Sharemarket Game news archive
Read previous tips and updates for the Sharemarket game
More resources
- Blackrock, 2021 global outlook: A new investment order
- ASX, Analysis tools, ASX
- Cory Mitchell, How to Use a Moving Average to Buy Stocks, Investopedia
Game wrap-up
Another gripping Sharemarket Game has come to an end with a clear winner – 18-year-old Campbell (BUY GME AND SILVER) from New South Wales. He crossed the finish line with a final portfolio worth $70,435.
Coming in at second place was Victoria’s Mark (MarkRicho). Like Campbell, Mark’s view that lithium mining stocks would increase due to rising demand for electric vehicles helped drive his strategy, leaving him with a healthy balance of $67,833 at game end. And Queenslander Martin (Slurchie) finished in third place with a portfolio valued at $65,858.
National first place winner
Campbell (BUY GME AND SILVER) from NSW
Have you played the game before?
I’ve previously played in the school sector. Now that I’m 18, I decided to step up into the public game.
How did you choose your companies?
I saw the lithium price soaring so I invested most of my $50,000 into lithium stocks as soon as the game began.
What was your strategy/plan?
Buy and hold. Coming out of COVID-19 and a large market dip, I chose an industry that I believed would increase with the market. After holding these lithium companies for over two months I sold everything when worldwide markets started reaching all-time highs.
Not long after I bought back into most of the same lithium stocks for 10-15% less than what I had sold them for – after which they rose to the same price that I’d sold them at.
Did you stick to your plan?
Yes – I bought and held, with only one sale to protect against profit-takers and a market correction.
What was your biggest lesson?
In volatile markets, buy into companies that have a good foundation but have room for long-term growth.
First runner-up
Mark (MarkRicho) from VIC
Have you played the game before?
Yes, more than 10 times.
How many hours a day did you spend on the game – including research etc?
I spent 10 minutes a day checking stock-specific and finance news.
How did you choose your companies?
At the start, I believed exposure to lithium would deliver the best returns over the game. For the last decade I’ve watched lithium’s journey and saw its spot prices rise strongly over the past year as demand for electric vehicles grew.
What was your strategy/plan?
My strategy was to buy and hold the four stocks I had, and continue to monitor the weekly lithium spot prices as well as other commodity prices and sectors. If lithium prices turned flat or downwards then I would consider trading out of lithium and into another sector.
Did you stick to your plan?
I stuck to holding mostly lithium for the first 14 weeks and found myself in the top 10 rankings. It seemed most top 10 players had the same idea. In the last few weeks of the Game, the lithium price increases slowed down, coal prices were trending up and some technology stocks started rising, so I sold lithium stocks and bought into technology and coal – sectors that seemed to have stronger momentum.
What was your biggest lesson?
To stick to your investment strategy and back your own judgement if you have done your research. Lithium stocks dropped 10% in the first few weeks of the game, but finished rising by 30% by the end.
Second runner-up
Martin (Slurchie) from QLD
Have you played the game before?
Once before, but I didn't last the whole game.
How many hours a day did you spend on the game – including research etc?
I only bought and sold the group stocks I was following on days when I could spare the time. On those days I spent less than 30 minutes buying and selling, and up and to 30 minutes monitoring and researching.
How did you choose your companies?
Initially, I used a list of companies that I would normally see as too risky for long-term investments. Toward the end I selected stocks that had had recent bad news or were undervalued.
What was your strategy/plan?
I looked for stocks with a cyclic pattern that I could benefit from in the short 3-month period. I bought toward the bottom of the stock’s price range and sold when I could make between 5-10%.
Did you stick to your plan?
No – about half way through, hoping to catch up with the leaders, I looked at depressed stocks with reasonable fundamentals that had recently had bad news.
Then I sold stocks that hadn't moved, or had losses to give me some spare cash and just held stocks that I thought might get me some gains. The last day was just luck – I was holding IT stocks that went up slightly while everyone else seemed to be holding something that suffered significant losses.
How did you handle the market volatility?
I was attracted to the market volatility throughout the competition but towards the end I tried to maintain enough cash to buy if there was a significant drop.
What was your biggest lesson?
This isn’t the kind of trading I’d do with my own money. It highlighted that the quality of the businesses I was investing in wasn't reflected in the price performance during the game’s short period.
Anything else you think would help other players?
Everyone should have a go at the Sharemarket Game for fun – but don't model your own investments on this type of trading.
League winners
The winning league in the ‘10 players or fewer’ category was ANDO, whose ‘in it for the fun’ attitude worked out beautifully. The ANDO league finished the game with a portfolio of stocks worth $61,324.
Leading the ‘11 players or more’ category was New South Wales league PSV Stocks, who wrapped up the game with a portfolio worth $52,823.
Congratulations to all our winners – and everyone who participated in Game 1 of the 2021 Sharemarket Game. We hope you all enjoyed the experience and learned some valuable lessons about investing.
Here are our winner’s strategies – and lessons learned.
League winner – more than 10 players
PSV Stocks from NSW
What was your motivation to create a league?
Given the recent challenges of COVID, we wanted to get our people involved in something engaging to build team spirit.
How many hours a day did you spend on the game – including research etc?
Probably no more than one hour daily.
How did you choose your companies?
Watching the news, financial reviews and observing trends. We analysed today’s world, to try and work out what was driving each company within the stock market and externally.
