When it comes to receiving investing income, your retirement portfolio and therefore you and your family's personal financial security are at stake.
That's not a game. Don't play around with your money.
Investing Simulation Games are Only Games
A few weeks ago, I thought about people who play online fantasy investing games, where they choose portfolios and then compete with others over a particular period of time. I decided it was a waste of time at best, and could help promote bad investing habits.
Such games or simulations encourage people to believe it's possible to pick stocks that beat the market through skill instead of chance. It also encourages you to aim for the short term instead of investing for the long term. So I wrote an article advising income investors to stay away from such games.
I think it's terrible that schools are encouraging students at these games by holding the competitions themselves.
This morning, for some reason, I thought about them again, and changed my mind -- a little.
Unless You're Wealthy Enough You Can Afford to Lose Money, Keep Your Real Money in Income Investments
With one provision -- that you play such fantasy investing games only as games.
Don't take them seriously, that is. When it comes to your money invest for income.
For one thing, many investing books advise people who feel tempted to take big risks on stocks they pick, to devote up to 10% of their portfolio as "mad money" to gamble with.
That always seemed like poor advice to me, for most people anyway, because cutting your serious retirement portfolio by 10% can make the difference between security and insecurity in old age.
(Of course, if your income is high enough to allow you to invest $50,000+ per year, then you can afford to spend 10% or fun stock picks. Most of us aren't at that income level, however.)
People Love to Play Games, So Satisfy Your Stock Picking Itch With Fantasy Money
And I thought about the human love of games. Most people enjoy playing games, so if you're going to spend time on games anyway, there's nothing wrong with playing a fantasy investing game instead of some boring game where you blow off the heads of aliens.
Just remember that when you pick stocks or other investments with fantasy money, that's your results are just as imaginary as alien invaders.
Yes, I know the real stock price went up. Give a thousand people $100,000 in play money to invest for six months, and somebody will be lucky enough to choose stocks that go up more than everybody else.
If you do win, congratulations, but don't think that means you can choose winning stocks for your retirement portfolio over ten, twenty or more years.
The Real Game of Life Lasts Much Longer Than Online Games
A realistic investing game would have to last at least twenty years -- but nobody would play that long.
So play as many fantasy simulation investing games as you wish. But don't confuse that with real life, which lasts a much longer time.
For your retirement money, put it where you'll receive investing income.
Author Resource:
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