Yahoo Finance Meet the young investors taking a punt on $100,000 competition
Soaring house prices and slumping savings rates are pushing young Australians into the stock market, with people aged 18-24 making up 27 per cent of those intending to invest with the ASX in 2021.
The same story is playing out internationally, with Fidelity research finding nearly three quarters of women aged 25-40 are investing outside of their retirement accounts.
However, barriers persist, with only 41 per cent of those surveyed feeling comfortable with their knowledge.
It’s a problem Ladies Finance Club founder Molly Benjamin hopes to solve with eToro’s virtual trading platform.
The Ladies Finance Club recently launched its six-week virtual share-trading competition with eToro, allowing participants the chance to invest $100,000 in virtual money and win real prizes.
Yahoo Finance spoke to two competitors about their experiences so far.
Meet Sarah and Melissa: Two investors taking on the challenge
Do you consider yourself good with money?
25-year-old vet student Sarah Webb: I do consider myself good with money, I have budgets for my expenditure and don't go beyond my means of income in expenses.
31-year-old product designer Melissa Barrass: I don't believe I am good with money. I had such little growing up that when I finally got some in my hands, I was hell-bent on the freedom to use what little money I had. I am currently saving but without a budget, it's going at a slow pace.
What stopped you from investing before?
Sarah: I have been hesitant to try investing, as I don't quite understand the share market, and the risk in fluctuations was always quite large.
Melissa: Fear of failure and loss.
Why did you decide to do the share-trading competition?
Sarah: I wanted to do the share-trading competition as a fun way to explore the investment avenue without the risk of my own financial loss.
Melissa: I am finally understanding the importance of financial freedom. I want to make my money work for me, and this trading competition was the perfect way to get my toes wet.
What was your first investment with eToro?
Sarah: My first investment with eToro was sugar and silver. I thought the raw materials were a good baseline to begin with.
Melissa: To no-one's surprise, I think it was Tesla. At the beginning of the competition it was already at a crazy high and even Tesla's doubters were pulling out of their shorts, so I felt, for the sake of the competition, it was going to be a solid investment. All I needed was one month of peak performance... and then Elon Musk decided to finally pay a portion of his taxes … The share price is yet to recover. It will, just not anytime soon.
What was the easiest part of making this investment decision and what was the hardest part?
Sarah: The easiest part of making this investment decision was the trend it was displaying. The hardest part was how quick it fluctuated.
Melissa: The easiest part was knowing that it's all virtual. The hardest part was deciding how much to put in.
What surprised you about investing like this?
Sarah: What surprised me about investing was how quick and simple it was.
Melissa: I didn't expect the closes to take so long. I am impatient and want to reinvest ASAP.
What’s the biggest thing that you’ve learned so far that you’re glad you’ve realised?
Sarah: The biggest thing I’ve learned so far that I’m glad I've realised is the trend is your friend. It is a reliable way (usually) to determine how the investment is going to go.
Melissa: The biggest thing I have learned is that it's not a race. Just participate, learn from mistakes and enjoy the experience.
What’s in your portfolio?
Sarah: My portfolio consists of Apple, silver, gold, copper, ORI, renewable energy, RIO, BHP, PayPal and platinum.
Melissa: Most of my portfolio is made up of tech giants, but I also have smart portfolios such as chip-tech, and I am doing a copy-portfolio of Warren Buffet, because he's the man.
How’s it going?
Sarah: I had made a profit of $15,000 last week, but unfortunately this week, the copper value has dropped which will affect my profits.
Melissa: Overall, it's not going so good. I am currently teetering on the loss side of things. Tesla and (as of the last 12 hours) Ali Baba has plummeted the last week or so. But this doesn't hurt so much as I honestly wouldn't invest in these companies in the real world - they don't meet my environmental, social and governance (ESG) standards.
What’s your goal for the competition in terms of ‘money’ you’d like to make?
Sarah: The goal for the competition for me was to make 20 per cent profit on the initial amount, so ideally a $120,000 finish would be great.
Melissa: I delayed starting the comp because I really wanted to sit down and research ESG companies that could give me a strong return within the month, but then I realised it's just a game and I should invest in whoever I wished. Remaining in the black is all I care about as a long-term investor hopeful.
We’re a few weeks in, but do you reckon you’ll invest real money once the competition is over?
Sarah: I may invest real money if I feel comfortable risking a little bit.
Melissa: Definitely. I am still finishing off a course on individual stock analysis that I purchased from a popular YouTuber. Once that is over, I will have the knowledge to back my investing decisions.
Follow Yahoo Finance to find out Sarah and Melissa’s insights at the end of the competition, and what they plan to do next.
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