Investors should have heard plenty about the game-changing potential of social networking companies by now. After all, many have come out of nowhere to command stratospheric price tag in a matter of years.

Facebook, for example, was recently valued at $50 billion, while social network for professionals LinkedIn recently garnered a $3 billion price tag on private secondary exchanges.

But other startups are trying to let investors tap into the power of social networks even more directly. Covestor, for example, lets its users easily mirror the portfolios of other successful investors.

More Transparency, Lower Costs

On the other hand, investors who want to showcase the stock-picking work they've done and build up their portfolios can use the technology to earn a following and get compensated in the process.

Covestor aims to bring transparency and reduce costs, founder and Chief Operating Officer Simon Veingard tells DailyFinance in a video interview. Those attributes have been sorely lacking in the financial industry.

Individual investors have long complained about hidden fees and mediocre performance. But the financial crisis led to an even greater clamor for accountability, says Veingard, and has further helped boost the company's prospects. For more on Covestor's strategy, see the video above.

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Those considering investing their money on Covestor should probably take a look at both and

Collective2 is well established and provides powerful investing tools. is a new site that seems very unique with a lot of potential.

June 01 2011 at 12:18 PM Report abuse rate up rate down Reply

Major Fraud Alert

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Bank of America violated the 21st Century Act: Final Amendments to Regulation CC Section:

seeking reimbursement of Credit, Loan, and Finance Balances as a "Bank Entity" and not a "Nonbank Consumer" as specified on Pages 85 and 86.

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May 29 2011 at 1:01 AM Report abuse rate up rate down Reply