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Try your hand at investing with our Fantasy Fund Manager game – then do it for real, to protect yourself from inflation

February 14 is an important date – and woe betide anyone who forgets it. Yes, that’s right: it’s when our Fantasy Fund Manager competition kicks off.

Players have six weeks to grow a virtual pot of £100,000 by investing in a minimum of five shares or trusts, competing for a grand prize of £7,000 (not a bad return, considering it’s free to play). There will also be £2,000 for the runner-up and £1,000 for the bestperforming fund each week.

While Fantasy Fund Manager is ultimately just a game, it’s a useful tool for anyone who wants to try their hand at the stock market – without the downsides.

In the current climate, investing is crucial. Inflation reached a 30-year high of 5.4pc in December and the Bank of England expects it to hit 7.25pc by April. There are no savings accounts that offer an interest rate anywhere near this. At the current rate of inflation, £ 1,000 kept in an easy access account paying the average rate of 0.21pc would lose £49 over a year.

Meanwhile, the soaring cost of living means you need your cash to do more. Successive rises to Bank Rate this year will make your mortgage more expensive. In April, energy bills will go up by half and your taxes will increase.

So putting your money in the stock market is crucial if you don’t want the value of your savings to deplete before your eyes. This is risky, as the value of your investments can go down as well as up. But in a way it’s less risky than leaving your money in cash, where it is guaranteed to go down. The swings can be wilder and more volatile, though.

There are ways to mitigate this. First, watch the pennies. Invest via a stocks and shares Isa, where your gains and dividends will be tax-free, and check the fees at the provider you use and on the investments you buy. Second, pick funds instead of shares. These are baskets of stocks picked by a professional, so you won’t lose everything if one firm collapses. Passive funds, which track an index, are an easy way to spread your money and are typically cheaper.

Third, diversify your portfolio. Make

Fantasy Fund Manager

Our investing competition will run from Feb 14 to March 28. Sign up for free and build your portfolio here:

telegraph.co.uk/fantasy-fund sure you aren’t too exposed to any particular region, sector or company size, so you are protected if one area falls from grace. Four, think long-term. Aim to leave your money invested for at least five years, if not decades. Don’t try to time the market or make quick money.

Five, drip-feed your money. Instead of putting a large sum into the market, which could plunge the next day, put small amounts in regularly. This will also help you benefit from “pound cost averaging”, where the same amount of money buys more when markets fall.

These are the five basic rules of investing. But the fun thing about Fantasy Fund Manager is that you can throw them all out the window. Plough in all at once. Forget diversification. Think short-term. And aim for maximum profit.

Previous winners have gone allin on healthcare stocks, gold miners or shares in firms primed for a takeover. Some successful players chopped and changed their holdings every day, chasing the greatest gains.

But as we know, past performance is no guarantee of future results. So what method will you try to get your hands on the grand prize?