Byte Monkey

Pretty much everyone I know who invests in the stock market, seem to be very confident of their ability to pick good stocks. Ability to beat the market is apparently to be found in abundance.

Stock market is a essentially zero sum game (if you take out dividends from the equation). For every Rs/$/Euro/etc. you make, someone must loose an equal amount. So it seems odd that everyone is sure they are not the losers. Surely some of them must be

Assuming some people indeed can outsmart the rest, who are they. Are you one?

Wouldn’t it be great if one could figure out objectively…Risk-free

Yes it is possible to find out, risk-free. The tools are available, but few use them. There are multiple websites which allow you to practice investing, with real stocks, but virtual money. The sites pull almost live price quotes and gives you virtual money to invest. The stock prices are usually delayed by 15-20 minutes (true live feed is expensive).

Without risking your own money, you get to test how good you are.

Here’s a roundup of few such sites.

(Recommended)

Smartstocks is a free site with 15-20 minute price delay, gives you $1 million to invest in US stocks. You can manage your portfolio, buy, sell, compare results of other investors. You can also create/join groups of likeminded investors, and see how the group performs overall. In all a very simple to use and effective implementation that feels very close to actual investing. I recommend this for US listed stocks.

Investopedia is another leading stock market simulator, which gives you $100K to start with. Has fewer users that Smartstocks, but is backed by the big name Forbes, This too is based on the US stock market.

Virtual Stock Exchange backed by another big group (Marketwatch). It promotes the site as a stock market game. The features are geared towards setting up a game scenario you create. You can also join a game someone else started. I kind of like the smartstocks’ simpler approach. This could be fun if you like it.

Now for some options to try out your hand in the Indian stock market.

 (Recommended)

Moneybhai, is one of the most popular Indian stock market simulator. It is backed by moneycontrol.com. The features are similar to Smartstocks, but looks more glossy. Like all the sites in this post, this too is a free service. It is based on NSE stocks. You start out with 25 Lacs Rs.. There are interesting additional options like short selling and brokerage fees, all virtual. It also includes a message forum where you can bang your head with other virtual investors. I recommend this for India listed stocks.

Markethero is another Indian stock simulator, which also doubles up as a social network (friend list and such). A slightly different approach that the standard stock simulator, features options like challenges for real money. It allows trading of stocks from NSE and BSE with a stock price delay of 10-25 minutes. You start out with 10 lacs Rs. It doesn’t look like the site has a huge user base, but if they keep focused on the basics, rather than leaning on fun and games, I think it will be taken more seriously.

Fourstocks is a prediction simulator of stocks in Nifty and Sensex. It leans towards stock market prediction. You pick a stock and rate it based on your prediction. Others also make their predictions. You make points for good predictions. They hope to identify good stocks and good predictors through this. There is no actual or virtual investing involved. I am a little skeptical of this approach, because it kind of promotes herd mentality, which in turn promotes losing money. Also successful prediction in the past could be attributed to luck just as much as talent.The only reason I mention it here is because it chose to take a different path. It might be your cup of tea; who knows

So there you are, three websites each for the US and Indian stock markets, to practice and test your vaunted stock picking skills.

If you are a bad investor (which most probably you are) don’t let anyone say that to you. Find it out and say it to yourself

Remember, whether it is stock markets or lotteries or pyramid schemes or scams, more people lose money due to overconfidence than to stupidity.

Have FUN