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Launch HN: Enombic (YC S20) – Create your own stock indexes

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Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#41

Post by _eb13 »

aliquotchris wrote: post #18
nirushiv wrote: post #11

This looks awesome! Congrats on the launch. For a financial product like this, what does your tech stack look like? Do you use off the shelf databases to store account balances for example, or is there specialized tech for that? or does the brokerage handle that? How do you approach security? I’m guessing a lot of work went into it, but some details would be great for a curious customer like me :)

Hey, thanks for taking a look! Great questions, we take security and data seriously. All communication is encrypted end to end (of course), but we also ensure data at rest is encrypted, using KMS & RDS. Brokerages handle your account based information, but we generate additional data around your investments to help give you a richer picture into your portfolio performance. One particularly fun part of our data struct…

timescaledb <3

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#42

Post by endisneigh »

If and when you become huge one interesting thing you might consider (if legal) is to become very liquid and actually allow users to trade stocks directly without selling to minimize tax.

For example, if AMC is $1 and GME is $1, instead of buying the stocks directly we pay you $1.001 for both and you basically hold the stock for us. If we sell you sell the stock on our behalf and give us the cash and handle the tax forms.

However, if we wanted more GME and GME's price fell in half to $0.50 and AMC's price doubled, the new prices are GME: $0.50 and AMC: $2. It would be awesome if we could "trade" our AMC for 4 more GME without having to pay the gains on the $1 we earned on AMC.

Obviously you can only delay so much under this scheme, but I'd be willing to pay a slight commission if you could facilitate a scheme legally to minimize the tax burden of trading.

Like Robinhood making commission-free trades mainstream, if you can popularize this that would be good - sometimes if you're holding a very popular bubble stock you don't necessary want to cash out for cash and want to directly trade it for another stock without selling. Unfortunately what I'm describing would require crazy volume to be worth the implementation effort, but it's worth thinking about!

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#43

Post by mkrishnan »

_eb13 wrote: post #39
CapriciousCptl wrote: post #34

How is this for tax efficiency? Is rebalancing a taxable event? Or can you rebalance without selling by just redirecting new contributions to the underrepresented issues? Over time a buy-and-hold strategy with etfs gives a large compounding bonus since taxes are deferred.

We're exploring several rebalancing models at the moment (calendar rebalancing, constant proportion rebalancing, as well as only rebalancing with new contributions), and trying to understand which folks are more interested in. Which would you be most interested in? Definitely want to mitigate tax burden. Additionally, the direct indexing model does allow for more flexibility around loss-harvesting.

so re-balancing IS a taxable event right?

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#44

Post by doggosphere »

bww wrote: post #28
_eb13 wrote: post #20

Earlier quoted context omitted.

Thanks for your feedback! If you want to stick to more traditional indexing approaches, that’s supported. For example, one user has stayed very close to VTI, but made some modifications to customize VTI to her goals and existing portfolio ( https://enombic.com/abby/VTI-15 ). We also have some users who want an easier way to automate their investments into a classic Vanguard basket ( https://enombic.com/aml/lazy ). Ev…

I think OP's concern (which I don't necessarily share, but which I think is valid) is that indexes are generally considered to be relatively safe investments but if you're personally choosing the securities in the "index" you're essentially just choosing individual stocks, which is generally considered to be a bad idea for most people. So it could be argued that you're essentially presenting choosing individual stock…

Who cares? We put warning labels on cigarettes, we even tax them to offset the social cost of the badness of them. But we still have the freedom to consume them if we so choose.

Risky investments are the same. We don't need overbearing protectionist policies other than to ensure people aren't being outright cheated/scammed.

If the kids want to YOLO GME, who are we to say otherwise.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#47

Post by aliquotchris »

alexeldeib wrote: post #32
aliquotchris wrote: post #5

Earlier quoted context omitted.

Thanks! Yes we're looking forward to getting more content on the landing page soon. For now, all the links above are public pages, so you can explore those to see some of our features. We are currently the latter; we're powered by existing brokerages, but are working to become our own.

Would you consider expanding into e.g. derivatives? I was thinking a lot about this idea lately. An API/programmatic-first brokerage/trading platform. Let people design automated trading strategies on top of solid APIs, and use your site for visualization/planning. OptionAlpha seems to get into this but not nearly far enough. Latency wouldn't be critical either for retail investing. I don't really understand why it d…

Hey, thanks for checking us out. We want to get the UX right first with our existing feature set, and then consider expanding to more advanced things such as derivatives or options. We'll keep your request in mind!

Also agree, re: API tooling. We'd love to find folks who want to write code against our API. Is that something you'd use?

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#48

Post by eximius »

mkrishnan wrote: post #43
_eb13 wrote: post #39

Earlier quoted context omitted.

We're exploring several rebalancing models at the moment (calendar rebalancing, constant proportion rebalancing, as well as only rebalancing with new contributions), and trying to understand which folks are more interested in. Which would you be most interested in? Definitely want to mitigate tax burden. Additionally, the direct indexing model does allow for more flexibility around loss-harvesting.

so re-balancing IS a taxable event right?

It CAN be. It depends how you rebalance.

If your target is 50/50 and one stock goes up, you can either sell that stock or buy more of the other one. Only one of those models is a taxable event.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#50

Post by _eb13 »

corry wrote: post #31

Love this idea. For the folks in the comments so far who are uncomfortable with the combination of "index" and "picking stocks", I think that's unfair. This is obviously a service for relatively sophisticated folks who (1) want ETFs that don't exist, or (2) want to make minor changes to existing ETFs, or (3) don't want to deal with the ETF fees/overheads for whatever reason (although presumably Enombic will have fees…

Thanks!

You nailed it. We are building for "prosumer" retail investors who have baseline proficiency around these ideas. Over time we'd want to make sure our platform is more generally accessible, wherein we would build out more in-app education.

Indeed, higher-risk sector-based indexing is a use case we're seeing a lot on the app (e.g. https://enombic.com/jake/crypto). Then, we're seeing folks couple decorrelated sector-based indexes into aggregate indexes (e.g. https://enombic.com/chris/main, this one is actually 50% Vanguard ETFs).

No Neo exchange yet, sorry. Do you know if it's possible to get exposure to psychedelic medicine in the US?

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