Tuesday, May 25, 2010

Eharmony


eHarmony is an online dating website which matches men and women with other singles. In addition to singles matching, eHarmony operates eHarmony Labs, a relationship research facility, and publishes eHarmony Advice, a growing relationship advice site. eHarmony, which was launched on August 22, 2000, is based in Pasadena, CA and has operations in the U.S., Australia, Canada and the U.K. The company is privately-held, with investors that include Technology Crossover Ventures, Sequoia Capital and Fayez Sarofim & Co. 



Morningstar Meets eHarmony
Does the world need another mutual-fund screener? Not if it behaves like all the others. But if it has some fresh ways of looking at investments, can show you what is missing in your portfolio and soon will let you screen for stocks and exchange-traded funds, then maybe it's worth a shot.

Jemstep is an engine designed to match an investor's preferences to possible investments. The underlying idea is to combine objective analysis, using a proprietary ranking engine, with personalized recommendations.

"We think of it as Morningstar meets eHarmony," says Chief Operating Officer Kevin Cimring.

Most investors using screeners must select attributes that require a certain level of sophistication, such as specific financial ratios and growth rates. The Jemstep approach is very different. Users may come to the site not really knowing what is best for them. So the Jemstep engine walks them through a process that essentially says, "Tell us a little about yourself and we'll show you what's best."

When you sign up for Jemstep, you are asked a few questions about your investing style and when you expect to need the money. The system's algorithm takes over from there. You can answer a wide range of questions, which will give you more personalized results, or just a few, which offers just a start. Setting up your full profile includes questions about your tax rate and types of holdings you prefer (domestic or international, stock or bond fund, etc.).

In meantime, the system analyzes more than 100 attributes of each possible investment -- such as volatility, returns and costs -- and then weights each variable based on the investor's preferences. The 10 most appropriate funds, plus any that the user may have specified, are displayed with a "Jemscore," which shows the fit for that particular user, expressed as a percentage (up to 100%).

At present, the Jemstep engine compares 18,000 funds.

Jemstep is just now entering a public beta-test phase, so you can check it out and help the developers kick the tires. It's free; in the long run, Jemstep plans to generate revenue by providing leads to online brokers and other financial Websites. The idea is to keep the site free for investors.

Cimring says the next step will be portfolio assessment and asset allocation. A user will be able to establish an asset-allocation target for the portfolio. If it's over- or underweight in certain areas, Jemstep will recommend specific funds to meet that target. "Down the line, it will be a very powerful asset-allocation tool," Cimring says.

Simon Roy, executive vice president of corporate development, says the company is working on additional tools that will help investors rebalance their holdings. In the future, Jemstep will include account-aggregation services, such as those you would find at Mint.com. You would then be able to use the Jemstep ranking engine to decide which stocks/funds to add to, and which to sell.

Roy says, "We're trying to close the loop to offer some guidance. We'll hold their hand through that process. An allocation only helps you if you act on it and stick with it." Jemstep is a registered investment advisor.

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