Fantasy Stocks

For those who are still too scared to invest in the stock market, you can buy some imaginary stock at UpDown, a “practice investing” site that simulates the stock market and lists real-life companies without meting out real-life consequences. [%comments]


Jonathan

I think these sites do more damage than good. Generally speaking, people don't act the same in "practice sessions" than they do in real life. My hypothesis is that people using these sites typically act more aggressively than they would with their own money in trading stocks, and that in real life panics guide investment to the point where people are more likely to buy high and sell low than in practice sessions. I wonder if these sites would be better served as more of a training site than a game? If the sites applied normative trading principles to provide feedback and institute a type of cognitive behavior therapy to help people self train for investing?

Joel

And you can always hit restart and get a fresh million.

Traciatim

I use the market watch one, but there are piles of these around.

sram

Does not one's participation in the market affect the stock prices in some infinitesimal manner? How do these sites model that?

tosin

i agree that your trading behaviour is changed. when u lose money u rationalise it by insisting that its just a game. when u gain, however, u feel like u would have in the real-life stock market. i still feel they provide the added benefit of introducing one to the dynamics of the stockmarket. i prefer www.kaching.com personally.

Doug Nelson

I wonder how the aggregate stock of that site does? Could be a mutual fund in their future.

Jonathan

http://www.kaChing.com actually applies both realistic limitations and real-world portfolio evaluation tools (modeled after the way premium university endowments evaluate the investment managers they engage).

Specifically, kaChing uses real time prices and volume restrictions (it even looks at short interest and other factors to limit shares available to short), and ranks investors based on risk adjusted returns, adherence to stated investment focus and quality of the research they provide.

When was the last time you got that kind of insight on a mutual fund manager?

Users will actually be able to mirror the best investors, who qualify, directly in a brokerage account, later this year.

- Jonathan (kaChing team)

Adrian P

I actually use updown as a stock watch service for companies I am interested in.

Every day I get a well laid out email with a summary of their performance during that day. It really helps me show the relationships in a group of companies I am interested in. For example, I am watchign 10 IT companies to see how they move with respect to each other each day. Rather than checking each on on the NYSE. I follow the 10 on up down in equal proportions, then each day I get a summary of what they did.

The ability to refresh to 0 allows me to keep doing this.

By registering alternative email addresses and forwarding them to your central account, it allows you to effectively watch groups of stocks.

Aside: I am an economics researcher, not a financier, so this information really isn't being used to invest, it just allows me to keep a record of these companies coming in each day to get a feel for them, i wouldn't use it to calculate coefficients at all. I just couldn't rely on the data for investing.

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Stephen

One good way to get to know the stock market is finacial spread betting. A free way to get into this to test your day to day trading skills is to play on http://www.betmystock.com . You bet on stock matchups, choosing which will outperform the other. It can take awhile to get the hang of it but you can cash out with real money if you know your stuff.