I like ideas like this for young adults. While I do not bank with Royal Bank of Canada, this is an interesting concept for RBC Direct clients. You get $100,000 in either play money (or possibly Zimbabwe dollars – I would choose the play money myself) and you can invest for fun. It is a good forum to learn more about investing, put your own investment theories into practice, and then actually pull the trigger on trades (maybe the toughest part emotionally of investing is the actual buying and selling, then watching your stock immediately take off in the other direction).
I am sure there are other opportunities to create fun accounts with banks, on-line brokers and related entities, so keep an eye out. In fact, the Financial Post runs a stock market challenge game that is currently underway. Follow the results, learn the process and be set to enrol next session.
Me? For game purposes, I would be buying commodities such as oil and precious metals and non-US dollar denominated investments. At this date I am bearish on the US dollar and believe there is an inflationary risk that will positively impact commodity prices. But that’s just me and I would not recommend this strategy to anyone without examining your personal situation first. In fact, for young adults, I would primarily avoid individual stocks and stick with lower risk, cost efficient, diversified investments such as Exchange Traded Funds. In the coming weeks, I will hopefully explain why I prefer these type investments over placing your college or new home savings into gold or Swiss francs.
