Find out what your friends invest in and copy – is that really the answer?

 

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Source: Open Folio Website

At Searchlight we do not give advice on investing in individual stocks and shares, but I thought it good to keep an eye on new developments! Interestingly, the most recent new development I found out about, is a start-up in America, called OpenFolio.

It was founded by two former Wall Street traders and lets you monitor your investment performance in relation to your peers. OpenFolio is a combination of a portfolio tracker and social network. It gleans demographic information from your Facebook accounts and Linked in profiles. The user will be able see the percentage a friend has invested in a market or compare their investments with different demographic groups.

Whilst it’s obvious something like this was going to come down the line -as the use of social networks grows- however, is a ‘Peer-to Peer’ approach to investing really a good idea? Investments are all about assessing your own level of risk and identifying plans, and investments that are right for you …not what’s right for your friend down the road! I can see that it’s really interesting stuff, and you can’t help being nosey and wanting to find out what other friends/colleagues have or even how you compare to other people who work in your industry.  But, I can’t stop thinking that perhaps this type of app may lead to people making some rash decisions based on ‘keeping up with the jones’.  I guess, it all really depends on how sophisticated it becomes and how much credence people really give the data available in the app. Let’s watch this space!

 

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