Wall Street Goes Web 2.0
Does anyone still call their stock broker? A number of new start-ups hope you’ll turn to their online communities instead of picking up that phone. And even with the turmoil on Wall Street, financial start-ups are growing like weeds, though many Americans’ portfolios are not.
From free trades to social lending, these companies are changing the way we interact with Wall Street and our portfolios. Who would you rather trust: an online investment community or your stock broker?
Investment Web 2.0 Style
Covestor – Do you ever dream of running a hedge fund? Covestor gives you the investment opportunity of becoming a money manager right from your bedroom. From their website, Covestor is:
“A real-trade sharing service for proven self-investors. To share your real investment decisions, gain recognition and earn fees by helping others.”
Only active traders are allowed to earn fees, and there are some obvious legal questions regarding giving stock advice. But if you’re hot stuff and can prove it with your trades, you should start building up a following at Covestor now.
The UpDown – Similar to Covestor, The UpDown allows you to compare your investment performance to the community and get paid for it. At UpDown however, your portfolio is play money. Perform well, and you can earn real money. My portfolio was up 7.95% in February. I made $1.37 in real money for my play performance. It’s a bit like Fantasy Football for investors.
Too bad that million dollar portfolio wasn’t real! UpDown’s trade platform feels and acts very real, and it’s addictive. If you think you’re a great trader, strut your stuff on UpDown and play without the risk. You start with $1,000,000 cash.
Zecco – Zecco launched last year with the offer of “free trades” for all. That promise has since been scaled back to 10 free trades a month provided you have $2,500 to deposit. While I’ve heard rumbles of customer service issues, if you’re an options trader, a $4.50 base is pretty cheap. Once I can scratch together $2,500, I’ll be opening an account here to try out.
Their social angle is called “ZeccoShare.” Here, Zecco clients can share their investment portfolios as well as see top holdings across the community. Not as advanced as Covestor or Cake, but Zecco is the all-in-one deal: brokerage and community.
How will Web 2.0 change Wall Street?
Will Web 2.0 and social networking communities change Wall Street? Has it already? Share your thoughts with your fellow Lending Club blog readers!
Tuesday, March 25th, 2008 at 1:24 pm