Ask Kim
How can I dip my toe into online investing?
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
March 27, 2000
How can I find out the basics of investing online? There are a few of us who have never done any investing other than buying mutual funds. Any ideas where to learn for people with no experience?
A good way to test the online-investing waters is to sign up with a stock market game, such as the one offered at MainXchange.
You’ll get $100,000 of virtual currency (called BuX) to invest anywhere you want. You can either select companies from the “marketplace” screen, which is divided into sectors, or type in the symbol of a stock you’re interested in and see a basic description of the company’s business.
The best feature: The game takes you through the online investing steps, which are similar to real-life online investing (it’s so realistic, you may get a little anxious investing the $100,000 of virtual money).
After you pick a stock, one screen asks how many shares you want and whether you’d like a market or limit order (the “resources center” defines the terms), and the second gives you a chance to cancel or confirm your order -- just like the screens you’d see when investing real money with a real broker.
You can also monitor the performance of your portfolio, which helps you learn how quickly stock prices can move up and down. If you stick around long enough, you’ll experience first-hand the value of buying and holding.
One drawback to the game: Because the site’s demographics tend toward teens, the company information is sketchy -- highlighting companies that do fun things but aren’t necessarily good investments.
To learn about the stock-researching process in more detail, visit Quicken’s Stock Evaluator and Microsoft MoneyCentral Investor’s Research Wizard, which walk you through the steps for analyzing a company’s prospects. For other helpful research sites on the Web, see our Stock Search.
We also have several articles that can teach you about stock investing. Go to our Stock Planning Center to learn how to build a strong portfolio.
When you’re ready to pick a brokerage firm and get started with real money, check out our annual online brokerage survey for an assessment of online brokers, their fees and services and see how 20 of them stack up.
Our top pick: Muriel Siebert, has reasonable commissions and no minimum amount to open an account.
