The young money stock market game

Several GRS readers have asked me to recommend a “stock market game” so that they can learn the basics of investing without risking actual money. Though I'm aware of such tools, I've never used one myself. During my recent interview with The Motley Fool's David Gardner, I asked him if he could suggest one. He recommended CAPS, which is The Motley Fool's stock evaluation tool. But that's not really the same thing.

I was recently contacted by a representative from Young Money, the personal-finance magazine for college students (which I reviewed in 2007). It turns out Young Money has their own stock market game, and it's open to everyone. Here's info from the site and from the promo e-mail I received:

Young Money Stock Market Game is a free game that allows members to practice trading in a lifelike brokerage simulation. By participating in the community, you can learn the ins and outs of Wall Street by investing $1,000,000 in virtual money. This virtual stock market game features real-time trading simulation and multiple contests. Beginning investors can practice stock market trading, compete with friends and investors, and win real money.

  • The Grand Prize: $1,000 (1 winner)
  • First Prize: $200 (3 winners)
  • Random Prize: $50 (5 winners)

Winners will be determined by the percentage gain within their portfolio during the contest period. The First Prize winner will be the investor with the highest percentage gain in a two-month period. Contestants must enter by Friday, 06 February 2009, to be eligible to win. One portfolio may be created per email address.

This contest is being sponsored by Sharebuilder, which is probably hoping that some participants will be so enthused by the game itself that they'll move on to real-life investing — at Sharebuilder, of course!

I don't have time to play a stock market game myself. If I were to do this, I'd be obsessive about it, researching stocks for hours a day. Really, though, I'm presently an index-fund investor, and not ready to move on to individual stocks.

Still, I know that many GRS readers would like to try a game like this. If you do try it, I'd be curious to hear about your experience. Was it easy to use? Fun to play? Did you learn anything? Are there other stock market games out there that GRS readers should look at?

Note: Several commenters have made an excellent point. Winning a stock-market game like this usually involves short-term speculation, which is the opposite of what most of us should be doing with our money. Still, they say, they're worth doing in order to learn the mechanics of the market. (I love GRS commenters!)

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ABCs of Investing
ABCs of Investing
11 years ago

One site I looked at was UpDown.com which has a similar theme. I never ended up trying it though. A couple of points: 1) If you are going to try to win the contest then you need to swing for the fences and hope for the best since you have nothing to lose (since it is not real money). This is not a way to learn how to invest your portfolio. 2) If you are doing short-term trading strategies then these kind of sites can be useful to see if your strategies work. Unfortunately for long term buy-and-hold investors –… Read more »

Andy
Andy
11 years ago

JD – I have played a few of these myself and even recommended these type of games to some people new to investing. But, a word of caution. When it is real money, rather than virtual money, emotions come much more to play. Emotional investing, espically for new investors, is a big factor. Particularly when it comes to selling shares – selling a losing share is tough! Still, as you mentioned I would recommend people to also consider investing in index funds as a first measure (go for the real thing, using one of the discount brokers). In the current… Read more »

Jeremiah Bell (Digital Trainer)
Jeremiah Bell (Digital Trainer)
11 years ago

My roommate tried this out for a first year investing class. It was weighed heavily on his mark. What a great tool to get people involved with investing!

The Personal Finance Playbook
The Personal Finance Playbook
11 years ago

I agree with ABCs. These contest don’t promote long term, risk averse investing. If you’re going to win, you’ll need to make large, risky bets over the short term…and guess right!

