Watch and learn
NEW YORK – Larry Bellehumeur’s investment advice isn’t always that exciting, but he attracts curious onlookers – all part of a new wave of investors who have turned away from brokerage houses and mutual funds and rely instead on the Internet to help determine their investment plays.
Bellehumeur, who calls himself a mostly long-term investor, has gone public with his picks through a company that tracks what he trades and posts his moves online for others to see. While turning to the Internet in search of financial advice isn’t new, some investors have increasingly been looking for new sources of guidance, including fellow investors like Bellehumeur, since uncertainty began lapping at Wall Street last year.
Bellehumeur is a member of Covestor, one of several companies that tout a what-they-trade-is-what-you-see philosophy to attract investors. By revealing each move that its marquee members make, the company and others like it hope to appeal to investors looking to sidestep advice dispensed by blogs, chat rooms and message boards.
Through the company’s Web site, www.covestor.com, Bellehumeur receives questions from investors asking about his buy-and-hold investment philosophy and about his success in keeping ahead of the broader market. He said he has attracted both praise and doubts about his approach.
He gets questions about how he’s down only 1.6 percent for the year when Standard & Poor’s 500 index is off by about 6.5 percent. And over about two years, he’s up about 42 percent. He said his portfolio has benefited because he’s been able to find ideas from like-minded investors on the Covestor site.
“I definitely use it to gain access to stocks that I probably wouldn’t have found on my own,” he said. “I try to find someone with a similar philosophy as I have, which is buy and hold.”
“There are self-directed investors who always want to lord over their own positions and they’ve become more active and they feel a stronger need for information based on the volatility of the market,” said Steve Markowitz, chairman and chief executive of Vestopia. “Volatile markets lead investors to seek information and guidance.”
Vestopia – www.vestopia.com – relies on professional investors who have struck out on their own after gaining experience at places like Wall Street investment houses.
“What we’re doing is allowing self-directed investors to look over the shoulders of Wall Street pros to see what they do in their own personal brokerage account with real money, in real time,” said Markowitz.
Both Vestopia and Covestor will alert their members when a portfolio they are following makes a change. So if Bellehumeur decides to buy or sell an investment, those who have chosen to follow him can get nearly instantaneous notice of his decision.