- Mitchell Tuchman
-
Mitch Tuchman 
Born Indianapolis, Indiana Occupation CEO of MarketRiders, technology entrepreneur and investor Website MarketRiders Mitch Tuchman is an American technology entrepreneur and investor based in Menlo Park, California. He is CEO and founder of MarketRiders, an internet-based SEC registered investment adviser that provides an online service used by do-it-yourself investors to build and manage their retirement portfolios.
Contents
Pioneer of D-I-Y Investing
Tuchman, a former hedge fund advisor, founded MarketRiders after having studied how Yale and other large endowments and wealthy family offices invest. His work led him to understand firsthand that asset allocation accounts for over 80 percent of a portfolio returns within any given year. This means that whether an investor was in stocks, bonds, real estate, commodities, or emerging markets had a lot more to do with a portfolio returns than stock picking or market timing skills. To get superior returns, these investors get broad exposure to asset classes and try to mimic the various markets instead of paying expensive managers to beat them.[1]
Leveraging the innovations of John Bogle the founder of Vanguard who brought investors low cost indexing, the tenants of modern portfolio theory, and their practical application as described by David Swensen, the Chief Investment Officer of Yale University in his book "Unconventional Success," Tuchman invented and engineered the innovative online software powering MarketRiders. He sought to do for investing what TurboTax did to the tax accounting industry—replace expensive and often biased professional advice with software, to benefit millions of Americans who would have more savings at retirement.[2] Instead of charging 1% - 2% of a client’s total portfolio every year for advisory fees, a subscription to the MarketRiders online service is $100 annually. Investors tell the service their age, time horizon, investment experience and risk tolerance. Then it returns a suggested asset allocation among American, international developed markets and emerging markets stocks, as well as real estate and both inflation-protected and other bonds.
It recommends exchange-traded funds (ETFs) exclusively which lowers investor fees by 80% over comparable mutual funds, with which to build the portfolio. (Such funds are similar to mutual funds but trade all day on an exchange, like stocks.) To remain unbiased, MarketRiders earns no commissions from these funds, and investors use your own online brokerage firm, to buy them. Then, the site sends you e-mail messages when the market has moved enough that your percentages are off and when it’s time to rebalance. By using the service, retirement investors save on fees and end up because of the law of compound returns, with more savings at retirement.[3][4]
Fast Company Magazine named MarketRiders one of the “Top 8 Most Innovative Financial Startups.” [5] In this story, it was reported that during MarketRiders' 15-month beta period, the site's 2,000 testers would have saved an estimated $3.25 million—or 1.3% of their $250 million in declared investments (the difference between a standard 1.5% mutual-fund fee and MarketRiders' average 0.2% ETF charge) -- by switching exclusively to this service.
CNBC previewed the issue on September 15, 2009, to commemorate the one-year anniversary of the failing of Lehman Brothers and the ensuing stock market crash. On Squawk on the Street, Mark Haines and Erin Burnett interviewed Fast Company’s editor David Lidsky and Tuchman highlighting MarketRiders as a revolutionary innovation to investing.[6]
In its 2010 Investment Guide, Forbes Magazine devoted a large portion of highlighting the new online Do-It-Yourself investment trend being pioneered by Tuchman, noting the problem with paying top dollar to money managers. Because not everyone can beat the market, paying ten stock pickers 1.3% of your assets a year, (the average for equity mutual funds), means that and over the long haul “you're likely to lag the market by a similar amount. That 1.3% sounds small, but compounded over 30 years it'll eat up 32% of your wealth.” [7]
In early 2010, Tuchman’s MarketRiders released a groundbreaking study “Aggregate Mutual Fund Fee Report 2009” [8] outlining the impact of mutual fund fees to American employees and their IRA accounts, using research from the Investment Company Institute and others. Of the approximately $77.176 billion contributed to IRAs in 2008 an estimated 30.5% went to paying mutual fund fees. The study proved, for the first time, the way investment fees are threatening American employees and their retirement by not allowing them to grow their savings commensurate with inflation rates.
Picking up on the significance of this research Ali Velshi and Christine Romans co-hosts of CNN’s “Your $$$$$” invited Tuchman to discuss the study. Tuchman illustrated how an investor with a $100,000 IRA who contributes $4000 per hear over a working career pays over $2000 of this yearly contribution in fees and with a 7.5% return could lose over a million dollars to advisers and mutual fund fees.[9]
Education and Experience
Tuchman received a BSBA from Boston University and an MBA from Harvard University.[10] His career spans over 20 years in Silicon Valley as an investor and entrepreneur with extensive experience in venture capital, public finance and technology.
