Investing with play money

Generally, you should start investing your real money with mutual funds and Exchange Traded Funds (ETFs) because your risk is diversified. In reality, your best returns will come with purchases of individual stocks...but what stocks should you buy?

I won't try and push stock tips on you but I will offer some helpful advice. Start investing with play money via a stock simulator. Essentially, you are given a set amount of imaginary dollars (from $1,000 to $1,000,000) that you can invest any way you want. You can gamble away your money on penny stocks or buy only the safest of investments...but the key is that your progress will be tracked in the portfolio.

Join the simulator here

Make any investment you want but try and make note of why you made the investment. Bought Microsoft because their Vista operating system is soon to be released? Sony because of demand for the PS3? Try and keep track of why you bought an investment so that when you monitor your progress, you can be aware of what worked and made you money but more importantly, why you lost money. Because if you can avoid losing money, you've done the best possible thing: protect your investment.

Warren Buffet's Rules for Investing
Rule Number One: Don't lose money.
Rule Number Two: Don't forget rule number 1.

If you don't lose your money and still learn from your mistakes, your success isn't in question...only your timeline is.

Until next time,
Thor