Since this week is such a low volume week, we gotta take it with a grain of salt. I want to take a little bit of time to just talk a little bit about Covestor. I think it is the future of where we're headed. It's about transparency and your (audited) results there speaks louder than anything that could come out of your mouth. Some people there, because of their impressive audited trading results, will end up making a big name for themselves. When you produce results, it will add more weight to what you say regarding trading and the stock market. Every blog owner should join, and all blog owners will eventually need to join. Why? Because if you don't, it could mean even if you have the best charts and recommendations on your blog, you yourself may actually be a losing trader. If you can't even trade yourself above water, what does it mean to all your followers? That's not to say you must be in the green at all times when you're at Covestor, because the stock market is really a long term game and long term results is what really matters. Covestor is only one year old, so the hot hands you see today at the top of the list may not be as hot when the results get tabulated for, say, 5 years. Still, it makes sense to let your audience know how you're doing generally.
Covestor does have some issues, however, that probably needs to be addressed. One major one I find is that it doesn't consider cash at hand in their calculations. So if you make one trade on one stock only, for instance, with 10% of your money, Covestor sees it as though you put in 100% of your money. This gives successful penny stock players somewhat of an unfair advantage in the rankings, if anyone cares about rankings at all. In real world situations, a trader can put in 100% of his money into something like GOOG (actually, that is quite typical if you're trading GOOG), but rarely does anyone put 100% of their trading account in one (or even two or three) penny stocks. Yet, this is how Covestor makes the calculations. The nature of penny stocks is that they move much more percentage-wise than bigger stocks. This is the reason many of the good penny stock players are way up in the rankings, with massive annualized returns. I'm sure Covestor is on its way of making changes to this by considering cash positions.
Despite some issues, sites like Covestor.com will keep on growing, because in this industry transparency is a good thing.
What do you think? Are you in?
