If you're an investing beginner, the prospect of putting your money at risk can scare you to death. To get used to how the stock market works, you might want to give your investing strategies a practice run before you actually invest real money.

Enter mock portfolios
While you get comfortable with the mechanics of investing -- researching companies, placing buy and sell orders, etc. -- you can see how your decisions play out, even in the short run. (You shouldn't necessarily draw too many conclusions from a stock or the market's behavior over a few months, or even a year or two.)

Many sites let you set up an online mock portfolio for free, including AOL, Yahoo! Finance, several discount brokers, and our own Motley Fool CAPS. Tell the sites when you "bought" shares of a stock, and at what price. Then track your performance, observing how your holdings behave over time. The practice will help you learn more about yourself as an investor.

For example, Buffalo Wild Wings (NASDAQ:BWLD) shares had a big one-day drop of more than 11% last week, after the company announced disappointing earnings. If you had invested $10,000 in Buffalo Wild Wings stock shortly beforehand, you'd have lost more than $1,125 in a single day.

Would that kind of quick loss freak you out? If so, you might want to keep sharpening your investing skills before you plunge into the market.

For the experienced
Mock portfolios can also assist more seasoned investors. If you'd like to test an intriguing investment strategy that has boasted solid back-tested results, a mock portfolio can give you a no-hassle trial run.

Suppose you want to invest in large-cap stocks that have earned a top rating of five stars from Motley Fool CAPS, and which are down over the past year. A recent screen for those characteristics included the following stocks:


1-Year Return

Gilead Sciences (NASDAQ:GILD)


OSI Pharmaceuticals (NASDAQ:OSIP)


Valero Energy (NYSE:VLO)




Covanta Holding (NYSE:CVA)


Pharmaceutical Product Development (NASDAQ:PPDI)


Source: Motley Fool CAPS.

With a mock portfolio, you can safely see how your picks might pan out, but still have time to ponder the strategy further.

Of course, if the idea of all of this effort is starting to make your head hurt, there are plenty of other workarounds. For an easy way to start investing and increase your position over time, you can skip mock portfolios altogether, and invest in a low-cost stock mutual fund instead. There's no shame in a slow, careful entrance to the market -- especially if you're new to investing.

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This article was originally published on Feb. 4, 2009. It has been updated by Dan Caplinger, who doesn't own shares of the companies mentioned in this article. Pharmaceutical Product Development is a Motley Fool Stock Advisor selection. Buffalo Wild Wings is a Motley Fool Hidden Gems recommendation. The Fool owns shares of FPL Group. Try our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.