Social Investing Site Covestor Is Now Open to the Public

Covestor, a social investing site where people share the performance of their real stock portfolios, came out of private beta this morning. Now anyone can join, and it is welcoming voyeurs who only want to watch other’s performance but not share their own. This should broaden the appeal of the site and provide a no-commitment entry point for people who may be uncomfortable with sharing their personal financial data on the Web (i.e., most of the population). President and co-founder Perry Blacher explains the company’s approach:

It was always in our plans. We had a Catch 22 up front where we had to create liquidity of leaders and so couldn’t start off by saying “Come and track the best investors you have never heard of,” because there would have been no one in the room.

We decided to start off by creating a high-barrier-to-entry community where you had to share to participate to build the base. The long term objective is really about building a mass follower proposition for the world’s best self-directed investors and to enable others to invest directly alongside them (de-insitutionalizing fund management) and that requires it all to be open and public.

You would be amazed by people’s willingness to share and the quality of the guys out there. For example, our average member’s portfolio size is greater than $200,000 in securities alone (excluding cash).

Blacher won’t say how many members signed up for the private beta or the total amount of investments the site is tracking. (Competitor Cake Financial is already well over $1 billion). But he does claim that the site’s members include more than ten times as many money managers than work for any professional investment firm (presumably tracking their personal portfolios) and people from more than 50 countries invested in more than 10,000 different stocks. He also estimates that ten percent of all stock bloggers have Covestor portfolios and says that the top 10 most followed investors have averaged a 123.5 percent return so far this year.

Other enhancements to the site include the ability to sort through members by investment goals or most recently viewed. And you can now import your contact list to make it easier to invite people to the site. The company raised $6.5 million last April from Union Square Ventures and Spark Capital. In addition to Cake Financial, it competes with SocialPicks, Vestopia, and Motley FoolCAPS.