up one level
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2016-12-21
Tags: #investing
Learning about Stock-investing by Playing a Virtual Stock Market Game
By w̶i̶e̶l̶d̶l̶i̶n̶u̶x̶.̶c̶o̶m̶ author Morgan Jassen
I started to play TD Bank Virtual Stock Market Game (http://virtualstockmarket.tdbank.com/).
I'm trying my "buy and hold" strategy there, starting by buying shares of 10 companies, and holding them to see how they do in the coming year.
It's a game, but as a beginner I really do think I'm learning by playing.
For example they told me that I'd have $100,000 to begin the game, however, on the game's control panel, I see that I have the ability to buy $200,000 worth of stocks, called "Buying Power", to begin with. What?!!?
Is that because of some sort of leveraging? I don't know what that "Buying Power" is nor whether I'd want to do it, however if it is a feature of a stock market game, then it might be common practice in the real world. So I should at least learn about it to relieve my ignorance.
Update: A few months later (2-3 months later), after having started playing the game (most of which time I didn't log in, I just "held" the stocks and let it sit there), after having bought shares of 10 different stocks, the Stock Market Game says I have an overall return of 1.25%. Hmmm... I'm glad it is a positive amount. (If I get $1.25 income for each $100 that I invested, then that is better than a loss and is better than nothing.) Note: the virtual ticker symbols of the virtual stocks that I virtually bought in the virtual game were: M, BID, CSCO, TM, SBUX, MAR, WMT, CAT, LOW, TIF.
Update(cont'd)... But wow! This result shows that this is not a "get rich quick" stock market simulation game! (good thing I didn't expect it to be ;D ) Now another thing to look deeper into, is whether that 1.25% increase was the principle, or whether that included dividend income, or something else. Because if there is dividend income on top of that, then that would be more desirable!
Update(cont'd)... One thing I am grateful for, is to TD Bank Virtual Stock Market Game, for having given me the ability to learn wihout having to put any money down. As a complete newbie it can be hard to overcome the feeling of risking real money, so this game is a welcome way to learn before I start.
Update(cont'd)... One downside of this though, that I feel after having played it, is that I'm starting to feel that this is a bit of a waste of time. How? I feel like it would be about 10 times more effective to learn by actually investing, than by playing an investing game. Alternatively, if I could learn stock investing by looking over someone's shoulder while they are doing it, then that would also be much more effective. So I think this has helped me realize what the next step is, and that just might be to go invest rather than go play an investing game.
In conclusion, from playing the virtual stock market game, I feel that I've learned what I need to learn next, and also I've gotten more of a feel for stock investing. However at the same time I realized I feel that actually investing would be a more effective way of learning.
[2019 edit: Moved to: https://i̶n̶v̶e̶s̶t̶o̶r̶w̶o̶r̶k̶e̶r̶.̶c̶o̶m̶/2016/... .html.]