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Tuesday, 27 November 2007

Tracking Stock Trades with Covestor

Some of you may have noticed the new Covestor widget in my sidebar - it's tracking the performance of my "Little Book That Beats The Market" portfolio of US stocks vs. the S&P500 index. I came across this widget when I was reading Timothy Sykes' blog. He is using it to provide an independently verified record of his stock trades while he attempts to replicate his original claim to fame - building up $12,415 of Bar Mitzvah Gift money into $1.65 million from 1999 to 2002 through small stock trading (mainly short selling).

I'm not an active trader - even my US stock portfolio is based on buying a stock and holding it for at least 12 months before selling it and buying a replacement from the current short-list of prospects. So tracking my trades through Covestor is a bit of overkill. However, it does provide interesting information about trading performance, risk adjusted return and so on.

I may also track my Australian stock portfolios using Covestor as they seem to be setup to handle data from various stock brokers around the world. I setup my account to track the US stocks I trade via Comsec-Pershing. You can choose to enter your initial portfolio and track future trades either automatically (by providing your account login details) or 'manually' by sending a file of your latest brokerage statment and then sending in updates for future trading activity. Since Pershing didn't seem to be included on the list of brokers I'm updating this account manually. When I setup another account to track one of my Australian brokerage accounts I may try the automated method and see how well it works.

Unfortunately you have to setup a new account (using a different email address for verification) for each individual brokerage account - it would be a lot easier if you were able to setup "sub accounts" instead. Covestor also provides ranking tables showing how well the Covestor members are performing, and you can track your favourite traders, get updates of when they make new trades, and read what comments that have made about each trade. In the longer term Covestor hopes to charge membership fees for people to be able to track successdul investors, and will pass on a percentage of these fees to the members being tracked. I doubt anyone would pay to see details of my investing activities, but active traders like Timothy may attract a day-trading fan club over time.

Copyright Enough Wealth 2007

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