$19/month, plus broker fees

Stock screening based on the criteria of 10 investing gurus.

Baton Investing is an app for a stock investing system based on an algorithm designed by an M.I.T. engineer. The algorithm attempts to mimic the investing strategies of some successful investors. The Baton Investing website contains far more information than the app, but both are useful.

You might recall that a couple of months ago we did a review of the iBillionaire app, which is another take on tracking the investment strategies of successful investors. Baton Investing is in the same family of investing thought. Basically, why reinvent the wheel when you can just do what other people have shown works?

Baton rates stocks on the criteria used by its 10 “gurus,” including Warren Buffett and Peter Lynch. The other gurus are James O’Shaughnessy, Martin Zweig, John Neff, David Dreman, Kenneth L. Fisher, Benjamin Graham, Joseph Piotroski and Joel Greenblatt (the approaches of 9 out of 10 of these investors are also tracked by AAII in AAII Stock Screens). They then determine, on a regular basis, which five of the 10 models have performed the best over the past 10 years. Finally, every 28 days, they pick the two highest scoring stocks from each of those five models.

The home screen gives you at-a-glance performance numbers for the tracking portfolio (Figure 1). These numbers will obviously vary from your portfolio performance because of fluctuating market prices and timing. The purpose of the app is not to track your own portfolio, however, so you’ll have to use the tracking app of your choice if you want to monitor your personal holdings.

Figure 1. Home Screen

Tapping the Portfolio tab shows the holdings in a table format with ticker, price and today’s change percentage displayed (Figure 2). Selecting the Stocks tab at the top shows a little more information about each stock, such as its industry. Swiping right to left moves from stock to stock. A key piece of information displayed for each stock at the bottom is the return since purchase percentage (as well as the purchase date).

At the bottom of the app is a Tools button that provides a rebalancing calculator and a stock lookup. The rebalance calculator will be more useful for those who rebalance monthly, whereas those who rebalance annually will not find it as useful. The stock lookup allows you to enter a ticker and the stock is shown with a score for all 10 gurus. Scores are not available for all stocks, though.

Figure 2. Portfolio Tab

The Alerts tab provides details on what actions to take, such as how to rebalance your portfolio. The alerts will show which stocks to buy and which stocks to sell and for what portfolio. They also identify which stocks you should hold.

Baton has a relationship with online brokers Motif Investing and Openfolio where you can execute all the transactions at one time. If you use Motif or Openfolio, the exact allocations for each position will be automatically calculated for you. However, Baton Investing recommends that if you are using a broker other than Openfolio or Motif, you should sell identified stocks first before doing any buying.

Baton says that it never acts on any advice until after its alerts have been sent out to members and that it is unlikely that the trading volume of its members will ever be sufficient to move the price of a stock.

Baton charges $19 per month for its services and estimates $10 per month in broker fees (using Motif Investing), for an annual cost of $348. With the same broker fees and the annual Baton plan, the price may hover closer to $320. To compare this to what other robo-advisors and “traditional” advisors charge, check out “What Exactly Do Online Investment Advisory Services Offer?” in the January 2015 AAII Journal.