Two smart strategies
Our national winner and New South Wales’s number participant is Oscar L., who played under the name 'Foul Play’. Contrary to his syndicate name, the Year 9 commerce student from Sydney Boys High School played very fairly – and wisely, resulting in the winning portfolio of $59,032.26.
Oscar implemented two strategies to get him first across the finish line. Firstly, he used the tried and tested tactic of dollar-cost averaging. This means that you buy when the price of stocks are on the way down. Oscar explains:
“Using dollar cost averaging helped me drag my average cost per share lower and lower, which helped maximise my returns with low risk.”
To fund this strategy, Oscar kept at least 35% of his portfolio in cash. When the shares that he was watching dipped, he was able to buy them at a good price. Sometimes, he held most of his portfolio in cash. This was because he had formed the option that the market was too volatile or too bearish – that is, shares or sectors were likely to decline for a while.
Oscar’s second strategy involved attempting to predict where the market was going to go. This involved keeping a close eye on international events, watching other markets and doing technical analysis using several indicators.
It’s worth noting that this second strategy can work in a short-term investment horizon like the Schools Sharemarket Game (as it did for Oscar). However, in real life, investing in the sharemarket is a long-term proposal. Generally, investors who choose shares wisely then hold onto them for long periods tend to be the most successful.
In it for the long haul
Lukas M. (‘Lukas’) was this Game’s runner-up. Lukas is a year 10 Commerce student who attends Barrenjoey High School in the Sydney Northern Beaches suburb of Avalon.
Lukas had participated in the Sharemarket Game previously. He confessed that in that game, he had succumbed to panic selling. In other words, he had sold stocks when their price fell, fearing that they would lose too much value. However, what often happens in this situation is that the fall in the share price is only short term – and they rise again after they’ve been sold.
In this round, Lukas focused on investing in technology and energy stocks, which he believed would perform strongly, as well as being patient.
He made a conscious effort to ‘play the longer game’ by riding out temporary rises and falls in the value of his shares. The strategy was a winner. While he didn’t profit on all the shares he held, the combination of early success with some tech retail and holding onto his energy shares boosted the value of his portfolio. He finished the game with a portfolio worth $58,920.48.
Value seeker strikes gold (and oil)
In third place was Year 9 student Logan G. (‘Logan’) from Hunter Valley Grammar School. Like the other winning participants, Logan is a Commerce student from New South Wales.
Logan’s strategy was to search for undervalued companies with strong cash flows that analysts predicted would provide higher dividend returns in coming months. He focused on market sectors that he thought would perform strongly in the current environment of rising inflation and geopolitical turmoil.
Logan believed energy stocks would provide strong returns and solid dividends. While Logan had to navigate a significant amount of volatility, his strategy was successful and landed him at third place with a portfolio of $58,265.33.
The state of things
And a shout out to the State Winners, too. Victoria’s number one participant is Jennifer N., a Year 10 commerce student from St Albans Secondary College. Jennifer focused on the impact of global events on share value. She forecast that the war in Ukraine would impact energy stocks and agriculture. She also diversified her portfolio to protect it against volatility.
Riley J., a Year 9 student from Dalby State High School, was Queensland’s state winner and participated under the name ‘Gone to get the milk’. He considered the current conflict in Europe and decided to invest in the energy and minerals sectors. For him, the hardest decision was when to sell, but eventually keeping all his shares was the strategy that kept him in the lead.
ACT’s state-winner syndicate was ‘The Gold Diggers’ of Trinity Christian School. Fraser, Ethan and Josh decided to concentrate on companies they believed would remain consistently strong throughout the time period of the game, and chose the energy sector as their main focus. They also bought shares in large quantities to avoid brokerage.
Western Australia’s leading participant was Christ Church Grammar School’s Benjamin S., a Year 11 Economics student who played under the name ‘BS Financial Advice’. Benjamin opted to focus on companies with strong business fundamentals including solid price-to-earnings ratios. He also focused on companies recovering from the impact of the pandemic.
South Australia’s winner, Joshua B. of Mercedes College, chose large companies and industries that would benefit from the COVID pandemic and diversified his holdings. Meanwhile, Tasmania’s leading participant, Lewis J., a Year 12 Business student at Hellyer College, used his real-life experience of seeing food prices soar at the supermarket where he works to invest in agribusiness.
Congratulations too to Northern Territory’s top syndicate, ‘Whisper FC’ (Year 9 students Connor and Shaun) from the Essington School, who mainly used technical analysis, believing a data-based approach to choosing stocks would result in better outcomes. They comment that if they were to do one thing differently in the future, it would be to avoid the temptation of day-trading.
Winners from afar
Across the Tasman, our Kiwi winner was Group1 – made up of Year 12 students Nino, Max, Kade and Grace from The St Peter’s School. Meanwhile our international winning syndicate was Lucas, a Year 9 student at The Australian International School in Singapore.
A brilliant effort from everyone.