Stock market games, such as Virtual Stock Exchange, SmartStocks, Wall Street Survivor, or How the market works, seem like a good way of engaging students in an investments course. Students buy and sell stocks and are ranked by their performance.
However, I try to discourage my students from participating in these trading simulations as much as possible as they legitimize active trading, even though there is an unassailable theoretical argument that active investors lose out to passive investors on average, and very strong data showing that even professional active fund managers with strong incentives and vast resources get consistently beaten by the index, at least in developed countries with highly liquid stock markets. The notion that students can benefit from security selection is thus far fetched. Stock market games are a gateway drug.
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