Democratizing finance with Portfolios

TLDR: Portfolios intends to bring rebalancing software to retail investors. It’s a tool that allows investors to set tactical asset allocation targets while maintaining a hands-off and passive approach to investing.

People love to buy individual stocks and they love even more to make money. There’s a careful balance between trading, stock picking and parking money away for the long term. Its a fact that most businesses fail to beat the market yet we still buy stocks hoping to find those generational winners and wealth-generators.

There are many tools that investors have at their disposal, from commission free trading platforms to robo-advisors that handle all portfolio management duties.

Robo-advisors generate an optimal portfolio derived from asking a client their risk tolerances amongst other factors. The firm then automatically reinvests dividends, rebalances the portfolio and allocate new funds when they come in. It’s great for lots of investors who might not feel comfortable buying individual stocks on their own or investors who want a hands off approach, there are no minimums and it gets people investing – it’s fantastic.

Commission-free brokerages provide the infrastructure to investors who make all of the decisions on their own. Typically, there aren’t explicit fees per trade, instead they make a spread on the share price. This allows investors to own fractional shares, and reduces the minimums required to invest.

Introducing Portfolios.

Portfolios combines the infrastructure built by robo-advisors and commission-free brokers. It allows investors to delegate mundane portfolio management actions while maintaining control of the tactical allocations.

Inspiration

Part of my inspiration comes from the FinTwit community, where I often see people investing like the screenshots below.


There is nothing wrong with allocating like this, but in the context of one’s overall portfolio, allocating 10 shares which only accounts for 3.4% isn’t going to materially impact the value of the portfolio.

We also have the technology to eliminate the investor having to personally make a trade, there is no reason you have to do this anymore. Why should I have to think how many shares I can afford? Every dollar contributed should be invested, even cash towards a short-term ETF. I personally do this all the time, this stock costs $x and I have $x so I can get x number of shares. It should be – I have $X available to invest, and it’s all invested in the strategy I create beforehand.

This is what I want to eliminate, and with Portfolios we can make it happen.

How it would work:

  • Build your portfolio however you choose – with focus on a position’s weight in terms of the overall portfolio, not a monetary value per trade. No more worrying how many shares you can afford – it shouldn’t matter.
  • Take a 5% weight in Tesla? No problem.
  • Want to take that 15% position in Netflix down to 10%, then allocate 5% elsewhere. No problem.
  • Still want a large allocation to the autopilot platform? Easy – allocate 70% to Invest.
  • Have some extra cash ready to deploy? Transfer the money to your account and it’ll be automatically invested to all of your positions based on your specified criteria.
  • Dividends are automatically reinvested in the portfolio.
  • The portfolio is rebalanced at the frequency of the investor’s choosing, or a pre-defined time frame.
Built with React Native

Future Developments

  • With network effects, we can have a community were investors follow others that are already on the platform.
  • Copy others portfolio and make changes to suit your needs and interests.
  • Have a leaderboard based on performance.

I’d love to chat more about this idea, and build it with your team if applicable. The mockup was built with React Native. You can contact me at jaredflomen@gmail.com.

I am developing a Web application with React here.

Short form about me: background in Finance, pursing CFA designation & now I’m a software developer.

My resume can be found here

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