4 ms·

I've been thinking the same. Are there any consumer-oriented products that lets you pick your own index? As in: you select the stocks and their proportion and

by olau 9y ago

I've been thinking the same. Are there any consumer-oriented products that lets you pick your own index? As in: you select the stocks and their proportion and supply the money/demand money out, and stocks are then bought/sold automatically? Say I want to follow index X, but I don't want stocks in oil or coal companies because I believe they're going to die before I need the money out. There doesn't seem to me to be an easy way to build that customized index. I guess you need a low-fee stock broker and an algorithm that's aware of the fees for this to not end up drowning in fees.

jopsen 9y ago
Robinhood let's you trade for free, and quantopian.com provides a python based platform for automated trading with support for robinhood. Have fun,
- olau 9y ago
  It does sound fun, but apparently I'm still in the wrong country for Robinhood. And to be honest, in this case I would trade some fun for something with a GUI. :)
  - kbutler 9y ago
    Robinhood's primary interface is a mobile app with a GUI. Not great for research, but functional to buy/sell.
- digikata 9y ago
  How are they sustaining that free trading? If it's on VC money, then I worry what exactly happens to shares if the firm shuts down. Who is actually holding the shares becomes a critical question in that circumstance. Edit: I see a $110M Series C in April '17 reported for Robinhood.
  - mi100hael 9y ago
    You can pay like $10 a month for their "Gold" offering. Gets you margin (which also nets them some money) & after-hours trading.
    - paulpauper 9y ago
      Except for margin trading, robinhood is a great deal. Many of these regular discount brokers are committing high way robbery in terms of the fees. TC Ameritrade is the worst in this regard. I hope robbinhood puts them out of business or at least takes away a large chunk of their market share.
tanderson92 9y ago
Here's the wonderful Michael Kitces with a great blog post on this idea: https://www.kitces.com/blog/indexing-2-0-how-declining-transaction-costs-and-robo-indexing-could-disintermediate-index-mutual-funds-and-etfs/ https://www.kitces.com/blog/indexing-2-0-how-declining-trans...
chias 9y ago
That doesn't really work very easily. Index funds can operate the way they do because a lot of people buy into the same fund. When you buy and sell shares in the "real" market, you do so in whole numbers. If you're going to construct an index fund just for you, the smallest amount of any stock you can buy is 1, so you'd need an enormous capital investment: if you want e.g. 1% of your fund to be Google (currently trading at $934), and assuming all the share prices work out just right -- in practice, they won't -- your smallest unit of investment would be $93,400. In practice, the closest approximation of what you describe is just having a passive portfolio: pick a bunch of stocks, buy them, and then don't look at them again.
oh_sigh 9y ago
motifinvesting.com sort of gets you there, e.g. a 'socially responsible' fund: https://www.motifinvesting.com/motifs/socially-responsible https://www.motifinvesting.com/motifs/socially-responsible
kbutler 9y ago
This can be done with an account like "sharebuilder" https://www.capitaloneinvesting.com/a/main/Education/KnowledgeCenter/how-does-the-sharebuilder-plan-work https://www.capitaloneinvesting.com/a/main/Education/Knowled... Basically, you determine the dollar amount you want to spend on each stock, and the plan purchases that amount, including fractional shares. I don't think they do the same for selling.
tacostakohashi 9y ago
There are sector ETFs for sectors of the major indices, e.g.: http://www.sectorspdr.com/sectorspdr/ http://www.sectorspdr.com/sectorspdr/ So, you can either: 1) Buy all the sector ETFs (XLY, XLP, XLF, XLV, XLI, XLB, XLRE, XLK, XLU) except for the energy sector (XLE) 2) Buy the SPY, short sell XLE. Different tickers apply for iShares, or other indicies / sectors, but you get the idea - it's easy enough to focus on specific sectors using a mixture of ETFs.

by olau 9y ago

jopsen 9y ago

Robinhood let's you trade for free, and quantopian.com provides a python based platform for automated trading with support for robinhood. Have fun,

olau 9y ago
It does sound fun, but apparently I'm still in the wrong country for Robinhood. And to be honest, in this case I would trade some fun for something with a GUI. :)
- kbutler 9y ago
  Robinhood's primary interface is a mobile app with a GUI. Not great for research, but functional to buy/sell.
digikata 9y ago
How are they sustaining that free trading? If it's on VC money, then I worry what exactly happens to shares if the firm shuts down. Who is actually holding the shares becomes a critical question in that circumstance. Edit: I see a $110M Series C in April '17 reported for Robinhood.
- mi100hael 9y ago
  You can pay like $10 a month for their "Gold" offering. Gets you margin (which also nets them some money) & after-hours trading.
  - paulpauper 9y ago
    Except for margin trading, robinhood is a great deal. Many of these regular discount brokers are committing high way robbery in terms of the fees. TC Ameritrade is the worst in this regard. I hope robbinhood puts them out of business or at least takes away a large chunk of their market share.

tanderson92 9y ago

Here's the wonderful Michael Kitces with a great blog post on this idea: https://www.kitces.com/blog/indexing-2-0-how-declining-transaction-costs-and-robo-indexing-could-disintermediate-index-mutual-funds-and-etfs/ https://www.kitces.com/blog/indexing-2-0-how-declining-trans...

chias 9y ago

That doesn't really work very easily. Index funds can operate the way they do because a lot of people buy into the same fund. When you buy and sell shares in the "real" market, you do so in whole numbers. If you're going to construct an index fund just for you, the smallest amount of any stock you can buy is 1, so you'd need an enormous capital investment: if you want e.g. 1% of your fund to be Google (currently trading at $934), and assuming all the share prices work out just right -- in practice, they won't -- your smallest unit of investment would be $93,400. In practice, the closest approximation of what you describe is just having a passive portfolio: pick a bunch of stocks, buy them, and then don't look at them again.

oh_sigh 9y ago

motifinvesting.com sort of gets you there, e.g. a 'socially responsible' fund: https://www.motifinvesting.com/motifs/socially-responsible https://www.motifinvesting.com/motifs/socially-responsible

kbutler 9y ago

This can be done with an account like "sharebuilder" https://www.capitaloneinvesting.com/a/main/Education/KnowledgeCenter/how-does-the-sharebuilder-plan-work https://www.capitaloneinvesting.com/a/main/Education/Knowled... Basically, you determine the dollar amount you want to spend on each stock, and the plan purchases that amount, including fractional shares. I don't think they do the same for selling.

tacostakohashi 9y ago

There are sector ETFs for sectors of the major indices, e.g.: http://www.sectorspdr.com/sectorspdr/ http://www.sectorspdr.com/sectorspdr/ So, you can either: 1) Buy all the sector ETFs (XLY, XLP, XLF, XLV, XLI, XLB, XLRE, XLK, XLU) except for the energy sector (XLE) 2) Buy the SPY, short sell XLE. Different tickers apply for iShares, or other indicies / sectors, but you get the idea - it's easy enough to focus on specific sectors using a mixture of ETFs.