Ease of Use
If you’re in search of a new online brokerage, Tornado may be an option you’ve come across. Tornado is not only an online brokerage, it is also a social investing platform designed to allow users to build their portfolio while developing new ideas by connecting to other investors. Tornado’s features include social investing, stock ideas, portfolio optimization, a stock discovery tool, and more. So, is this brokerage really worth using? Find out in our Tornado review.
Tornado, formerly known as NVSTR, is an online brokerage and social investing platform founded in 2015. The platform is designed to help you build a portfolio and develop trade ideas by connecting with other investors.
Tornado’s community is still relatively small, which limits the impact of its social investing features. That said, newer investors can benefit from the ability to pose investing questions to Wall Street professionals and from Tornado’s portfolio optimization tools.
In our Tornado review, we’ll cover everything you need to know to decide if this brokerage platform is right for you.
How Much Does Tornado Cost?
Tornado offers a $4.99 per month subscription that includes 25 free trades monthly. If you use all of your free trades in a month, additional trades cost $4.50 each. Alternatively, you can opt out of the subscription and pay a commission of $4.50 per trade. Tornado also offers free simulated accounts, which give you access to all of the platform’s analysis and social investing tools.
At the time of writing, Tornado is offering a bonus for new users. You’ll receive $5 when you deposit $50, $15 when you deposit $100, $75 when you deposit $1,000, $150 when you deposit $10,000, or $300 when you deposit $100,000. You can invest the bonus immediately, but you cannot withdraw your initial deposit for at least one year.
One of the key aspects of Tornado is that it’s more than just a standalone stock brokerage. It’s also an investment community where you can connect with like-minded investors. Every user on the platform has a profile, which enables you to see what they’re invested in and how their portfolio is allocated (you can set your profile to private at any time). You can also see their ideas, which include user-defined price targets for individual stocks.
Tornado also has profiles for famous investors like Carl Icahn, Warren Buffett, and Bill Ackman. These profiles aren’t owned by the investors themselves, but they do reflect the current holdings of their respective investment firms.
In addition, Tornado gives you access to so-called ‘Community Thought Leaders.’ These are Wall Street professionals who Tornado pays to answer investor questions on the platform. So, you can select any stock, pose a question about it, and get a response from a Wall Street analyst. This is a unique feature that offers a chance to get answers to complex questions about a company’s valuation.
Tornado makes it easy to keep track of investment ideas and to get feedback from others. You can add any stock to your personal ideas list and annotate it with your thoughts on why it’s a worthwhile investment. For example, you can add a price target, quantify your conviction in that price target, and designate an investment horizon. You can also write out pros and cons, which are shared publicly by default so that other Tornado users can comment on them.
If you designate a price target for your stock idea, you can also quickly see how far the current price is from your target.
One of the neatest features within Tornado is the portfolio optimizer. This tool analyzes your current portfolio and your stock ideas to generate an optimized allocation that maximizes your return while limiting your risk.
Your stock ideas list serves as the basis for portfolio optimization. You can select which stocks from your ideas list to include or exclude in the portfolio optimizer, as well as see your current allocation of each stock. Tornado uses the price targets you set for each stock idea plus your conviction in each target to determine an optimal allocation. So, keep in mind that the results of the optimizer are heavily dependent on the quality of your ideas. It’s also important to remember that the optimizer doesn’t account for diversification across market sectors.
Once the optimizer suggests a new portfolio allocation, you’re free to tweak the results. When you’re ready, you can use Tornado to execute all of the necessary trades to achieve your new portfolio. Helpfully, you have the option to exclude all orders below a size threshold that you set, so you don’t have to worry about being charged commissions for very small trades.
The stock pages on Tornado leverage the platform’s social investing features. For any company, you can see top pros and cons from other investors who have added the stock to their ideas list. Tornado lets you agree or disagree with any idea, and you can see how many other investors have agreed or disagreed already. Tornado also displays users who have added that stock to their ideas list, enabling you to see what price target they’ve assigned to it and whether they have a position in it.
The stock pages also include a news feed and a comparison table that lets you easily compare fundamentals across related companies. However, there are no technical charts available in Tornado.
Tornado can also help you find new stocks to build ideas around. The platform’s explore panel offers 13 premade stock screeners for categories like value stocks, growth stocks, and stocks with low correlation to your existing ideas. You can also build your own stock screen, although the choice of parameters is limited to a few fundamental metrics and ideas-based filters.
Notably, screen results are displayed in individual chart panes rather than in a table. While this looks nice, it does make it more difficult to compare stocks quickly. To learn more about any stocks that a screen turns up, you’ll need to go through them one by one.
How Does Tornado Compare?
Tornado is a very unique stock broker and social investing platform. While some of the social aspects of Tornado can be found elsewhere, the fact that you can connect directly with Wall Street analysts is a huge plus for this platform. In addition, since you can see not only what stocks users are interested in, but also the price targets they’ve assigned to their ideas, you can use Tornado to create an actionable investment thesis around a stock.
The portfolio optimizer, too, is unique. The fact that it uses your stock ideas list and price targets is neat, although it can be fraught if your ideas list isn’t meticulously researched. It’s easy to turn your optimization into action thanks to the fact that you can place stock trades directly through Tornado.
While these features are nice, Tornado does fall short of the mark in a few areas. For one thing, it doesn’t have any technical charts and doesn’t pull in publicly available stock price targets from Wall Street analysts. The stock screener is also fairly basic, and the results aren’t well-organized. Finally, the $4.50 commission per trade – or $4.50 per month subscription – makes Tornado fairly expensive compared to many other stock brokers.
Is Tornado Right for You?
Tornado is best suited for medium- to long-term investors who want to use social investing as a research tool. Tornado makes it easy to see what other investors think about stocks and to share your own ideas for feedback. It also lets you connect with Wall Street analysts to pose questions that you can’t easily find answers to otherwise.
Getting the most out of Tornado does require some effort since you need to come up with price targets for individual stocks. The portfolio optimization tool can be helpful for creating a portfolio based on your ideas and adjusting it over time, but it’s important to recognize that it doesn’t work in the same way as traditional portfolio builders.
- Social investing network where you can share ideas
- Pose questions to Wall Street analysts
- Stock ideas with user-defined price targets
- Portfolio optimizer based on your stock ideas
- Free simulated account
- Monthly subscription or commission for stock trades
- No technical charting tools
How do you opt out of the subscription?