Breanne
Breanne
11 years ago

The polytechnic I work at has a “stock market game” that they run in a couple of their classes, and they use http://simulator.investopedia.com Andy and ABC have pretty summed up my thoughts on the subject. I will add… it kinda drives me nuts that the course is encouraging these future financial advisors to shoot for quick riches, when (in my opinion) a 3 month game isn’t going to really show that you know how to do much other than be lucky. The rules that they use in the class have a minimum number of trades you have to make every… Read more »

joejoeice
joejoeice
11 years ago

As others have said, trying to win a game like this is not a good way to learn how to invest. The winner will always have done something that 99 out of 100 times would have been a terrible investment, but in this case, the risk paid off. However, there is no reason why you have to try to win. I can see a game like this being useful if you use it to simulate what would happen to money if you invest it in a more reasonable way. You will not win the game, but you will get a… Read more »

Mike
Mike
11 years ago

I used a site similar to that one once called Marketocracy (http://www.marketocracy.com/). They actually create a mutual fund using the best investors. I remember liking it, but that was a while ago and haven’t used it in years.

PDXgirl
PDXgirl
11 years ago

Oh… we did one of these in a class I took last fall. I’ll see if I can look up the website.

The website was pretty easy to use, you can make teams or join public teams (I think it would be fun to have a family team for a little friendly competition and to teach the little ones about investing). I ended up doing about as well as the S&P with my choices but I put a TON of thought into them and it was when Google’s stock was skyrocketing, so buying some of that boosted my average.

Sean
Sean
11 years ago

I agree with the naysayers for the most part, but joejoe makes an excellent point. If you are using this to test your own skill rather than compete with others, it could serve as a bucket of cold water.

corey
corey
11 years ago

I have been playing at updown.com since September. I am up about 20% this month, compared to the market at -6%. It’s fun making moves that you would never make it real life but it could also be a good way to test out some new ideas if you take the game in a ‘more serious’ manner. It was easy to join and has been a good learning learning experience. I’ve made 50 cents so far!

Craig
Craig
11 years ago

I used to be in games like this growing up in school. Also for sports fans, I always used to do a stock market trading game involving sports players.

Traciatim
Traciatim
11 years ago

I work with a few guys that use Marketwatch’s Virtual Stock Exchange. You can set up private games with your own terms, which is kind of nice. Once thing I didn’t like though is that the game we set up was for 90 days, so you really have to move quick and day trade to ‘win’.

Eric
Eric
11 years ago

I prefer Caps, but the chance to win some money is nice.

Jim
Jim
11 years ago

I’ve been using Updown.com and it works fairly well. They give you $1 million on pretend money to work with and then you try and beat the S&P500. If you do out perform the S&P on a monthly basis then you can actually make money. Granted the amount you make is pennies, but its still a fun incentive. I’d recommend Updown in general. Its a good way to test out stock picking strategies and see how well or poorly you do over a longer period.

Slinky
Slinky
11 years ago

WallStreetSurvivor is another one. It’s also set up as a competition, but they give you points for logging in and making trades which you can trade for amazon gift cards once you get like 50,000 or something. It’s not a lot, but if you’re going to do it anyway, and you’re not going to day trade, that’s what I’d go with.

Jeremy
Jeremy
11 years ago

Van Tharp has a free trading game at http://www.iitm.com, though it’s based on risk management, not picking stocks, and you have to sign up for his newsletter, buy you can un-subscribe at any time. I played it about five years ago, and I remember it was good for what it taught. You aren’t learning to pick stocks – you’re learning how to manage risk, so you can be in for the winners. I think you can also adjust the odds and winning rates to try out different systems that you already know the details for. Risk management, money management, and… Read more »

Karla
Karla
11 years ago

My students use http://zions.nationalsms.com/

They are under 18, so most sites won’t let us register. This one doesn’t have a “winner” at the end, and isn’t real time, but that’s not an issue, in my opinion.

Interestingly, we started this last fall. (during the crash, on purpose) There were a few students who couldn’t, or wouldn’t, figure out stock symbols and how to invest so they never got around to buying stocks. Their $100,000 actually earned simple interest and they came out ahead.

I only graded that they tried, not how well they actually did.

Dan
Dan
11 years ago

A fun stock market game is http://www.protrade.com. It’s a sport’s stock market with fictional money. When you sign up you get $10,000 to buy stock in different teams or players. Then depending on how the team or player does your stock goes up or down. It’s exciting and you can learn some stock market basics.

