How Investment Platform YCharts Helps You Grow Your Wealth

“The big opportunity we see in the market is that Millennials are do-it-yourself first,” says Sean Brown, the CEO of Chicago-based YCharts. “They love tools. They love data. But they may have overconfidence in their ability to invest.”

For those of us, Millennial or not, who know you can never be too confident about money, YCharts is like a pitch book for financial information.

It’s a cloud-based investment research and decision-making platform that uses data visualization to help both money managers and self-styled finance nerds quickly gain insights and make smarter investment choices.  

“We make it easy, whether it’s just testing and keeping abreast of the market when you have a wealth advisor, or whether you’re wealth advisor yourself, or you’re a do-it-yourselfer. You need a tool to help you make good decisions. That’s what we’re all about,” says Sean.

The company, based in the West Loop with a satellite office in New York, is, as Sean says, “just growing like crazy.” They appeared again this year on Inc’s list of the 5,000 fastest-growing companies, and they show no signs of stopping.

The YCharts platform isn’t a replacement for your financial advisor, and it’s not supposed to be. But for those who are interested in trading on their own, it’s empowering. If nothing else, I can use it to keep my financial advisor honest. I can know what they know.

The company, which launched in 2009 and now has more than 4,000 users, addresses a gap in the market for non-terminal-based financial research solutions. Sean breaks it down: “Some people may have heard about the Bloomberg Terminal, which is very expensive ––$20,000 to $25,000 per year, per seat. On the other end of the market are Yahoo Finance and Google Finance, which are free. YCharts is in between. Depending on the plan you need, it costs somewhere between $500 and $5,000 a year.

YCharts CEO Sean Brown (John Rosin/Technori)

Ready to make your money work better for you?  Sean, a returning Technori podcast guest, recently dropped into the WGN studio to update us on YCharts’ rise, investing with purpose and why building wealth is a marathon, not a sprint. Here are some key takeaways.

Let’s start with the basics: saving is not investing

Sean Brown: Think about the difference between saving and investing,” says Sean. “Saving is is deferring spending.

Scott Kitun: To me, saving is basically “not losing.” Investing is making.

Sean: Investing is making. The whole reason why you invest is so it becomes a much larger sum in the future. If we put $50 per paycheck away in our savings account, that’s not going to help us buy a car.

Scott: It’s like Christmas presents savings. It’s liquid.

Sean: It’s deferred gratification.

Scott: That’s a great point. Savings really should be considered as liquid money that you need to be able move around –– but you don’t want in your checking account because you’ll piss it away at Nordstrom.

Keep calm and trade on

Scott: Do you guys have a heavy consumer angle at YCharts? Or is it mostly for finance pros?

Sean: About half of our customers are retail investors. They’re people who are saving but also want to grow their nest eggs. I’ll tell you what –– the market’s getting really shaky lately. So keeping abreast on the markets, picking the right investment –– it was much less important when the market was going up, up, up. All boats were rising. Now that the markets are getting shaky, we’ve got the tools that help you feel comfortable with the investments you’re thinking of making, or that you just made.

Know how to lose

Scott: I think most people just don’t have a lot of experience dealing with wins and losses. That get some money, they win –– like the assholes in Bitcoin world who made their millions but had no idea how or why it happened.

More troubling is losing money. Nobody likes taking losses, but I kind of enjoy taking some minor losses on the stocks I buy on Robinhood and retrace the news trail. Did they announce a quarterly report? What was going on?

What are some takeaways for a novice who wouldn’t have YCharts yet but is looking to learn more about investing?

Sean: You make a good point. We have too many people who were in one startup and it made it big. They thump their chests and say, it was all me. It was by force of will. But there are a lot of elements of success that need to be understood, including luck.

Scott: We depend on that.

Sean: Number one, do you understand the forces that drive markets? Do you understand that a jobs release or a housing starts impacts a lot of different types of stocks? Do you understand that exposure to China may or may not be a good thing, given where you want to go? So what we do is we help you track things that are interesting to you before you have to make any commitment. Track it, look at it, keep an eye on it. Say, hey –– alert me when that thing goes up by six percent because I think maybe it’s gonna go up by 20 percent, but I’m not sure.

