I’m not sure what it’s like to have “extra” money. Even if I did have cash left over to invest after rent, bills, and my travel-wine-and-shopping allotment, I wouldn’t know how. Should I ever manage to save a little nest egg, SprinkleBit can show me how to turn it into a souffle (that rises and rises).
SprinkleBit is a social virtual trading platform. Its mission is to empower individuals to build a strong stock portfolio by providing resources to help them make informed financial decisions. Today, the company has announced opening the digital doors to SprinkleBit University to further educate the novice investor.
On the site, aspiring day traders have access to a stock market simulator where they can get their feet wet without actually conducting transactions. Experienced investors can use the simulator to test out new strategies. There is also the “Major League Stocktrading,” a fantasy online trading league, and a social media component that lets newbies observe and learn from other traders’ actions. They can view portfolios, follow other investors, and see the motivation behind certain actions, as well as ask for tips and engage in discussion.
In addition to assistance with the nitty-gritty aspects of trading, crowd sourcing is also used to provide insight into the ever-changing stock market. Founder Alexander Wallin created the Voting Power Index (VPI) to serve as a virtual advisor for do-it-yourself traders. The technology analyzes data to produce a buy/sell signal for stocks, advising what stocks to trade at what times.
“During an investment class, I learned that at certain point, the crowd is always smarter than the smartest person in the room,” Wallin said. “I wanted to apply that to investing. With the VPI, we found that it is possible to create a portfolio that outperforms the S&P 500.”
Wallin developed the platform while working on a graduate degree at University of California, San Diego. His research found that 2 in 5 Americans give themselves a “C” or lower when it comes to investing, while 53% of investors feel social media helps them be more knowledgable. Furthermore, people aged 22-34 are taking more responsibility for their finances at a younger age and seeking a more collaborative approach.
SprinkleBit is geared towards these novice investors, which comprise 94% of its user base. The university will offer a curriculum with modules like “Finding Your Investment Objective” and “Understanding Risk”, as well as overviews of various sectors and industries.
“Students can then take what they have learned and apply their skills by trading on SprinkleBit’s virtual trading platform,” said Wallin. “This is a safe and entertaining place for investors to build and hone their trading skills using real-time market data. Once they have built up their confidence, they can start to put real money in the market seamlessly on our site.”
SprinkleBit does not currently offer actual brokerage, but secure online trading of equities, options, bonds, municipal securities, and mutual funds are coming in the next month. The company will also offer portfolio management tools. It was founded in 2011 when Wallin completed his research, and the current platform officially launched last month.
Souffle making and investing in the stock market actually have many things common. In both cases, intuition is as important as education and skill, and practice is no guarantee of perfection. There are literal ups and downs, and split seconds can mean the difference between success and failure.
VB’s research team is studying mobile user acquisition: Chime in here, and we’ll share the results.