Companies that track successful stock pickers draw interest in choppy markets

NEW YORK — Larry Bellehumeur's investment advice isn't always that exciting, but he attracts curious onlookers — all part of a new wave of investors who have turned away from brokerage houses and mutual funds and rely instead on the Internet to help determine their investment plays.

Bellehumeur, who calls himself a mostly long-term investor, has gone public with his picks through a company that tracks what he trades and posts his moves online for others to see. While turning to the Internet in search of financial advice isn't new, some investors have increasingly been looking for new sources of guidance, including fellow investors like Bellehumeur, since uncertainty began lapping at Wall Street last year.

Bellehumeur is a member of Covestor, one of several companies that tout a what-they-trade-is-what-you-see philosophy to attract investors. By revealing each move that its marquee members make, the company and others like it hope to appeal to investors looking to sidestep advice dispensed by blogs, chat rooms and message boards.

Through the company's Web site, www.covestor.com, Bellehumeur receives questions from investors asking about his buy-and-hold investment philosophy and about his success in keeping ahead of the broader market. He said he has attracted both praise and doubts about his approach.

"It's boring," he said, likening himself to a Warren Buffet-style investor because of long-term view. "You're not going to be telling someone at a party about a stock when you're holding something for five years."

He gets questions about how he's down only 1.6 percent for the year when Standard & Poor's 500 index is off by about 6.5 percent. And over about two years, he's up about 42 percent. He said his portfolio has benefited because he's been able to find ideas from like-minded investors on the Covestor site.

"I definitely use it to gain access to stocks that I probably wouldn't have found on my own," he said.

Covestor and other companies like Vestopia, which tracks the moves and success of professional investors, have seen an increase in membership and the number of hits to their Web sites since volatility began pounding Wall Street last year. While such services are often free, the companies hope to charge eventually for some offerings.

"There are self-directed investors who always want to lord over their own positions and they've become more active and they feel a stronger need for information based on the volatility of the market," said Steve Markowitz, Vestopia's chairman and chief executive. "Volatile markets lead investors to seek information and guidance."

Vestopia — www.vestopia.com — relies on professional investors who have struck out on their own after gaining experience at places like Wall Street investment houses.

"What we're doing is allowing self-directed investors to look over the shoulders of Wall Street pros to see what they do in their own personal brokerage account with real money, in real time," said Markowitz.

Both Vestopia and Covestor will alert their members when a portfolio they are following makes a change. So if Bellehumeur decides to buy or sell an investment, those who have chosen to follow him can get nearly instantaneous notice of his decision.

But even with nearly instant access to the play book of a successful investor, there are still decisions to be made.

Bellehumeur, 36, sells communication equipment and is investing with an eye toward retiring in perhaps as soon as 15 years. Beyond his long-term bets, he dabbles with a small percentage of his portfolio in often volatile areas like currencies and gold. While they can be good in finite doses to help diversify a portfolio, these holdings could prove too jumpy for some investors.

Perry Blacher, co-founder and president of Covestor, said its members can swap investment ideas or search for investors to mimic in certain corners of the market. Someone lacking for ideas in the tech sector might examine the holdings of a successful investor in that space, for example.

"Our job is to hold these guys out, warts and all, and then make it easy for consumers to find those who best fit them," Blacher said.