A new Web site that launched publicly last month mixes elements of popular social networking sites and finance.
TheUpDown.com gives novice investors 1 million “virtual” dollars to create an online stock portfolio.
“The site is great because you get paid for performing well and there isn’t any risk,” McCormick senior Asaf Elani said.
Elani is the site’s campus representative at Northwestern and has been an active member of The UpDown since its Sept. 5 launch.
Though it is new, The UpDown is “exceeding expectations,” co-founder Michael Reich said. The start-up site, which is funded by German investor Joachim Schoss, currently boasts just fewer than 7,000 members.
Membership to the site is free and members of The UpDown can create and maintain stock portfolios using fake money. This way, beginning investors can gain experience investing without the risk of putting real savings into the stock market.
“It’s a great educational resource for new investors; there are polls and discussion boards where students can share knowledge,” Elani said. “There’s nothing to lose and you can learn a lot.”
Though users buy and trade with fake money, The UpDown offers opportunities for real monetary compensation based on performance and stock analyses. The site encourages users to share knowledge and investment secrets by rewarding the authors of top-rated stock analyses.
“We believe that with good people with fake portfolios, we can identify talented investors,” Reich said of the long-term goals of the site. Users can earn money based on the performance of their portfolios against the S&P 500, an index of stocks from the 500 large corporations.
The Web site will not only identify skilled investors; it will also identify popular stocks, said Reich, who attends Harvard Business School.
“We plan to use data from the site to identify stocks people will really want to buy,” Reich said. Though Reich said this step will take three to six months, The UpDown has big plans for the site, including a career section which would allow employers to scout and recruit talented investors.
This month, The UpDown announced its $10,000 Student Investment Competition, which is open to students from across the United States and Canada. Twenty cash prizes will be awarded based on portfolio performance and analyses ratings.
University of Kansas graduate Jameson Koepke, 23, is currently the site’s top earner, investing under the alias “madhatter.” Koepke, who has been investing for five years, said he uses information from The UpDown when considering his actual portfolio.
“(The UpDown) gives you a good idea of where people are putting their money,” Koepke said. “You can see who else has written on different stocks and what their ideas are about them. Especially if you’ve never had market experience, it’s a good platform to start learning, trying out ideas and developing your own strategy.”
Reich agreed the site serves a great educational function to young and inexperienced investors.
“It’s really interesting to see people use the site,” Reich said. “People can learn a lot without the risk. It gives (The UpDown users) a big advantage.”
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