UpDown: Learn About Stocks and Make Money, Too

Getting started investing is no easy thing. There's a lot you need to learn if you don't want to get burned so it's common for budding investors to begin their stock trading careers on paper rather than by jumping in with real money. The Web has made "paper trading" a whole lot more fun via stock market simulation games that let users build real portfolios with virtual money. There are several good ones, but UpDown stands apart because it lets new investors earn real money as they play without them having to risk a dime.

So, what do you do on UpDown? You buy and trade stocks listed on American stock exchanges. As a beginner, you'll receive a million virtual dollars to trade with as you wish. Don't worry: if you make some bad moves, you'll be able to reset your portfolio (you can do this once every three months) and get a new cool million to play with. It's certainly much preferable to lose virtual money as opposed to real money. UpDown would still be great even if was just a learning platform, much like Marketwatch's Virtual Stock Exchange and Investopedia's Stock Simulator. However, it's more than just a learning tool: UpDown sponsors monthly and yearly stock contests that reward players for outperforming the S&P 500. That's certainly not an easy feat -- sometimes even professionals have a lot of trouble doing that -- but I think it's fantastic that "paper trading" can actually be profitable!

The top ten UpDown traders who beat the S&P each month get cash prizes ranging from $500 for the best trader to $50 for those ranked 3-10. I've never had a top 10 finish yet -- I'm probably too cautious, even with virtual money -- but I have beaten the S&P a couple of times and gotten $0.10 prizes just for doing that. Your odds of winning one of the big prizes aren't that great (there seem to usually be between 7,000 and 8,000 players each month), but if you're serious about learning how to be a good stock investor your time on the site will be well-spent regardless of whether you win a prize or not. Learning to invest could be worth a lot more than $500 a month, after all!

UpDown is not the only site that offers cash or prizes to virtual traders though I do think it is the best. One of its biggest competitors is Wall Street Survivor which has monthly and weekly prizes. Prizes there can vary, but you'll most likely have to be a top three player to get a cash prize (they have two tiers of prize winners based on trading activity, though, so there are really two sets of monthly prize winners). Lesser winners have to content themselves with such items as Amazon gift cards and newsletter subscriptions -- UpDown's cash only approach is a big advantage for it in my opinion. Wall Street Survivor also seems to require photo ID verification of its winners which seems odd in this day and age of identity theft. At least WSS is free just like UpDown; there are also a bunch of virtual trading sites that require players to put money into the game if they want to make money themselves. I can't endorse or recommend any of these sites. They are really targeted towards a different group of users, namely people who already confident in their stock trading capabilities and want to take on the world. UpDown is definitely a better choice for people just trying to learn about stocks which is the category I belong to.