- Review: Openfolio
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Despite the name, Openfolio is not a standard web-based investment platform or robo advisor. It’s something closer to Wall Street meets Twitter, and produces a compelling social media sharing site for the investment crowd. Will it help you to become a better investor? When you see some of the people participating on the site you just might become a believer.
Called the Yelp of online investing, Openfolio believes a single share can change everything, and aims to help investors compare themselves to other investors in the market.
It seems similar to LikeFolio in how it operates and uses social media to view a comparison of your investments.
What is Openfolio?
According to their website;
“Openfolio brings the principles and power of social networks — openness, connectivity, collective intelligence — to the world of personal investing.”
Openness is the key, and the reason why the word “open” is included in the title. It’s a site where investors come to share investment information, ideas, and results.
The site is set up much like Twitter by format, in that it works with a continuous feed of member participation. There’s even a “Follow” button on each profile that appears, much as you would find on Twitter.
It’s based on the idea that in an open culture, where people freely share ideas and insights, everyone succeeds. The founders of the site decided to create a platform that facilitates exactly this type of exchange.
Their overriding belief…
“…is based on the simple idea that people will share their portfolios, in percentage terms, within their networks. Openfolio is a place where investors share insights and ideas, and watch how others put them into action. We all learn from each other’s successes (and mistakes).”
Just as is the case with the social media, people will always be willing to share their stories, (and particularly their successes) with others. And so far, according to Openfolio, that assumption is absolutely correct.
It’s important to understand that Openfolio is not a portfolio management service, nor does it function as any sort of trading platform. It is strictly a site where investors share ideas.
How Does Openfolio Work?
By joining Openfolio you give the people in your network visibility into the activity of your portfolio. The dollar amounts in your portfolio never appear, but rather the percentages you have invested in various asset classes, including stocks, mutual funds, bonds and ETFs.
The site will report the percentage of your portfolio that’s held in each asset class, as well as what you’re buying and selling. People will know what you’re buying and selling, just not the dollar amounts.
If that sounds as if you‘re compromising your own investment privacy, the payoff is that you will have access to the same information of every other investor who participates on the site. The concept is that you’ll gain access to the real world investment habits of people on the site, and more particularly of people who are in certain networks that you choose to associate with.
Additionally, if you’re one of the top investors on the site, your success will be highlighted. But you can always opt out and stay completely private. In that way you’re merely following the activity of others, rather than contributing your own results to the group.
When you sign up for Openfolio, it’s completely free. You provide certain personal information, and could also link one or more of your investments brokerage accounts within the site. Again, this doesn’t enable you to trade on the site, but rather to provide a profile of your portfolio allocations, as well as your recent investment activity.
The site is both interesting and simple by its layout. From the Explore Tab you can choose the people who you will follow. You can do this with the following options:
- Select People, such as George Soros or Warren Buffet (yes, they’re on the site)
- Select Topics, such as Pharmaceuticals, Crypto-currencies, or Technology
- Select Stocks, which also includes activity under mutual funds and ETFs
- Select Groups, based on Schools, Demographics, or Industries
These choices enable you to pinpoint the networks you want to follow and participate in.
Using “Select Stocks” you can zero in on the activity taking place in a given security by people on the site.
Let’s use an ETF example of the Vanguard Total Stock Market. The screen provides Highlights, Owners (within Openfolio), Activity and News related to the ETF. That will enable you to follow exactly what others are doing, and to participate in related discussions.
Openfolio benchmarks your performance against your network, the markets, and groups of users. Once you’ve logged in, your performance will updated in real time.
You can also follow the portfolios of investors outside your network, or have access to the portfolio allocations of famous, follow-able investors like Warren Buffett and Carl Icahn, whose portfolios are captured and then deconstructed by the Openfolio team.
You also have the option to make your profile private so only the people who you approve will have access to it.
Join Openfolio to follow the stocks, funds, and investors you’re most interested in, and see what other investors are sharing. There’s nothing to buy, since no one is trying to sell you anything. And that’s an important point, since it’s believed by the founders of Openfolio that much of the information passing in the investment media is slanted by people trying to sell you something.
The primary focus of Openfolio is access to investing information and results provided by the participants on the site. The site also offers certain other features.
Bank level security. The site uses 256-bit SSL encryption for all information transfers, the same security measures used for online banking.
Safely-stored brokerage information. All of the information is secured by a third party that’s kept the financial information of 40 million customers safe for more than a decade. And of course, you have the option to not link any brokerage account information to the site at all.
Read only connection. Essentially, no one can trade, withdraw funds, or transfer money from your account.
Openfolio is completely free. There are no fees to join, and no maintenance fees. It doesn’t look as if the site or anyone on it is trying to sell you any products or services.
Huge depository of investment information. There are over 25,000 individual pages on Openfolio, one for every U.S. stock, ETF, mutual fund, and closed-end fund known by the site. And if they missed any, you can let them know and they’ll get working on it.
It’s hard to knock a site that offers an open exchange of investment ideas, strategies, and portfolio positions. Openfolio is taking what’s working in social media and applying it to investments. When you have people like Warren Buffett sharing their investment information, it’s a virtual no-brainer.
Since the site is free to join, and completely voluntary to participate in, it’s worth spending some time on it on a regular basis.
You can always get recommended information from the financial media, but Openfolio offers you a way to see what people are actually doing, and that may be the best investment information of all.