When many of us think of web 2.0, we think of mainstream social network communities like Facebook and Myspace, or even vertical networks like AllRecipes for food and LinkedIn for business. However, one area that we may not often think of is investing and the social networks that revolve around the stock market. Despite the fact that more than 50 social investing sites currently exist today, only a handful is achieving tangible success. Below, we take a closer look at some of those companies that are leading this relatively new frontier.
COVESTOR

Previously only a reciprocal relationship where members had to share stock information in order to see the information from others, Covestor recently announced that any user, regardless of whether he or she shared their stock information with the site, would be able to track live trades of their self-directed investors. The Covestor community is one that centers around these experienced investors, and serves as a learning environment with professional grade tools where users are able to monitor their progress and inevitably build their investment reputations. An interesting feature comes in the form of a premium fee paid to users with the best stock picks on the site by members who wish to invest alongside them. As far as looks are concerned, the site has a clean and intuitive interface that brings a fresh approach to a typically conservative realm.
CAKE

Bringing people together through common investments is the main idea of Cake, another social investing site that allows users to track the performance of others and receive notifications if there is activity in their portfolios. However, with Cake, users build a network of trust with friends, family and other investors where rankings can help them decide who they wish to follow. In addition, Cake allows users to import data from multiple brokerage accounts and grants access to view historical portfolio data to help users make the best investment decisions. Cake has a simple clean interface that favors graphics for text; however, its bland appearance leaves something to be desired.
ZECCO

With a name that stands for “Zero Commission Costs”, Zecco prides itself on offering excellent customer service, including 10 free stock trades per month. To replace commission costs, Zecco earns revenue from interest earned on account balances of its members, charges from special services, advertising, and cross-selling products with other financial-minded institutions. Zeccoshare is the name of their investment community where, like some other sites, users can share their real portfolios and trades on individual profile pages, join discussions in forums and groups, post blogs, communicate with other users directly, and compare member performance. With a hip, irreverent attitude and a clean, intuitive interface, Zecco looks to be the voice of the ‘new school’ of investing.
SOCIAL PICKS

With SocialPicks, the stock market really is a game—a social, fantasy stock-market investment game where users pick the companies they expect to perform well on the market. Then, based on their predictions, they receive a ranking that allows others to know how they measure up in terms of their investment decisions. The site’s appearance is not dissimilar to Covestor—white and clean, but not really inviting.
UPDOWN
UpDown, another fantasy stock market game, is unique in the sense that it is the only free investment platform that allows members to earn money with zero risk of financial loss. Users do so when they ‘out-trade’ the major stock indices using the $1 million they are given in fantasy money to play. The goal for the founders is to cultivate the right mix of online members in order to obtain the data they’ll need to run a multi-billion dollar fund capable of ‘outdoing’ the markets. With the site’s social networking features, users also improve investment skills through collaboration to get them ready for when they decide to try out their investing skills in the real world.
VESTOPIA

Another site similar to Covestor (do we see a pattern here?), Vestopia allows users to track the investments of trading veterans, including some from Wall Street. Although there are few investors to track, the site claims that their sources are ‘more credible’ with profiles replete with histories of experience and success. Users can even interact with these pros via blogs, videos and live chat. Like some others, Vestopia’s appearance is bland and conservative with no sort of interactive appeal.
ZIGNALS

As the latest entry into the social investing space, Zignals takes a slightly different approach from the rest. It lets individual investors set up a bunch of rules and conditions that make it easier for them to invest in a stock or sell it at the optimal time. The decision-support tools come with access to a financially-savvy investor community where users can get advice. The rules, which are the main differentiating factors from other sites, allow investors to set up strategies such as “buy this stock if the price falls below $25 and the price of its rival rises above $35.” Zignals sends alerts to the users’ devices — PC, cell phone, pager etc. — when triggering events occur so that the investor doesn’t have to stay glued to a screen. The site is clean and relies on colorful visuals to communicate offerings—a stark difference to many other profiled sites.
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By no means an exhaustive list of all the category players, the aforementioned sites illustrate the present ‘standards’ of the social investing marketplace, such as ranking, tracking performance, etc., as well as the ‘extras’ that make each service unique. As a general observation for the evolution of this space, the real opportunities lie in the following:
• Improving design: The majority of social investment networks are, for lack of a better term, vanilla. They are plain, conservative and far from truly interactive. There is an amazing opportunity for a site to differentiate itself by making the social investment experience fun through an intuitive, yet interactive design that is as revolutionary as social investing 2.0 is.
• Enhancing the learning experience: For the social networking investor, he/she is interested in the tracking functionalities that most of the sites offer in order to measure his/her successes or failures and learn what to avoid in the future. Companies can tailor education to specific users and offer peer-generated, pro-generated and / or site-generated suggestions.
• Automation: As we have seen with sites like Cake, users appreciate alerts to notify them of activity within their portfolios, and Zignals takes this a step further with alerts based on pre-set rules. Automation like this is a great opportunity for social investing sites because today’s investors don’t want to rely on being near a computer screen to manage their investments.
• Fostering reassurance: It is no secret that people feel more comfortable doing something if other people are doing it, and when you’re dealing with stocks, following the crowd helps the majority feel at ease with their decisions. If they don’t already, social investment companies should allow users to see who is doing what in relation to the stocks they own, perhaps not on an individual basis, but maybe an overall activity graph—just a way to reassure investors about their decision.