Covestor Helps Users Invest Like Pros, Automatically

By Rachel Schramm - 14/02/2012 07:00:00

Since 2006, Covestor has grown into one of the leading online stock trading sites. It owes its success to the unique options it offers its users, and the potential for profit that it offers portfolio managers.^[1] 

 

For Investors

 

Covestor makes the stock trading process simple, even if users have never traded a stock in their lives. Essentially, anyone with the initial $10,000 minimum portfolio can start investing like a pro. Not only do Covestor users gain valuable insight into how money managers invest, they can set up their account to automatically mirror the actions of investors that match their investment goals. These funds are invested in the same manner, even though it's always in the client's name. Covestor users can earn the kind of returns comparable to those that fund managers make.^[2] 

 

Here's how a mirror account works^[3]:

 

1. Users open an account: The user must deposit $10,000 to open and fund a brokerage account, which then establishes them as a Covestor client.

2.  Determine their investment strategy: Covestor uses a zero to five scale to determine what kind of investment model clients should follow:

 

• 0 - These investors primarily seek capital preservation. For them, only minimal fluctuations in the value of their portfolio is acceptable. Covestor recommends these investors not participate in their programs.

• 1- With capital growth in mind, these users are able to accommodate moderate fluctuation in the value of their portfolio, and have no need for current income. 

•  2 - These users are less concerned with fluctuation in their portfolio.

• 3 - Investors at this level in the scale are less concerned with fluctuation in the value of their portfolio, and willing to accept leverage to achieve their investment goals.

• 4 - Not concerned with fluctuations in the value of their stock portfolios, these users are willing to take substantial risk to reach their investment goals.

• 5 - With significant growth in mind, these users are willing to take exceptional risks and accept drastic fluctuations in their portfolio to achieve their investment goals, including speculative and concentrated positions in high-risk securities.

 

3. Users choose the models they want to use to invest and subscribe to it. They can amend their strategies or unsubscribe at any time. 

4. Covester users then make an easy monthly payment: Fees, 0.5% - 2.30% of assets, are charged only on subscriptions, and will be automatically withdrawn from the brokerage account. 

5. All assets are protected, secure, and private. Investments are held in the user's name, and watched over by a federally regulated custodian. Covestor guarantees the privacy of all data.

 

Covestor Wealth Service

 

For those eager to invest even more in the market, Covestor offers the Covestor Wealth Service, which requires a $50,000 initial portfolio value. With this option, serious investors can entrust their investments to experienced professionals, who will follow a pre-agreed upon investment strategy. Even though they aren't hands on every day, Covestor Wealth Account holders stay up-to-date with changes in their portfolio. Account holders receive highly personalized service from investors with a deep knowledge of the market, so they face reduced risk and gain a highly optimized portfolio.^[4] 

Convestor doesn't limit its scope to just clients. They are always ready to welcome new market-savvy managers into their business.

 

For Managers

 

Stock portfolio management pros can profit more from work they're already doing; they earn money for each person who subscribes to their investment model. Users don't have to be registered advisors, as each user's investment track record will speak for itself. For registered advisors; however, Covestor offers direct retail distribution for existing investment models. They eliminate the middle man, the administration, and the marketing fees; all fees will be split 50/50.^[5]

Covestor seems like a company with promise, creating value and revenue both for investors and managers. With an initial investment, Convestor can quickly help an investor make a profit in the stock market, and since it's all online, they can do everything from home.

References

[1] "About Us." Covestor. n.d. n. page. Web. 5 Oct. 2011.<http://site.covestor.com/about-us>.

[2] "Invest." Covestor. n.d. n. page. Web. 5 Oct. 2011. <http://site.covestor.com/invest>.

[3] "Suitable Investments" Covestor. n.d. n. page. Web. 5 Oct. 2011. <http://site.covestor.com/invest/suitable-investments>.

[4] "Convestor Wealth" Covestor. n.d. n. page. Web. 5 Oct. 2011. <http://site.covestor.com/invest/wealth>.

[5] "Share" Covestor. n.d. n. page. Web. 5 Oct. 2011. <http://site.covestor.com/share>.