Create Finance Derby

A “Finance Derby,” isn’t a common financial term. However, we can understand it as a simulated competition centered around financial performance. Think of it as a fantasy football league, but with stocks, bonds, or other financial instruments instead of athletes.

Concept

The core concept revolves around participants building hypothetical portfolios and tracking their performance over a defined period. The portfolio with the highest return at the end of the period wins the derby.

Setting up the Finance Derby

1. Define the Scope: Clearly establish the types of assets allowed in the portfolios. Will participants be limited to stocks, or can they include bonds, ETFs, cryptocurrencies, or even options?
2. Establish Rules: Detail all the rules of the game. This includes rules on short selling, leverage, minimum number of assets, and acceptable transaction fees. Specify the starting capital available to each participant.
3. Choose a Platform: Select a platform to track portfolio performance. This could be a dedicated investment simulator, a spreadsheet, or even a simple notebook. The platform must provide real-time or near real-time data on asset prices. Investment simulators like Investopedia’s Stock Simulator or MarketWatch’s Virtual Stock Exchange are good choices.
4. Determine the Duration: Establish the start and end dates of the competition. A typical finance derby might run for a month, a quarter, or even a year.
5. Recruit Participants: Gather a group of individuals interested in testing their investment strategies. This could be friends, colleagues, or members of an investment club.
6. Monitor and Enforce Rules: Regularly track the performance of each portfolio and ensure that all participants are adhering to the established rules.
7. Declare a Winner: At the end of the competition period, calculate the final return for each portfolio and declare the participant with the highest return as the winner.
8. Prizes and Incentives (Optional): To add excitement, consider offering prizes to the winner or top performers. This could be anything from bragging rights to gift cards or a small amount of cash.

Benefits of a Finance Derby

• Educational Tool: It provides a hands-on learning experience about investing and financial markets without risking real money.
• Risk-Free Experimentation: Participants can test different investment strategies and explore various asset classes without financial consequences.
• Competitive Fun: The competitive nature of the derby can make learning about finance more engaging and enjoyable.
• Networking Opportunity: It provides a platform for individuals to connect with others who share an interest in finance.

Important Considerations

Remember that past performance is not indicative of future results. The finance derby is a simulation and should not be used as a substitute for professional financial advice. Always consult with a qualified financial advisor before making any investment decisions.