Playing The Market: Use stock games to learn the rules
The good news: the value of your investment increased 5% in two months. The bad news: the money you invested was fake.
Investing in the stock market for the first time can be a challenge, and online stock games are a great way for investing newcomers to get started. Knowing which stocks to invest in, how many shares to buy, and how much risk to take on takes practice. These games provide the opportunity to learn without risking your college fund. Getting started is simple: first you get a pile of fake money to invest however you want. Then you select stocks to trade; the phony loot ebbs and flows with the real market. As an added bonus, some games offer the chance to win real cash prizes.
There are lots of different online stock games out there. Most of them follow the same concept, but each offers different features. Check out these three examples:
- marketwatch.com/game. This site aims to educate everyone from newcomers to seasoned pros. It includes research tools and stock market news to alert you of changes that could affect your stocks.
- wallstreetsurvivor.com. A streamlined site where you can compete with friends to see who can build the best portfolio, and view video tutorials that can help guide your decisions.
- investopedia.com/simulator. This site provides downloadable tutorials and free newsletters. Connect with 700,000 other investors from all over the world to trade tips and learn new investing strategies.
Now that you've gained some experience (and maybe a little confidence), it's time to put your money where your mouse is. To begin investing in the real stock market, find out what investment services your financial institution offers. To find a broker on your own, visit sec.gov/investor/brokers.htm. Whether you open an investment account with a financial institution or on your own, you'll be faced with these trading options (and their varying levels of cost).
- ($) Trading with discount brokers. This is useful when you know what you're doing and just need an intermediary to execute the orders. They're usually available only by phone or online, and they don't take a whole lot of time to give advice or guidance.
- ($$) Trading with full-service brokers. Better for those just starting out, full-service brokers will usually provide advice on financial planning and picking investments. They often charge more to execute trades, so the total cost of using them is higher.
Having played both the game and the real market, maybe you're thinking of making it a full-time job. So how does one prepare for a career in the stock market?
Math and finance degrees, as well as industry internships, are helpful if you want to become a certified trader or broker. Companies like T. Rowe Price and Vanguard offer internships, regardless of your field of study. If your major is in something other than finance or math, ask an academic advisor about helpful elective classes.
Even if you're motivated and smart, not everyone is cut out for the job. Be ready for long days, stress, and multitasking to the umpteenth degree. If that sounds like the ideal environment, pursue a career in a field you first discovered with a simple online game.
theglobeandmail.com, fool.com, umbc.edu, troweprice.com, investopedia.com, vanguard.com, nytimes.com, vse.marketwatch.com, wallstreetsurvivor.com, nyse.com, finance.yahoo.com, bls.gov, uh.edu, sec.gov, businessweek.com, wsj.com, finance.google.com, money.cnn.com, moneycentral.msn.com