Show HN: Double – Design and invest in your own stock index
Start by picking one or more strategies. You can find 20+ starting points in Double that vary from direct index versions of classic ETFs (like SPY) to strategies focused on specific industries, market trends, or themes (like YC public companies). You can also easily build your own grouping of stocks, and tilt your strategy towards or away from certain stocks or sectors.
Once you’ve chosen your portfolio, we run a daily portfolio optimization to determine what trades to make, which considers taxes, trading costs, drift and holding costs[1]. If your account is sufficiently diversified, we enable Tax Loss Harvesting as well to capture losses that can help offset capital gains[2]. Finally you can move between strategies either all at once or over time[3].
JJ started work on this after selling his last company, making some money, and growing really frustrated at the quality of the portfolio tools available to retail investors. Financial advisors have tools for direct indexing, tax loss harvesting and dollar cost averaging, but they generally charge upwards of 1% a year in AUM fees. Things like Parametric[4] and Canvas[5] have succeeded, but are only accessible through advisors. We wanted to build these kinda advanced portfolio tools for ourselves without any AUM fees.
Some common use cases we’ve found are diversifying away from a large RSU position or migrating between risk on and risk off strategies over time. You can also easily allocate a percent of your portfolio to specific baskets of stocks.
Let us know what you think! Feel free to email us at founders@double.finance as well
[1] More info about our optimizer here https://help.double.finance/en/articles/9718142-portfolio-op...
[2] More info about out direct indexing tax loss harvesting here https://help.double.finance/en/articles/9718959-direct-index...
[3] More info about out dollar cost averaging here https://help.double.finance/en/articles/9718389-dollar-cost-...
102 comments
[ 674 ms ] story [ 3512 ms ] threadI would have loved to see that message on the Sign Up page before I enter my email address.
Feel free to check back here for updates https://help.double.finance/en/articles/9457976-who-can-open...
For reference, other TLH providers generally claim 1-2% increase in after tax returns.
https://www.wealthfront.com/blog/how-wealthfronts-tlh-pays-f... https://frec.com/resources/blog/why-you-should-leave-tax-los...
For example, Guideline. They charged fixed fees on employer 401k accounts , until they didn't earlier this year.
I'm not interested in investing my time and money getting onboarded with a service unless I know the long-term fees are going to be amenable. If it said something like, "$15/mo and free for the first year" I would be on board.
Also, how do you make money?
1. We're working with Apex Clearing, a large US Custodian with more than $100B of assets. Your account is in your name there.
2. We're well funded and backed by reputable investors (YC, Matrix, Youtube Cofounder, and many others).
3. We are registered with the SEC as an registered investment advisor.
4. I personally am in the process of transferring nearly my entire net worth onto the platform.
We eventually will charge a monthly fee as described in our Form CRS, but we are waiving this fee for the time being. Eventually we plan on making money eventually like Robinhood, M1 and other commission free trading pioneers. This means PFOF, Stock Lending, line of credit, etc. We are not currently offering these products. Please see our website for more details and our disclosures: https://double.finance
Another question: do you guys support trading of fractional shares in these custom indexes? If so, what's the smallest supported share % (eg 1%, or 0.01%)?
The fraction of a stock you can buy is currently based on a dollar amount. In our case right now it's $5.10 per stock ($5 with $0.10 of room to allow for fluctuations in prices). We are looking to lower this over time though and as our daily trading volumes grows this should come down significantly.
"Don't worry bro, you can trust me" type of vibe.
Look up NBBO, that would be illegal. You're getting better execution as a retail trader thanks to PFOF.
Assume there's just a 0.1% of a meltdown and you're better off sticking to Vanguard ETFs.
https://archive.is/G3cYF
I have!
But I understand that yes this is a hard thing to get people to move and trust, safety and trading mechanics are incredibly important. We are trying to be as transparent as possible on all those factors. I would love for you to try us out with a smaller amount first to see observe all the mechanics before making a larger move. We support full and partial ACATS transfers of existing stock positions (meaning you don't have to sell anything).
I'm incredibly double-minded about this. M1 offers essentially the same service and they do it very well. I've compared M1 vs Fidelity Basket Portfolio (which also offers yet almost the same service.) Here are my takes
- M1 is easy to use (mostly, though same super-strange UX choices)
- M1 is a pleasure to use
- M1 doesnt fail on the main features
- M1 Baskets of Baskets gets complicated, but understandably so.