Trading isn’t necessarily investing, either

Scott: That’s another great point –– to recognize both the macro and micro. If I set and track this company over a week or ten days, that tells you a story only if you have a historical context. Last year at this time, did it do the same thing? But if you’re more of a day trader, you’ve got to know what’s going on on micro level. What are the things that make a stock blow up in a day? Because as we deal with the craziness I’m sure is coming our way in the next nine to 10 months, I want to know that when I hear certain news, I know which five stocks I need to move.

Sean: Exactly. And it’s an important distinction. You point out the difference between trading and investing. Trading is making quick gains on things. I’m in and out in a day, a week or a month. Investing is holding on hold.

Adjust as your life changes

Sean: Yes. You know, the things that we help people do, whether they want to make some money today, or they’re in the buy and hold, which is the certainly the strategy we recommend, is understand your needs.

If you are a 64-year-old pre-retiree and you’ve stored up your nest egg, you really don’t want much risk. You want fixed-income types of things. You want dividends. You want things that are safe. Your downside risk is much bigger than your upside potential.

Whereas if you’re a millennial in your early twenties, you’re willing to take more risk and you want more exposure to stocks and tech sectors and the Nasdaq. So depending on who you are, there’s things that might be important to you. We help you screen and filter stocks, ETFs, mutual funds that help you get the basket of a diversified portfolio that works for you.

Don’t try to time the market

Scott: It blows my mind that there are people out there who, especially retirees, who don’t pay attention to their money. If you’re going to read the Wall Street Journal every day, which a lot of them do, why not read the cheat codes and at least look at the stocks you have?

Sean: You’ve got to be careful with a couple of things, though. On one end of the spectrum, you don’t want to try to time the market, because you’re going to be wrong. If you do that and react because the market down, and you sell––

Scott: You’re definitely talk about investing here more than anything.

Sean: Right. On the other end of the market is just letting your stocks sit there forever. Somewhere in between is a prudent portfolio, where you don’t overreact, but you also realize because one part of your portfolio grew a lot, you may want to rebalance and tilt that portfolio to get it back into the diversified whole that you’re looking for.

Put your money where your heart is

Scott: Warren Buffett says analysis is the thing that’s going to get you rich. If you could give us one investing tip, what should we should be looking out for?

Sean: I would say that if you don’t like what the company does or you don’t relate to what they do, don’t invest in it. I think one of the biggest perils is that people judge investments on just numbers.

If you don’t understand what a company does, then you’re not going to make the right moves. For example, if the company is heavily dependent on steel and you hear about tariffs on the steel industry, you’re not going to put two and two together and recognize that you should revisit that investment. Find things that you believe in and then pick the right timing to make those investments.

Stay in it to win it

Sean: I have a separate piece of advice for Millennials. Our company just did a study because we wanted to understand this generation’s investing patterns better. Older Millennials have some scar tissue from the 2000 market downturn and dot-com bubble that burst. And then again in 2007 – 2008. They may stay away from markets entirely.

Younger Millennials have only seen up, up, and up. I tell people that there’s a much longer term horizon –– it’s been 120 years. Make sure you understand it’s okay to invest, but make sure you also understand it’s not always going up and don’t be surprised when it doesn’t.

Scott: I think I’m a Millennial by birth, not necessarily by act, but I think one of the things about this demographic is that there’s a ‘gratification now’ thing: they want to make money right now. And then they try to trade and then they lose their shirt.

Sean: But it’s interesting, though. What we saw in our survey was that Millennials are pretty good at saving money in relation to prior generations.

Scott: It’s easy to count not a lot of money, though.

Sean: Yeah, well––

Scott: I’m just joking.

Sean: But when you’re enrolling in your 401(k), it’s hard to take 10 or 11 percent out of your paycheck. Millennials are really good at saving. They’re not as good at investing.

Millennials are heavily invested in cash, and they may think, “by the time I’m 45, I’m going to have a seven-figure nest egg.” What we’ve found is the math isn’t working. They’re 30 to 40 percent short.

Scott: That’s not ideal.