Another Start-Up Wants to Democratize Investing
The New York Times, December 10, 2009
Generally, when people look for money managers to help them invest their savings, they are limited to hiring people who do that professionally.
But there are many people who invest as a hobby, and some of them are quite good. A start-up called Covestor is making it possible for people to use them as money managers instead of the professionals.
“In the last few years, the world has really flattened, and investors have the same access and tools as pros, but I can’t invest alongside them,” said Perry Blacher, Covestor’s chief executive. “I have to invest alongside someone who gets paid fees whether or not he does a good job.” Covestor changes that by letting people choose whose investment model they want to follow, he said.
Here’s how it works. Covestor, which was founded in 2006, has always let investors post their portfolios so other people could view them and copy their trades, and 25,000 investors have done so. Now, customers can open a brokerage account with either Interactive Brokers or TD Ameritrade and link their account to Covestor. Then, any time one of the investors they choose to follow makes a trade, the same trade is automatically made in their own account.
