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Trading in a simulator allows for learning and mistakes. Most new traders make mistakes (Ross lost more than $30k in beginner mistakes) and learning to trade in a simulator prevents losing real money. During the first month of using the simulator, students can test various trading strategies and get a feel for the market. 'Win-Win' Games 'Win-Lose' Games; Why Are Traders Prepared to Trade at Inopportune Prices? The Competitive Market for Dumb Money Alpha 'Win-Lose' Games You Might Be Able to Compete At 'Elevator Pitches' for Inefficiencies; The Rebalancing Game; The Window Dressing Game; Looking for Evidence in the Data; Data Analysis 1: Get TLT Daily Prices. Sep 28, 2021 For those looking to have fun and test out a few stock ideas, stock market games make it easy. You can get in the game with your friends, win some virtual money and just generally have a good time. Play the game, and the money! StockTry is your virtual stock market gaming platform. Choose stocks, build teams, and turn Equity Trading into Fantasy gaming! Elevate your stock market quotient with Daily Games that come with Daily Rewards! Play with your friends.
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Think you can figure out who's the Peyton Manning of the stock market? Invoost lets you test your stock picking chops.
The website hosts online stock market tournaments that are structured a lot like fantasy sport games: players pay a small entry fee, pick stocks in the Nasdaq-100 using $10,000 of virtual money and trade them in an effort to generate the best returns for a cash prize.
For example, one game that is currently running has a $10 buy-in fee and a $100 prize pool, while another has a $2 entry fee and winnings of $20. Some sponsored games are free to play and also offer cash prizes. We thought about naming Invoost one of CNNMoney's 15 best financial sites and apps. But it doesn't really help you manage your money. It's just cool.
Throughout an Invoost tournament, which can be set to last anywhere between a couple of hours to a couple of months, players are ranked against one another in a live leaderboard based on their portfolio returns. At the end, players with the best winnings, typically the top 30%, take home a piece of the prize money.
'When people usually play virtual stock market games, it's like they're using monopoly money, so nothing is at stake,' said Jonathan Levy, who came up with the idea to start Invoost with his classmate Tyler Maglione during an entrepreneurship class at IE Business School in Madrid.
'Even when you put a little bit of money on the table, it makes it a lot more interesting,' added Levy.
After launching a little over a year ago, Invoost has already hosted more than 5,000 tournaments with players from around the world.
Most of Invoost's players are college students, including University of South Florida junior Miguel Munoz.
Munoz, an accounting and finance major, first learned about Invoost earlier this year when the website was hosting a special free tournament for college students. About 650 people entered for the chance to win part of the $10,000 prize pool.
'I had played around with a fantasy stock portfolio, but I was never serious about until I had the chance to win some money through an Invoost tournament,' said Munoz. 'I started keeping up with the news to figure out what could move certain stocks throughout the trading day.'
As he continued to play in tournaments, Munoz said he developed a strong mix of analytical and technical skills that helped him successfully trade stocks and earn returns.
Since his first game back in February, Munoz has participated in almost 40 no-fee tournaments, and has pocketed about $800 in winnings. He won first place in two tournaments, including one in July when he picked Chinese search engine Baidu(BIDU), and it rallied almost 40% that month.
Munoz now plans to play in more tournaments and is currently in a 9-day contest. He's betting big on Tesla(TSLA), with $9,500 of his virtual $10,000 in the stock. The remaining $500 is in cash.
Though he's become a pretty decent trader, Munoz hopes he can use his new skills to land an internship in an equity research department this summer.
'I love dissecting information, analyzing it and finding the value of a company,' said Munoz. 'That's what I've become passionate about and that's how you become a good long-term investor.'
Winning the stock market game is possible but not how most investors go about it.
It’s no secret that investors are notorious for under-performing the stock market, realizing returns far below the general market. Data for the ten years through 2013 shows that the average investor earned an annual return of just 2.6% compared to a return of 7.4% for stocks and 4.6% for bonds.
In hindsight, we know why we lose. Investors chase high-flying stocks they hear about on TV only to realize they must have been the last to jump on the bandwagon as the price comes crashing down. Panic sets in and the investor sells out of the stock just before it levels off or stages a rebound.
