Investing Experiment: 06/02/2017

It has been one year since I started my investing experiment on the Investopedia simulator. I joined the “Start with $10,000” game, where the user is given $10,000 and allowed to invest the money however they choose.

Here were the strategies when I first started this investing experiment. The first was to earn money fast through monthly dividends. The second strategy was to grab shares of large companies that would likely grow.

The Results
The experiment began on 05/25/2016, and on the one year mark, 05/25/2017, the total value of the simulator account was $10,483.85. It is a bit frustrating that I never reached $11,000. My all-time highest value was $10,882.62 on 08/02/2016. Overall, it isn’t too bad – $483.85 more than what I started with.

A line graph of the account values in my investing experiment

 

My cash value started at $1467.63 and ended at $1796.56, which meant I got an average of about $27.4 in dividends each month. Considering the prices of some of the ETFs I had purchased, I believe I may have received a bit more if there was a dividend reinvestment option. I find it funny that Investopedia has a few articles about dividends, yet their simulator does not allow us to see how it can affect our investment growth.

In hindsight, it would have been better if I had started two different simulator games to try out the two strategies. At this point, it would take a lot calculations to figure out which payouts came from the monthly dividends of Strategy 1 or the quarterly/yearly dividends of Strategy 2.

The market value of my stocks started at $8264.65 and ended at $8687.29. There is little I could do to change the outcome of this part of the account. I did not have the resources or the time to monitor the economy and make adjustments when something big happened. I wanted to find stocks that I could hold onto for a long time and know they would grow. The biggest events that could have potentially affected my portfolio were Brexit and the U.S. Presidential election. From this one year snapshot, I think I found stocks that have relatively stable growth.

Future Plan
I managed to save some actual money in the last year and decided to follow Strategy 1: the Monthly Dividend Strategy. This decision was mainly because the stocks in Strategy 2 are expensive and I wouldn’t be able to purchase many shares.

The current plan is to use Strategy 1 to get faster growth than letting the money sit in a savings account. I could not find other stock simulators that would allow for dividend reinvestments, but most real brokerage accounts seem to have this option. In the future, I plan to sell these shares and purchase the stocks in Strategy 2. Hopefully, they are still stable when this event occurs. If they aren’t, I believe I will have gained more experience and be able to more confidently create a better portfolio.

 

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