One of the most striking phenomena of the pandemic has been the rise of retail investors, who have become smarter and more self-taught amid economic uncertainties and market volatility, in part thanks to new applications, such as Robinhood, social media including Reddit and even shares.
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Now, a relatively new social network – Commonstock – offers users “to amplify the knowledge of top investors, verified by real track records for signal over noise.”
Eric Pelnik, founding team of Commonstock, told GOBankingRates that the platform is there to make high quality investment knowledge accessible.
âWe amplify the ideas of top investors by allowing people to connect their brokerages and show what they’ve invested in (we never show dollar amounts, only% of portfolio). People created profile pages, wrote investment notes, created group discussions and linked billions of dollars to the platform, âhe says.
The platform’s website notes that Commonstock is not a brokerage house, but a social layer in addition to existing brokerage houses helping to create more engaged and informed investors.
âThe ability for anyone to prove they own Tesla or Peloton as a percentage and show their skin in the game, eliminates a lot of scammers who might say they had a 1000% return,â the CEO said and Commonstock founder David McDonough at CNBC. “There is no lie about it – you can see someone’s performance in real time.”
He added that memes stocks have played a huge role in educating investors over the past year. âIt sounds counterintuitive, but Roaring Kitty, AMC and GME have probably done more to educate a generation of people than any financial textbook and course before,â McDonough told CNBC.
âInvesting is now interesting and part of the social debate. “
The platform, which launched in August 2020, is growing rapidly and has brought together renowned investors. Earlier this week, the San Francisco-based company announced in a blog post on its website that it had raised $ 25 million. McDonough said strategic investors include Bill Ackman, Dan Loeb, Louis Bacon, Stanley Druckenmiller, Jimmy Dunne, Gavin Baker, Larry Fitzgerald, Ari Emanuel, Michael Ovitz, Li Jin, Jill Carlson, Turner Novak and Sahil Bloom, according to the blog . .
The first inspiration for Commonstock came when the CEO and founder graduated from college amid the recession and was looking for better ways to understand capital markets and improve investing by learning and talking with others. , a spokesperson told GOBankingRates.
âAt the time, there were major obstacles to access (trade was not free!) And to knowledge,â explains the spokesperson. âWhen Commonstock launched in beta in August of last year, the need for a platform that would surface signal over noise became even more acute – with the rise of retail investors in the midst of the pandemic. Increased participation appears to be here to stay, which is fantastic, but needs to be accompanied by increased access to knowledge. This partly explains why we have seen such a high demand for Commonstock. “
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In a thinly veiled mention of the Robinhood trading app, and to emphasize that Commonstock can be complementary to such apps, which in Robinhood’s case claims its mission is to “democratize finance,” Commonstock said on his website: âBrokerage firms have democratized investingâ¦ It’s time to democratize investment knowledge.
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This article originally appeared on GOBankingRates.com: Social Media Platform Boosts Rise of Retail Investors, Promises ‘Democratization of Knowledge’