Yahoo! Finance has announced it will hold the first ever fantasy finance game set to run from March 5th to May 25th. Players will compete using their investment genius (or not) to amass the greatest wealth using an initial virtual investment of $100,000. Prizes will be awarded weekly based on gains. The competition features $1000 weekly rewards, but a $50,000 grand prize will also be awarded at the end for the largest grower.
Any of the stocks or Exchange Traded Funds (ETF) on major US exchanges qualify for trading in the competition. Those who grow their portfolio's the biggest will receive the weekly prizes, but will also earn accomplishment badges along the way. Traders can earn additional investment capital by correctly answering daily trivia questions which are based on investment knowledge.
If you're thinking of testing your skills, here are some tips from Jeff Macke, host of Breakout on Yahoo! Finance:
These are some mistakes to avoid with your investments:
"Recency" - Buying what has recently been up, selling what has fallen down
Chasing yesterday's winners, then panic-selling when they go down is the surest way to achieve terrible performance.
Telltale signs and risks of over-confidence include trading too much and failing to properly diversify because you believe your own ideas will work so well.
Believing That Great Companies Make Great Stocks
Even though growth companies earn a lot more, "markets price for risk." The premium you must pay to own these so-called leaders, has already priced-in the higher growth rate, leading to lower expected returns.
Failing To Differentiate Between Information And Wisdom
Know the difference between information and something you can actually use to make money. Unless you know something that nobody else knows (which is unlikely), "information is not value relevant."
Listening to Experts Who Give Forecasts
Research shows little if any advantage can be gained by following the changing public proclamations of outspoken and often over-confident pundits.
So, if you have the skills, but not the capital, here's your chance to earn some real cash and a opportunity for recognition. I think it's going to be exciting! If you're interested visit the Yahoo! Finance site.