Sara
Sara
11 years ago

We did this in 7th grade in math class… out of the like 30 students in the class, I was the only one who actually made a profit on my fake $10K. We tracked our stocks over several months – I think the point was to learn how to use spreadsheets, but it was still really fun. I kept that project, actually – it’s in my room at my mother’s house.

Happiness Is Better
Happiness Is Better
11 years ago

There are a few other websites I’ve seen where you can play a stock market game. Like J.D., I don’t think I want to play them because I would spend way too much time with it.

Todd
Todd
11 years ago

Thank you JD for the nice comments about Young Money’s newly launched stock market simulation game. Your blog is really a great resource and tool for all of us. Our game is really about our ongoing commitment to financial literacy and investing is certainly a part of that for today’s young adult market. While the game does require some short term “luck perhaps and aggressive moves on stocks in the short term, it truly is about getting knowledgeable about how and why the market and stocks move on a daily basis. As a result, we hope to see players open… Read more »

Adam
Adam
11 years ago

I am a big fan of Caps. It puts the market in the perspective of performance relative to the S&P500. It serves as a great eye-opener for novice investors who think picking individual stocks is a good idea. It also highlights the general strengths of an indexed fund.

GoForexYourself
GoForexYourself
11 years ago

It’s a really good way to practice. But remember, practice vs. real money, is a whole new ball game. When you start trading with real money your emotions will effect the way you think. When I started trading, I started trading with real money but at minimum cost just to get comfortable.

Alan
Alan
11 years ago

My family and I enjoy playing a board game called “Acquire”. It has gone through many revisions over the course of it’s existence, however, the gameplay is exactly the same. It involves starting companies small, and choosing to expand them and attempt to maintain a majority or secondary amount of stock in that company. Once other companies begin to grow, they can actually swallow the smaller ones. In doing so, a payout is made to owners of stock in the smaller company. As with real investing, much of this game involves luck. But the real strategy involves choosing whether to… Read more »

Cassie
Cassie
11 years ago

For any Australians reading, the Australian stock exchange runs regular stock market games where you invest a hypothetical $50,000 (www.asx.com.au/resources/education/games/). There is one for schools and one for the general public, and the winners get a cash prize.

Dave
Dave
11 years ago

As many have already pointed out, it’s easy to get lucky and make a big short-term profit in these types of simulations, but they don’t run long enough to really help you work out long-term strategies. As some have mentioned day-trading, I’ll give you my cautionary tale on that subject. I had a neighbor who was working as a stock broker a few years back when day-trading was the hot get-rich-quick scheme. He decided to try it himself. he had all the advantages – the company let him use their computers, so he wasn’t facing the 10 or 15 minute… Read more »

Sarah
Sarah
11 years ago

http://WeSeed.com is another game like this. It doesn’t have a contest associated with it, it’s really just to see how the market works and see how people research stocks. It has a different take on other games by taking anything you like about a company and making it searchable as stock in the game. I’m not sure if it gets into more specifics than buying, managing a portfolio, and then selling.

Brendan
Brendan
11 years ago

For those looking for a good Stock Market Game I’ve recently began using http://www.thespartantrader.com. It has both free and paid competitions as well as a variety of prizes. After an initial test it seems really easy and fun. I’ll let ya know how it goes though.

Freddy
Freddy
11 years ago

When I want to participate in stock trading competition, I usually go to yalicoo.com.. Playing stock trading game is really interesting, but if you are a newbie, it would be difficult to win the game.. So be prepared before you play.

stocklady82
stocklady82
11 years ago

A virtual stock market game I like is The Spartan Trader — thespartantrader.com.

My friend won a few hundred dollars playing, but she’s got a bit of the gambling bug — you can play for free (with virtual money) if you just want to learn!

Freddy
Freddy
11 years ago

Is spartan trader a game for daytrade or for longer term? Thanks for the info..

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