So why is it so hard to win the stock market game? Why can’t investors conquer their bad habits and earn a better return on their investments?
The answer is because most investors are playing the wrong game!
I’ve got one of the best analogies for investing I’ve ever heard to help you beat the stock market. Check out how investing is like playing tennis and some of the tips below but don’t forget to scroll down to the bottom of the page for an easy-to-follow infographic that explains it all!
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Let’s look at the game of tennis. Tennis is truly a game of contrast, you are either really good or really horrible, and your skill level determines your strategy for winning the game.
Two professionals playing the game will need to do everything they can to score points. They each know that the other will make few mistakes so the key to victory will be in taking risky shots for the ace.
By comparison, when my wife and I play tennis, the strategy is very different. I can try for the risky shots and get lucky on a few but, more often than not, the ball is going to go soaring over the fence and I’ll be running after it. Since it’s more fun to return the ball back as hard as possible, practicing my best guttural grunt as if I were John McEnroe, I make a lot of these errors and my wife usually wins.
She knows the key to winning this amateurs’ game is to just concentrate on getting the ball back over the net…and making the fewest mistakes.
It turns out, winning the stock market game is a lot like winning in tennis.
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The Professionals’ Stock Market Game
I’ll detail how to win the stock market game playing by playing like an amateur in a bit. First, let’s look at the professionals’ game at investing.
Professional money managers are measured against the rest of the managers in their investing style. Around the beginning of the year, you’ll see rankings come out placing managers among the ‘median’ return for their group.
Since everyone is constantly trying to score a few extra percentage points to put them above the median, the professionals’ stock market game is about taking risks to beat your comparison index.
It turns out that even the professionals have a tough time playing their own stock market game. Data from 2012 mutual fund performance shows that just 39% of professional fund managers beat their index while the average fund return actually trailed the stock market (S&P 500) by a percent after fees.
If the average fund return was 15% and nearly 40% of managers beat their index, there’s a good chance that a lot of ‘professionals’ lagged the rest of the market by a wide margin.
Why? Because they are making big bets and losing big when those bets don’t pay off. They’re trying to serve an ace but hitting the ball into the bleachers!
Before we get to those four rules to win the stock market game, understand that a big part of it is NOT LOSING MONEY! Anyone can make money when stocks are rising. It’s the crash-proof portfolio that will keep you from losing your heard-earned returns.
Part of a crash-proof portfolio is investing in different assets and few are better for diversifying your portfolio than real estate. Not only does property cash flow like no other, you get protection from the ups-and-downs of stocks!
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How to Win the Amateurs’ Stock Market Game
By comparison, most of us won’t face losing our job if our investment returns fall short of the ‘average’ investor. We only need to avoid making the big mistakes and meet our long-term financial goals.
Just as my wife doesn’t have to play like Steffi Graf to beat me at tennis, you don’t have to invest like a pro to win the stock market game.
Use these four strategies to win the amateurs’ game in the stock market.
1) Winning the Stock Market Game with Diversification
The most important amateur’s trick to winning the stock market game is diversification. This means having a mix of investments that react differently to the economy and the stock market. Bonds and stocks rise and fall differently because bonds are a contract for fixed payments while stocks are only an ownership stake in potential profits.
Even within stocks, different companies react differently to the business cycle. Stocks of utility companies do better when the economy isn’t doing well and interest rates are falling. Stocks of retailers do better when the economy is humming along and people are buying lots of stuff.
The idea behind diversification is that, no matter what the economy does, your investments will make a smooth path higher. Some individual investments will fall as others rise but your overall wealth will increase and you won’t suffer the big losses that lead to panic-selling. I put together an easy table of four major asset classes and 12 different groups of investments in another post to make sure you get the diversification you need.
Diversifying your investments means investing in more than just stocks and bonds. No other investment has created as much family wealth as real estate and property is great for protecting your portfolio.
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For most investors, investing directly in real estate isn’t a good idea. It can costs hundreds of thousands just to buy a few properties and you still won’t be diversified across property types and regions. Real estate crowdfunding allows you to invest as little as $1,000 in individual properties to build a well-rounded portfolio. You also get professional management of your properties and low fees.
