New Web site benefits aspiring investors
Jenn Metz | Monday, October 8, 2007
The UpDown, a growing Web site that gives members virtual money to play the stock market, is giving a community of investors the chance to earn real money for their free online portfolios.
The Web site, which has been called the “Facebook for Wall Street,” went live Sept. 4 on CNBC’s “On the Money.”
Junior Patrick Martin, who uses the site, said the UpDown is a “simple way of seeing how others go about making their investment decisions.”
“The idea of a Facebook-like site for investors to pick stocks and see both what [others are picking and why] is a novel idea that might revolutionize investing,” he said.
Like Facebook, students from Harvard University founded the UpDown. Michael Reich, the chief executive officer, is a Harvard Business School student, as is chief financial officer Georg Ludviksson. Phuc Truong, the chief technical officer, is a 1998 graduate of Harvard.
Brendan McManus, a Notre Dame junior from the Boston area, works for the Web site and contributed to its launch in September.
“We’ve reached a solid critical mass. … We’re still growing very fast, which is encouraging,” he said.
The Web site provides a platform where investors can view, share and rate high-quality stock analyses and investment ideas. It allows members to gain access to investment information and join or create investment groups. There are currently more than 200 groups on the UpDown.
Users manage virtual stock portfolios of 1,000,000 virtual dollars and submit stock analyses. If members can invest virtual dollars to generate a return that outperforms the S&P 500, the Web site will pay them in real money.
“You can join for free, try out investing skills and if you are really good at it, you will be rewarded,” McManus said. “[We think] a large number of quality members can come up with better investment plans and strategies than just one highly paid fund manager.”
Currently the UpDown is holding a $10,000 student competition. All college and university students can enter for free and compete for a share of $10,000.
“This is a great opportunity to make a lot of real money and compete against a talented field of young investment managers,” McManus said.
The UpDown hopes to attract a wide variety of users, McManus said.
“The site is open to everyone who is passionate about investing – professors, students, people who just want to learn and anyone in between,” he said.
Part of McManus’ job entails contacting student investment clubs at top universities like Notre Dame, Northwestern and Ivy League schools. By marketing to current users, he helps the Web site gain critical mass and build a brand.
The president of Notre Dame’s Investment Club, senior Lindsay Meyer, suggested that the club’s members create personal accounts on the UpDown and manage portfolios.
“This is an excellent opportunity to be more of an active trader, versus our club goal of creating value by holding securities for longer time horizons,” she said.
At a recent club meeting, members spent time evaluating 100 stocks for inclusion in the Investment Club’s UpDown portfolio, Meyer said.
“Ultimately, the performance of this portfolio will hopefully assist us in monitoring the performance of stocks that we are carefully analyzing for possible inclusion in our real $415,000 portfolio,” she said.
McManus, an economics major, called the UpDown “a fantastic learning tool for students and a great way to start and advance your career in investment management. “The career side of this should not be forgotten, especially for students,” McManus continued. “As a student, I really appreciate the opportunity to have hands-on experience.”
McManus also said the UpDown provides valuable contact with other investors.
McManus, Meyer and Martin, all individual users, said they appreciate the free experience the UpDown provides.
“With me being young and not having enough money to put into stocks, I think it’s a great way to practice building a portfolio that I’ll use once I do have the money to invest,” Martin said.