Buy low, sell high.
It’s one of the most basic tenets of investing, but perhaps the most difficult to execute.
32-year-old Hannah Rice discovered this the hard way during the COVID-19 downturn.
Within the space of one month, the snap international lockdown wiped $450 billion – or around 24 per cent – from the Australian share market.
Also read: How a 24-year-old engineer started investing
Rice had bank shares that she’d received in an inheritance from her grandfather in 2017.
“I ummed and ahhed for so long about what to do with them and I ended up getting scared and I sold at the wrong time,” she told Yahoo Finance.
“I sold them in March last year. The exact wrong time to sell them.”
It was this experience that drove her to invest with Sharesies.
Sharesies, a New Zealand-founded fractionalised investment platform, offers access to ASX, US and NZX shares with no minimum buy-in. That means investors can access shares with as little as 1 cent.
It launched in Australia in March after accruing 330,000 customers in New Zealand since its 2017 entry.
For Rice, the no minimum buy-in was critical. It meant she could gain exposure to several stocks without having to deal with a $500 minimum investment, which is common with other investment platforms.
“I could do small amounts in a couple of different places and learn the ropes a little bit more,” she said.
“I was just hesitant to do it with more money until I knew more about it, especially after that stuff-up last year.”
She wasn’t alone, however. The 16 March crash saw $162 billion gone from the ASX in one day as panicking investors also offloaded shares.
That was swiftly followed by a rebound. Some 4,000 new investors poured into the market every day between 24 February and 3 April.
The investment and the returns
Rice is investing in a couple of mining and tech companies. Her goal is to try a few different areas and find out which investments she has the best skill with.
She’s using the experience to get used to the process of researching companies and finding out which ones will make her more money. Essentially, it’s all a learning experience.
Rice is putting in $100 into each share at the moment.
“It’s easier for me to see the percentage increase, and that way I can just get started on a few different ones all at once,” she said.
“I also have cryptocurrency, which feels more like gambling than investing, but that’s alright.”
Rice only started using Sharesies very recently, so hasn’t yet been closely tracking the returns.
“I’ve only been on it for a week, so my gains are only like 4 per cent. But for a week, I’m just happy it’s not negative.”
The experience and the lessons
Rice said it took her less than five minutes to sign up to the platform and then around a day, if that, for the platform to approve her.
With its ups and downs, Rice’s investing journey so far has been pretty typical. But she knows that it’s critical she stays the course if she hopes to achieve her financial goals.
“The way that the world is and money is at the moment, I’m never going to make enough money from working to properly get a deposit down for a house,” she said.
“For our generation, we don’t really have a choice but to try something like this. That’s what my goal is.”
‘Most financially empowered generation’
Sharesies co-founder and CEO Brooke Roberts said she launched the platforms to dispel the idea that all investors were male and over 60.
“We set out to do what we could to create the most financially empowered generation,” she said.
She said Sharesies research has found that essentially everyone wants to be an investor, but most who haven’t have felt either priced out or locked out by the jargon.
“At that time [of the launch in New Zealand], there was heaps of chatter about house prices becoming more and more unaffordable and millennials spending all of their money on smashed avocado. There was this real feeling that you couldn’t get ahead to develop your wealth.”
Ultimately, she said she wanted to give people with $5 the same investment opportunities as those with $500.
“People have really unique perspectives on how they want to build their wealth and what they want to invest in and we really want to support that.”
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