New to Investing Do Trial Runs Using a Mock Portfolio

Various sites such as Yahoo! Finance and AOL allow users to build a mock portfolio online. In a mock portfolio, the user makes imaginary investments in various stocks. These site tools map out the losses and gains on the stock investment of the user, which can later be used for analysis of the investment strategy by the user. It gives an idea of how the investment would have done in the real stock market.

Mock portfolios are a great help to those people who have just started investing in stock markets. Investing can be scary for beginners as it is very difficult to understand and chose between different investment options. The fear of losing the money also scares people who do not understand the basics of investment.

In order to invest properly, you need to have a good understanding of behavior of stock market and this will only come with experience. Until then, you might just want to try out your decisions using a mock portfolio before you jump into investing in real stocks and other financial instruments.

With a mock portfolio, you can do everything that you will do in reality when investing in stock markets. You should research and select a few companies whose stocks you want to buy. Then select them for your mock portfolio and check how your investments would have fared in the stock markets over a period of time. In fact, you can even create a mock portfolio yourself on paper and keep a track on your own; just that this would be less organized and more difficult.

The online mock portfolio tools track the performance of your investments based on the real stock market conditions. They keep a record of the date and quantity of your investment. When you are able to beat the market consistently, then you can feel confident about making real investments in stocks. Mock portfolio can help you identify the common mistakes, which you can avoid when you make your actual investments.

Mock portfolios are also useful by long time investors who want to try out new investment strategies. For instance, you might have read about a new strategy or come up with one on your own and now want to check its results in live conditions – in such a case, using a mock portfolio will be the most risk free way of doing so.

If it appears that the stock market is not your cup of tea, then you can choose other options of investments such as mutual funds or money market funds, which are less volatile and easier to manage.

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