Success as an Investor
As an investor, Tuchman was a sub-advisor to Apex Capital, LLC, on their $200 million technology and special situations portfolio and co-managed its venture capital fund – Net Market Partners, LP. At Apex, he took large ownership positions as an active investor in several small cap public companies including Art Technology Group (ARTG) and Aspect Communications. At Net Market Partners, he made multiple successful investments including: Thinq (acquired by SABA [11]), Lombardi Software (acquired by IBM [12]), Frictionless Commerce (acquired by SAP[13]), Chrome Data Systems (acquired by DealerTrack [14]), Aptimus (acquired by Apollo Group[15]), and Savi (acquired by Lockheed Martin[16]).
Entrepreneurship
As an entrepreneur, Tuchman helped technology companies to optimize their business models and strategies, consummate “game changing” strategic partnerships and access the capital markets. He was an investor and principal in C2B Technologies and instrumental in its sale to Inktomi (now YHOO),[17] and co-founder of Net Market Makers which was sold to Jupiter Communications (JUPM).[18] He co-founded Technical Communities, an online marketer of IT services and products to government agencies. He began his career at Atari in 1982 where he launched its online video game service.
Public Boards
As a Public Company Director, Tuchman has been a turnaround board member for 4 public companies including Phoenix Technologies (PTEC),[19] Kintera (KNTA), Workstream (WSTM),[20][21] and Inuvo (INUV) [22] to help lead through tough periods including top management changes, adding or reducing lines of business through organic or strategic transactions, restructuring, merging or selling the company, addressing activist shareholders and proxy contest issues, and responding to formal or informal SEC investigations.
TV & Radio Appearances
Mitchell Tuchman has been a frequent guest on CNN, CNBC, CBS Moneywatch and Fox Business News.
References
- ^ TechCrunch, “MarketRiders Promises Steady Returns Through The Magic of Exchange-Traded Funds.” May 9, 2009.
- ^ MarketWatch, “Do It Yourself.” April 16, 2010.
- ^ New York Times, “Stirring Up the Right Investment Mix.” May 15, 2009.
- ^ Barron’s “Do-It-Yourself Portfolio Management… with these online services, who needs the pros?” July 13, 2009.
- ^ Fast Company. “Money Changers: Eight Startups Brimming With Hope for the Financial Industry.” October 2009.
- ^ CNBC: “Squawk On the Street” Erin Burnett and Mark Haines interview Fast Company Editor David Lidsky and Mitch Tuchman. September 15, 2009.
- ^ Forbes Magazine – 2010 Investment Guide. “Do It Yourself Investing.” December 14, 2009
- ^ “Aggregate Mutual Fund Fee Report 2009”
- ^ CNN: “Your $$$$$” Christine Romans and Ali Velshi: Surprising IRA Fees. March 27, 2010.
- ^ Business Week - Mitchell Tuchman
- ^ Saba.com: Saba to Acquire Enterprise Learning Vendor THINQ
- ^ IBB.com: IBM Closes Acquisition of Lombardi Software
- ^ SAP.com: SAP to Expand Sourcing Offering with Acquisition of Frictionless Commerce
- ^ DealerTrack: DealerTrack Completes Chrome Systems Acquisition
- ^ paidContent.org: Apollo Group To Acquire Online Ad Network Aptimus For $48 million
- ^ Defense Industry Daily: Lockheed Martin Acquires RFID Firm Savi
- ^ CNET News: Inktomi to buy C2B
- ^ New York Times: Jupiter Communications to Buy Net Research Companies
- ^ Phoenix Technologies Board of Directors
- ^ Workstream Board of Directors (www.workstreaminc.com)
- ^ Business Week: Workstream Board of Directors
- ^ Business Week: Inuvo Board of Directors
Sources
- “Aggregate Mutual Fund Fee Report 2009”
- “MarketRiders Promises Steady Returns Through The Magic of Exchange-Traded Funds.”
- Stirring Up the Right Investment Mix - New York Times
- Forbes Magazine's 2010 Investment Guide
- CNBC Interview with Mitch Tuchman
- "Surprising IRA Fees" Interview - Ali Velshi and Christina Romans - CNN
- "Are Your Funds Keeping You From Becoming a Millionaire?" - U.S. News
- "Web site's mission: Cut investment fees" - Interview with Jonathan Burton of Market Watch
- Most Important Skill for Investors - CBS MoneyWatch Editor-in-Chief Eric Schurenberg talks to MarketRiders CEO Mitch Tuchman about asset allocation.
- "Start Over, Finish Rich: 10 Steps to Get You Back on Track in 2010" by David Bach, #5 NY Times Bestseller (Feb. 2010) P. 102.
External links
Categories:- Living people
- American computer businesspeople
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