Investing in stocks is a risky business, especially when the markets are a roller coaster like today. Rather than putting all your money in US government bonds until the storm is gone, one can use the web to alleviate the risk by following every move of experienced money managers with verified track records.
That’s exactly what US/Israel-based Vestopia does best. Vestopia lets you follow, in real-time, the real transactions and holdings within the personal portfolios of 18 professional investors. I took advantage of the free membership and gave it a try. After a short setup, I was able to shop for investment directors based on performance in the past three months. Even though they are experts, only four of them had a positive balance. Dan Knight, CFA had the best performance, with 9.3% returns (risk was n/a) and Kirby Cundiff, a finance professor had a tougher luck, with negative returns of %59(!). I was able to shop for investment directors by filtering for investment approach, equity strategy, investment timeframe and their individual strategic profile.
Shopping at the “eBay of money management, Click screenshot to enlarge:
Vestopia is not a tips site, but it’s easy to find investment ideas by looking at 18 portfolios. The blogs written by the investment directors were a great resource. Dan, my top performing adviser posted on the recent developments: “After Big Market Declines, Value does best”, making Vestopia not only a trading log, but also an educational tool.Looking for investment ideas, I snooped around my expert’s portfolio (click to enlarge)
Vestopia started it’s career as IncrediTrade, back in August 2006. In January of 2007, Vestopia raised an undisclosed amount led by LGiLab, a joint venture between Lightspeed Venture Partners and Gemini Israel as well as Ofer Hi-Tech, where the idea was born. Led by CEO Guy Hirsch, Vestopia has its business office in Menlo Park CA, and a development center in Israel.
To answer some of the questions that came to mind, I interviewed Josh Blacher, Vestopia’s EVP and CFO. Below is the transcript:
1) Josh, in a few words, how would you describe Vestopia?
JB: Vestopia is the most transparent form of money management. Members benefit from watching sophisticated investors manage their real money in real time.
2) So, how was the web traffic to Vestopia affected during the recent Wall Street slump this week?
JB: At times of uncertainty, folks looking for answers turn to seasoned pros, such as our Investment Directors. This may explain why our recent traffic has been significantly above its normal levels.
3) Who’s money are the Investment directors investing? Does Vestopia have its own portfolio?JB: It’s the Investment Directors own, personal money … which is why this is so interesting. The performance the Investment Directors experience in the accounts Vestopia members view truly affect their net worth – their personal savings, their retirement funds, their children’s college tuitions, etc. Results matter. Vestopia itself is exploring running money.
4) Let’s talk about competition. Vestopia is often compared to Covestor. What would you say are the main differences between you two?
JB: Clearly we’re looking to accomplish a similar goal, so we respect what Covestor is doing. The main differentiator is that Vestopia’s business model is focused around the investment decisions of folks who have been personally vetted (not democratically), and meet our rigid standards. They are people with real names, photo’s, biographies. You can get to know them. They are not anonymous. Further, Vestopia has also enabled a rich ‘content’ layer, where the Investment Directors can explain their every move to their members.
5) Can you share your lessons learned with first time investors, looking to “buy cheap” these days?
JB: At Vestopia, we’re very much focused on true investing, rather than short-term trading. There is a discipline. While global markets continue to find new lows, we believe there is a lot of opportunity hidden amongst the fear!
Thank you.Vestopia is with no doubt an interesting idea, with a big challenge ahead. Think you can you make your first million trading? Sign up for free and let me know.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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