I follow several real estate platforms to get access to as many deals as possible. It costs nothing extra to have an account on more than one crowdfunding site and you’ll be able to invest in more deals.
Streitwise is a unique real estate crowdfunding platform I’ve been following that is a new twist on REIT investing. Many of the crowdfunding sites are still only open to wealthy investors but the Streitwise real estate fund is open to everyone.
The Streitwise 1st Streit Office REIT invests in high-quality office properties and as of the date of this video, has paid a 10% annualized dividend. The fund is managed by seasoned real estate professionals that have acquired or managed over $5.4 billion in property and across all property types.
2) Keep your Investing Fees Low
Mutual funds charge an average 1.4% a year to pay their managers and overhead cost. Add in a fee for buying or selling the fund and you could need a decent annual return just to break even. You won’t pay annual fees for holding individual stocks but the commissions for buying and selling will add up.
Fidelity reports the average investor on its invest platform makes 77 trades a year. That could cost you upwards of $770 a year in fees even on the cheapest discount brokers.
The solution…don’t sell your stocks! Invest in companies with products that people love and that will be around forever, and then hold the investment until you need the money in retirement. You’ll save on fees and will avoid a lot of the bad investing habits that lose money.
This one isn’t as much a problem since the major investing sites switched to no-fee but you still have to watch those hidden fees. That’s why I invest on Webull, one of the first no-fee platforms and a no hidden fees guarantee.
3) Amateurs in the Stock Market Game don’t use Margin
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If you don’t know what investing margin is, you’re already on your way to winning the stock market game. Margin is basically a loan your broker gives you to buy more stocks than you can afford. You’ll pay interest on the borrowed money but can increase your return as long as your investments pay off.
Unfortunately, you’ll set yourself up for big losses if stocks fall. Lose 10% on your $5,000 portfolio and you are only down $500. Lose 10% on that same portfolio margined to $10,000 and you’ll lose more than $1,000 with interest.
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Investing on margin can be extremely tempting. What could be better than finding that next hot stock and getting triple-digit returns on borrowed money? It’s a trap though and one of the fastest ways to lose your money.
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4) Getting the Easy Points in the Stock Market Game
The easiest money you’ll ever make in the stock market game is the free money you get from your company’s 401(k) match and from tax savings on retirement accounts. I know it sucks to have your money locked away in an account until you’re 59 ½ but so many people turn down free money by not maxing out their 401(k) or IRA contributions.
If your company matches $0.50 for every dollar you invest in your 401(k), you’ve instantly got a 50% return! If you pay 25% on income taxes, you could invest $1,000 in a retirement account or pay the taxes and only have $750 left to invest in a regular account.
If a lot of the tips for playing the amateur strategy in the stock market game sound like my recent Top 10 Investing Basics for New Investors, there’s good reason for it. It’s only when investors try to boost their returns with complex strategies that they make the big mistakes that ultimately lose money.
The beauty of the stock market game is that you can pick your match. You’re free to play the professionals’ game, analyzing stocks daily for the slimmest of chances at a few extra percentage points. You’re also free to play the amateurs’ game, investing for the long-term win on making fewer mistakes. It’s your decision, just make sure you know which game you’re playing.
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Here’s that infographic I promised on beating the stock market. I confess, I’m not a graphic designer but I’m proud of this one. Feel free to share it or use it on your site, please just include a link to https://mystockmarketbasics.com/win-stock-market-game/
The Only Way to Win the Stock Market Game
- Invest across different asset classes and in different investments within each asset to reduce risk
- Lose less money to investing fees by using annual rebalancing and avoid selling investments
- Do not borrow money to invest, it’s an investment time-bomb waiting to blow
- Get all the free investing money through tax deductions and special programs
Stop trying to beat the stock market and understand what’s really important in investing. You’ll actually ‘beat’ the average investor by playing with your rules and by reducing your risk with diversification, saving money on fees, not borrowing to invest and getting the free money. It’s the only way to win the stock market game!