Raise you’re hand if you’ve ever bought a stock and lost money on it.  My hand is raised too.  I’ve done it a few times actually.  I’ve made money too.  Despite the fact that picking stocks and trying to beat the market is a fruitless effort for most, we can’t help but try.

UpDown is a social network, but not like Facebook or MySpace.  Here the primary goal isn’t to make friends, but to beat the S&P 500.  You can make friends but certainly don’t have to.  The website is very simple and free to use.  They make money with ads.

What does UpDown gain by doing the website?  Obviously they gain ad revenue, but there is potential for something greater.  There are people here making over 1,000% in annual returns.  They may be taking crazy risks no normal person would do with real money, but there is an opportunity here.  Banks, hedge funds, and mutual funds may be able to pay a subscription to access the UpDown data.  Doing so would show exactly what the users are doing to make so much money.  This would open doors to investing strategies the fund managers might not have thought of.  Even universities would be interested in this data.

UpDown is a game.  You are winning if you are beating the S&P 500 in a given month.  You do this buy purchasing stocks and ETFs with the money UpDown gives you.  When you sign-up your starting balance is $1,000,000.  Don’t be impressed because it isn’t real money and you can’t do a darned thing to change that.  If you’re new to investing you’ll quickly pick up on the idea buy buying a few stocks.  The trade executes in real time during trading hours.

Those of you with a bit more experience under your belt will be happy to know that all stocks are featured and I haven’t found any ETFs that aren’t either.  You can buy, sell, and even short stocks.  You can use limit orders as well which is a great feature.

The best thing about UpDown is you get to play around with stocks without bearing the risk of losing your own money.  In that respect it’s no different than a game.  But the selling point of this website is that when you win you get paid.  Beating the S&P 500 in any given month will pay you real money.  Of course you can’t expect to earn a living off UpDown because the amount of money you receive is based on how many other people beat it and by how much.  I’ll warn you, there are some crazy good investors playing in this field.  But you might be crazy good too.  It would be nice to see what trades they are making, but the buying data is hidden.

Up until now I’ve talked about beating the S&P 500 like it’s a doable venture for most.  For most of us, beating the index is nearly impossible.  That being said, I beat the index in March and am so far ahead in April.

I won’t bore you (or is it I won’t divulge my secrets?) with the details of my beating the market last month.  I was no where near the top, but I’m proud to beat the market.  If I do it enough with a consistent strategy you’ll likely never hear from me again because I’ve made my millions.  I don’t get up the website dozens of times a day to do multiple trades like some of the more serious users, I’ll maybe adjust 10% of my portfolio a month to test some ideas.  Most of my holdings are indexed to the S&P 500 with various stocks and ETFs, the rest of the money is used for playing around and making strategic bets.

So go ahead and sign up for UpDown, it’s completely free to use so you risk nothing by poking around for a few days to see if it interests you.  It’s been a lot of fun to play with over the last few weeks and I’ve dumped my old service completely.  UpDown is simply the best investing game/service/thing out there.

By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice.

categories: investing