Practice portfolios
“ Meme stocks can become extreme winners , then , once the fuel of speculation has run dry , extreme losers ”
Rob Morgan Chief investment analyst at Charles Stanley
“ Sometimes it takes the loss of real money to feel the pain – just make sure it ’ s a relatively trivial amount .” Perhaps most important is not assuming that your job is done once you have set someone up with a practice portfolio – while they won ’ t be using real money to begin with , this can quickly change . “ Build knowledge and experience in a safe environment where there are only paper losses ,” adds Morgan . “ It ’ s not real money , but it ’ s best to monitor and hear their thoughts – what are they getting out of it ? What is it telling them about investing ?” Children are often told that practice makes perfect , but this isn ’ t true : practice makes permanent and bad habits can become ingrained if not corrected . This can prove counterproductive in most walks of life ; when it comes to investment , it can be catastrophic . While it ’ s a proud moment watching your children spread their wings , it ’ s best to make sure they can walk before they can run , never mind fly .
Issue 93 - March 2023 / 41 /