- Fidelity is better in some ways as it allows trading anytime, not just on specific windows as M1 does (this can also be a downside for itchy fingers)
- Fidelity Basket Portfolios is broken 30% of the time. Their OWN buy function fails any time they cannot get a quote for any 1 member of the portfolio
- Fidelity: It is absolutely a headscratcher how, in 2024, Fidelity can have trouble getting quotes for liquid public stocks during market hours (e.g., the other day, their buy of an entire pie failed because they could not get quotes for "DVY" which is highly liquid
- M1 fails absolutely miserably on back-office functionality. Selling losing lots is almost impossible without major Excel wizardry since the accounting info is held separately in APEX
- M1 fails dangerously on things they should never fail on -- for example setting beneficiaries has been a 4-month journey and still remains unresolved. If you dont have a will, get prepped for Probate! Worse, the failure is a silent failure as it suggests on the UI that beneficiaries are set. You get different answers from different people and each wants to help you but runs from "complex" issues (in M1's case, they are designed to have a single account, so their backend features fail if you have multiple accounts (e.g., a RothIRA and a non qualified account.)
The dangerous, infuriating, and befuddling experience with setting beneficiaries on M1 lead me to stick to the majors (Schwab, Fidelity) because at least I can rest assured they have the basics solidly figured out. It also makes me very hesitant to go to startups for this sort of stuff
So the good news is that M1 doesn't use apex for clearing anymore
The bad news is that... things got worse? After they swapped to doing clearing in house, they dropped like a month of incoming wires without reaching out at all, until I noticed on my monthly login. Turns out that they had changed the underlying wire instructions (makes sense), but sent an email saying that nothing would change on transfer instructions (not true).
Then the next month, they still dropped wires even with the correct instructions, because... ???? unknown reason. Again no contact, until I reached out and asked wtf. Third month, everything worked even though nothing was changed from the prior month.
So there's a reason why I won't put more than SIPC worth in M1 or any other new fintech. And yes, it's backend incompetence as the primary reason.
Also, I used FolioFN and ShareBuilder for years to do the same and they seem to have flopped despite having a compelling product. I'd love to understand why such an obvious feature/product with sound alignment to financial recommendations cant seem to do well in the marketplace!
I've wanted a tool to do this - set a target portfolio and tell me what trades to make, taking into account transaction costs and index rebalances. I just want to buy some broad indexes so it would be great if I could buy VOO and VWRL and forget about it, but ETFs are tax-disadvantaged in my jurisdiction [0] so I tried to replicate them manually in spreadsheets. I would consider switching brokers to someone who offered this tool, though right now you're not available in my area.
[0] https://nationalpensionhelpline.ie/taxation/tax-on-investmen...
Would love to chat about any hard learned lessons along the way if you're up for it - founders@double.finance
Let me know when you guys plan to hire.
By direct indexing you get a lot more flexibility to customize the index on a stock/sector/factor level.
Thanks for checking us out.
The guts of this get a bit complicated and I want to make a blog post about how we achieve this for adjustments.
Q: why only US residents? Other brokerages in the US take in non-US residents (in my case, not even a US person).
Like if a customer creates an index that's 50% AMD and 50% NVDA, and you put $100 in that index, does the customer have some underlying account that initially apportions $50 to each, and then if the next day their NVDA is worth $52 and their AMD is worth $48, the system will sell $2 worth of NVDA and buy $2 worth of AMD?
And if that's so, can you set target thresholds for when you want it to rebalance? Like, not until one stock deviates more than 10% from its ideal weight?
Short answer for your simple scenario is yes it would rebalance. The longer answer is it depends on the output of our optimization engine.
Our optimizer tries it's best to make the portfolio better, taking into account drift, trading costs and taxes and potentially holding costs for etfs and a factor model for broad diverse portfolios. Wash sales also play a large part because by default we prevent any wash sales from taking place.
These objectives can compete against each other (tax harvesting is generally good but in your example requires selling AMD not buying it). We run an optimization to try and balance these and come up with trades that make the portfolio better. By default we rebalance if the optimizer thinks the portfolio will get better above a threshold we set.
We have the ability to rebalance based on naive weight drift as you discussed at the end of your comment - right now it's not enabled by default. We are hoping to add a setting so users can enabled the optimizer to only trade if x number of stocks have drifted more than y%.
Please check out this article to learn a bit more: https://help.double.finance/en/articles/9718142-portfolio-op...
More than 30%? Less than 30%?
Less than 30% means that you're still ok if double fails. More than 30% means you have a significant portion riding on it.
If you're worth 50 million, you can probably lose 5-15 million and still be okay...