Online Community Provides Investment Transparency

Successful investing is about two things: having access to good information and making smart choices based on that information. To that end, E*TRADE recently launched an online community that marries the evolution of social media with consumer investing. The E*TRADE Community, which

launched February to E*TRADE’s full customer base,

enables investors to share their own investing knowledge with others.

“People have opinions of their own and they want to bounce ideas off each other and off people who have similar investment objectives as they do,” explains Bonnie Van Dyke, director of product management for E*TRADE. “They want to communicate with investors who have been through the same life stages that perhaps they’re going through right now.”

For investors in search of information and opinions, the E*TRADE Community pulls all those elements together.

Van Dyke explains that E*TRADE customers do not need to become members of the Community to read the postings and opinions of other members, but they do need to complete a short three-step sign-up process in order to post their own content or participate in polls. Thus far, more than 11,000 E*TRADE customers have signed on as Community members.

As a member of the Community, individuals can gauge real-time Community sentiment on the markets, whether bearish or bullish, and see which stocks are the most widely held and/or actively traded among top performing Community members. For example, the 25 stocks that are the most actively traded among E*TRADE customers are listed by total volume, as well as buy volume versus sell volume. Members can also participate in community discussions regarding a specific stock.

There’s a Most Widely Held feature, which shows the top 25 stocks held among customer accounts. According to Van Dyke, GE is held within 9% of the site’s brokerage accounts, but the most widely held is CitiGroup, which is held within 13% of accounts.

“The thinking is people may get investment ideas by looking at these different lists, because they’re able to see what other members are buying and selling,” Van Dyke says.

There’s also a listing of top performing community members — those individuals who have the highest year-to-date account performance. Community members can view these individuals’ actual portfolio holdings.

“It provides members with an added level of transparency that a lot of other communities don’t offer,” Van Dyke says.

Within the Community is a Most Popular Discussions module. There are discussion boards set up for each stock on the S&P 500, as well as some more general topic-based boards. E*TRADE controls what discussion boards are created, but solicits input from members on the creation of new boards.

“You can read the post and see who posted it,” she explains. “And anywhere you see a hyperlink you can drill down. You can click on a member’s ID and actually look at the member’s profile.”

These profiles are not unlike the profiles set up on social media sites like Facebook. Information contained in a profile might include a member’s investment objective, as well as their years of investing experience, whether it be in stocks and mutual funds, or options and ETFs.

“What I can also do as a member is share certain account specific information,” Van Dyke says. “I can share my trading activity, portfolio performance, which would be plotted against the rest of the community, so others can see how I’m performing relative to other members. As a member, I can choose to share as much or as little information as I want. The only caveat is if you want to be considered a top performer, you have to be willing to share your portfolio and account performance.”

Through the Community Connections module, members can follow other members and, predictably, Van Dyke has noticed that people are following top performers. When members are following others they can filter their home pages to display activity only by those they follow.

Van Dyke says that a key addition planned for the Community in the future is giving members the ability to assemble a mini-community, such as one comprised only of physicians.

“We want to give members the ability to create groups and invite other members to join those groups,” she says. “They have something in common, and that’s the point of this Community. You want to find the people who are like you.”

Key featuresTime for discussion