Better Ways to Build Wealth on the Web

New sites feature expanded data, new approaches, and a chance to share insights with other investors

by David Bogoslaw

There are a huge number of investing-related Web sites that people can go to for advice and ideas, but many of them are not worth your while. It takes time—and a fair amount of digging—to get a sense of the usefulness and accuracy of the information that these sites provide.

With all those choices, where should an investor turn first? For those short on time or patience, BusinessWeek has some ideas to get you started.

Online tools for investors come in three major categories: investment advice, investor education, and investment planning of the sort offered by most online brokerage firms. For advice, investors are increasingly gravitating toward investing communities that allow their members to track the actual performance of each other's portfolios and verify that members are recommending stocks and other assets they really own and strategies they are really using.

Moving to Better Sites

Many investors, frustrated with what they call a low level of conversation on popular sites such as Yahoo Finance, have migrated to better-monitored sites like ValueForum.com, where, for an annual fee, they say they get a more sophisticated exchange of ideas and a closer sense of community and mutual support.

Craig Jennings, a former cabinet maker and kitchen designer in Gilmanton, N.H., was one of the 200 people ValueForum initially invited to pay a flat fee for a lifetime membership. Although he has been investing for 16 years, he says the returns he made in mutual funds for most of that time don't compare with the gains he's had in the six years since he joined ValueForum, ranging from 22% in 2005 to a peak of 158% in 2003. Like many ValueForum members, he spends an average of 40 hours a week doing research on stocks. His portfolio is now worth roughly $1 million, most of which he credits to advice from ValueForum members.

Online discount brokers such as TradeKing, which combine trading capabilities with online investing community features, are also beefing up their platforms with new offerings. In March, TradeKing introduced an All-Star Commentary by a couple of trading experts who regularly analyze different members' trades, drawing out lessons that can help all of the community members improve their understanding of how certain transactions like options work.

Expanding the Conversation

A big part of the allure of these sites is their collaborative aspect, which tends to encourage broader participation and expand the conversation and the potential for more diverse input.

Wikinvest is a classic example. Like other Wiki sites, this one, launched last October by two former Harvard roommates, is set up to allow users to create content and edit existing entries. The sense of an enduring single document, as opposed to the posts on sites such as Yahoo Finance that disappear off the page as more recent posts accumulate, encourages contributors to put more thought and care into the content they post, say founders Parker Conrad and Mike Sha.

And unlike most finance portals, which are organized around ticker symbols and individual companies, Wikinvest allows users to research a concept, which Sha believes is a more natural way to think about investing.

Digging Deeper with Wikinvest

Someone pulling up an article on aging baby boomers, for example, can see the various industries and individual companies likely to benefit as this disproportionately large segment of the U.S. population hits retirement age—from cruise-ship operators to pharmaceutical manufacturers.