements, etc. From my experience as an avid stock investor in both the Canadian and American markets, Covestor can make you a better investor and if you are considered by others to worth following, you can make a few dollars as well.
I have been a member of similar sites over the past three years and none were as good as Covestor.
Self-sufficiency is neat, no doubt.
The best investors won’t put their stuff up on Covestor. Invest in a private equity fund managed by someone with a great track record.
http://news.bbc...ess/7254456.stm
What a cool idea – it’s like MySpace for stocks! I wouldn’t be surprised to see Microsoft or Google gobble this thing up within a few years!
I like this service (and Cake too) a lot, but I think it will be a fairly niche service. You have to be a very active, engaged investor, you have to trust non-pros (people should, but many don’t) and you have to be interested in giving to get. Ultimately, I think the best of these get gobbled up by brokers and they become just another way to find ideas.
i think plenty of people will put trades up. Especially if its easy – and they stand a chance of making some money of it in the future. Its the perfect form of leverage without the risk to them.
Go Covestor! As a blogger who writes about investing, there is nothing more important to a reader than credibility and verification of assertions. Covestor levels the field providing performance evaluation of my actual account for me as well as for my readers.
There is nothing more useful than watching investors actually make trades and incur profits and gains as is possible through Covestor.
Congratulations to the folks at Covestor where I have found immense help in developing my own website and learned much from other investors who also struggle to deal with the changing investment climate.
I did a fascinating interview with Perry Blancher, Co-Founder of Covestor, on UsableMarkets.
You can read it here: http://www.usab...kets.com/?p=226
~alex (UsableMarkets.com)
I have been an amateur investor for the last 5 years or so and an active member of Covester for almost a year. I have found that Covester has greatly increased my effectiveness in my own investment strategies as well as introduced me to many new equities and investment philosophy refinements. Congratulations to Covester on its new financing and I can’t wait to watch it continue to mature and evolve!
>>> Nice approach…
>>> Complex business model…
I’ve been a member since Aug ‘07 and one of their top performers, with a track record of consistantly outperforming the indices. I was attracted to Covestor because it offered a way to be rewarded for my trades. It is also the only site i know which verifies trades.
I’ve been using Covestor since last fall and have enjoyed watching it grow – it’s a great service.
There are still ways to game the system, though:
http://www.jack...mp-and-dump-20/
All these sites forget that social investing is a disaster waiting to happen. I don’t trust money managers with my money. Why would I trust some Silicon Valley idiot with half a clue about how to invest in the market?
Go buy an index fund or have enough to invest in a hedge fund. Otherwise, the market WILL beat you 8 times out of 10.
Oh and yeah, Covestor’s spammers up above – nice try
This seems like the year 2000 all over again. There were a handful of websites like this that perished. Covestor just seems like the same stuff with 2.0 spin. I invested in one such company in 2000 called JoeAdvisor.com. There’s still an old article about JoeAdvisor still online at http://triangle...ewscolumn1.html
Maybe the timing is better now…I hope so for the entrepreneurs and investors sake. My timing sucked!
Yeahhhhhh baby, as Covestor’s Top Ranked “Investor” I approve this transaction.
One of the fundamental purposes of financial systems is to dilute risk. Covestor does the exact opposite of that, by magnifying the impact of the wins and loses of a smaller set of “top investors”.
I’ve been with Covestor since March last year, and have benefited in several important ways:
1. I’ve run into many new and challenging ideas. These have helped me clarify my own, and as a result I believe I’m becoming a better trader.
2. Covestor encourages traders to record their rationales for every trade. I’ve found that to the extent that I do this, I’m becoming more disciplined.
3. That performance chart of mine takes the place of a lot of record keeping that I really just never have been able or interested in.
About a couple of concerns mentioned by other commentators here already:
Concern by # 2 above
“So, if you share your financial information, will that not affect the performance of your portfolio. i am talking about a negative feedback loop. i think investors should get some thing in return for sharing the data.”
My thought is that if some other trader were to “front run” my trades, based on seeing what’s on my Watch List on Covestor, that would only serve to move the market in my direction. And if someone were to fade my trades, by taking the opposite side of the transaction, I need to buy from some seller, so I’m not concerned about who that might be.
Concern by Z, # 8 above,
“The best investors won’t put their stuff up on Covestor”
My experience is that the best traders on Covestor, some of whom are
“amateurs”, and some of whom are professionals, completely blow away the competition. This is not just based on a few lucky trades, but a significant number over time, all subjected to the rigor of having their trading statistically evaluated, so that their returns are Risk Adjusted as well. And I can see their verified trades today, while they might still do me some good. It really doesn’t do me much good today to learn what even the highest perfoming Mutual Fund managers, or for that matter, Warren Buffett, bought 3 months ago.
#19 above expressed this concern:
“social investing is a disaster waiting to happen. I don’t trust money managers with my money. Why would I trust some Silicon Valley idiot with half a clue about how to invest in the market? Go buy an index fund or have enough to invest in a hedge fund. Otherwise, the market WILL beat you 8 times out of 10″
My response: You’re right about the market beating traders most of the time, especially not the way most traders go about it. That goes for professionals as well as for amateurs. Most students don’t get straight A’s, most people don’t run marathons, and most traders don’t have what it takes to be in that top 10 or 20 percent, not to mention the top 1 or 2 percent. But I have actually found an increasing number of them on Covestor.
If anything, after this experience with Covestor, I’m far more convinced now than ever that it’s possible to be in that top small percent.
http://www.cove...mbr/Don_Bartell
Congrats Rikki! May the additional funding step up the competition with ZeccoShare to deliver a more transparent and credible social investment experience to the masses. Power to the retail investor!
I have yet to hear about any friend or colleague that has succeeded in his portfolio investment by following any of these social platforms. I continue to follow (with good success so far) the gstock supercomputer stock alerts.
http://www.gstock.com