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Instavest Review: Twitter Like Recommendation for Investing

Instavest Review: Twitter Like Recommendation for Investing


instavestHave you ever read an article urging you to buy an investment and all you can think of is whether the author even had the guts to put in any of her own money? I mean, the author certainly couldn't pass on an opportunity to make money if he actually believes his thesis right?

Another problem I wish could be fixed is to have the author always write about the same investment when it's time to sell. We over here at MoneyNing.com always recommend index funds, where you buy and hold the entire market forever. But for individual stocks, never selling just doesn't make sense because not every company has a business model that lasts forever because our world is always evolving.

Recently, I came across Instavest, a registered investment advisor that came up with an idea to fix this. In its basic form, Instavest, in partnership with a broker-dealer, lets you buy and sell investments like any other brokerage firm. But instead of just buying and selling, Instavest integrated a Twitter like following system to each buy and sell orders. The beauty of this addition is how you can read other people's reasons for buying a security, and seeing how many dollars she's already committed to that trade. You can then decide to follow that trade by committing your own money, and have Instavest either automatically sell your investment when the person you are following sells or simply alerts you through email when he gets out of the position. Either way, you are free to sell at anytime regardless of what anyone else does with their positions.

Following and Leading an investment

investment thesis
As you can see, you can easily see a leader's profile as well as his thesis for buying an investment. You can then pick the best ideas that resonate with you by investing alongside the leader. You can also see how much money the leader has invested along with the total number of investors that is following this idea, as well as the total investment amount committed by the entire community.

investment idea
On the other hand, you can recommend an investment idea to others by filling out a simple form in the platform. Along with your reasoning, enter the number of shares you'd like to purchase and you'll get a confirmation email as soon as the trade is executed. All ideas will then be curated to ensure accuracy/legibility, and posted for the community to see.

my investments
It goes without saying that you can simultaneously be a leader and a follower if you'd like. Once you have recommended a few stocks and followed others on purchases, you can easily see your holdings in the platform. You can also, at anytime, sell your position or add more shares.

A Tipping System

To add even more fun into the mix, Instavest will ask if you would like to share a part of your profit to the person you are following when the trade turns out positive.

This tipping like feature surprised me a bit, because I didn't think many people would tip that much – certainly not to the extent that the leader deserved for getting people into a profitable trade. But the team at Instavest said that the profit sharing are averaging 10% in their system. Followers tip lead investors because they want to continue incentivizing lead investors to post winning investments. This vitreous cycle leads me to believe that there's hope for humanity after all! :)

Pricing

Trades on Instavest are inexpensive – only $3.49 per equity trade. You should note though that Instavest uses Tradier Brokerage as the trading platform, so pricing will change if Tradier decides to adjust their fees.

What Do You Think?

Instavest's following system isn't groundbreaking but I would be lying if I said I was never influenced by well written commentary about certain stocks back in my equity trading days. The fact that they are tying the recommendations to people's real money and investments and letting you follow the moves is a good feature that can help you make some serious money. This feature will also help the real money making traders rise to the top and make some side income, as oppose to real performance losing out to eloquent writing.

If you currently get in and out of stock positions, then it's definitely worth a look to see if you get an edge through the service. If you are a passive investor that buys and holds index funds, Instavest can accommodate that too as ETF and Mutual Fund trading is also available. You, as an investor, are not limited to the equities being offered as ideas. You can buy and sell in your own account as you would in any other brokerage account.

Exclusive Offer for MoneyNing.com Readers

Instavest was good enough to send us an exclusive deal that's only available through this special link. When you sign up and fund an account with at least $1,000, your account will receive a bonus of $25 after 45 days, assuming the $1,000 remains in the account for the full 45 days. $25 doesn't sound like a ton of money but it's a nice little 30% annualized return for a $1,000 startup capital. Think of it as following my idea of the first profitable trade, and there's no need to tip me for this one! :)

 

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