What was your strategy/plan?
We tried to encourage a healthy level of competitive spirit between colleagues, so we all invested in different companies. It forced us to also stay on board and not put all our eggs in one basket.
Did you stick to your plan?
Not really!
How did you handle the market volatility?
I guess we just relied on our gut feeling and got rid of shares that kept declining.
What was the biggest lesson you have learnt?
You win some and you lose some.
10 active players or fewer
ANDO from VIC
What was your motivation to create a league?
To have fun with friends.
How many hours a day did you spend on the game – including research etc?
About a half to one hour a day on research and trading.
How did you choose your companies?
For some, based on how we thought COVID-19 would affect the market. We bought others in the dips, hoping for a significant rise.
What was your strategy/plan?
Buy in the dips and hold companies no matter what until they make a profit. If we thought we’d found a company worth buying, we told the others.
Did you stick to your plan?
Yes, we weren’t tempted to deviate from it because it was working well.
How did you handle the market volatility?
It was a surprise how volatile the market could actually be, but we mostly stuck to lower-risk investments.
What was the biggest lesson you have learnt?
How the stock market really works and how to properly use it.
Buyback notice
On 1 June Asaleo Care (AHY) shareholders voted in favour of a Scheme of Arrangement under which Essity Holding Company Australia will acquire all ordinary shares in Asaleo Care. As a result we will buy back all holdings in AHY at its closing price on Monday 7 June. Any players holding these share will have cash returned to their accounts on 8 June
Here’s how the ASX Sharemarket Game leader board looked on Sunday 30 May:
| Position | Player Name | Portfolio Value as at 30/05/2021 |
| 1. | BUY GME AND SILVER - NSW | $75,102.64 |
| 2. | To The Moon - NSW | $68,879.32 |
| 3. | Pilar - QLD | $68,752.14 |
| 4. | Mae Trix - NSW | $68,647.33 |
| 5. | Mark Atmeltdown - NSW | $68,065.46 |
BUY GME AND SILVER from New South Wales has pulled away from the pack thanks to the impressive performance of lithium stocks Galaxy Resources (GXY), Pilbara Minerals (PLS) and Orocobre (ORE) – all of which had a strong day on 27 May. According to a recent report in The Motley Fool, the gains have been propelled by increases in lithium spot prices as well as tight supply combined with high demand in US, Chinese and European markets.
Sitting pretty?
With less than three weeks remaining in the competition, BUY GME has opened up a sizeable lead on the rest of the field – equating to more than $6,000 at the time of writing. With an advantage of that size, it might be tempting for BUY GME to switch to cash, wait out the remainder of game and hope the likes of To The Moon, Pilar and Mae Trix don’t catch up. In the 12 weeks already elapsed, the top 5 players have added about $1,500 per week to their portfolios.
So with less than three weeks to go, a $6,000 buffer might seem like enough for BUY GME to ‘hold tight’ in cash (or perhaps a more defensive portfolio of stocks). Furthermore, that could protect them from a sharp sharemarket correction in the final weeks of the game.
Lessons from past games
BUY GME would be well advised to spend some time looking at the results of Sharemarket Game national winners between 2010-2020. As you can see from the Hall of fame, this time last year Golden Trader was on track to amass an incredible $150,669! Admittedly, that result is something of an outlier (along with Becky’s amazing result of $167,988 in 2014). Still, the average winning portfolio for the past 10 years was $76,534 – slightly above where BUY GME was sitting at 30 May.
It remains to be seen if BUY GME is the type to rest on their laurels – somehow, we doubt it! We’ll be watching with interest as the final three weeks of the Sharemarket game play out.
The race to the finish
To The Moon and Pilar are also betting heavily on lithium miners Galaxy Resources and Orocobre – but they might need to change things up if they want to overtake the current leader. The most improved player for the week ending Friday 28 May was Oblivion, who saw their portfolio shoot up an impressive 11.7% during the week to $49,726.60. Stay tuned to find out who takes out top honours, and don’t forget to register for Game 2.
Further reading
May 2021: Protecting your capital and managing risk
Risk is part of investing – but there are smart ways to manage it.
As we move into the homeward stretch of the Sharemarket Game, it can be tempting to take some risks to boost your portfolio. Investing in a volatile stock may provide the last-minute returns you’re looking for – or it could permanently set you back.
Some risk is inevitable in investing. But you should avoid throwing caution to the wind in real life – as your investment outcomes can have serious impacts on you financially.
Your tolerance for risk
So how much risk is OK?
It depends on your income, your age and investment timeframe – as well as the reason you’re investing in the first place.
You should also consider your personal comfort with risk. Can you ride out waves of volatility with relative ease, or do you toss and turn at night? Work out your tolerance for risk – and respect it.
Types of risk
In investing, today's outperformer could be tomorrow’s loser. Social or political events, a natural disaster, rising or falling interest rates, unfavourable exchange rates, industry disruption or changes to commodity prices: all of these factors can impact a company’s share price – as can unfavourable media attention, supply and demand issues or governance problems.
As an investor, you may also be impacted by concentration risk – where you’ve focused too heavily on a small number of companies or sectors. And timing risk comes into play if you need to sell your investment earlier than planned – or you may not be able to sell them at all.
So what can you do to mitigate risk?
Protect your capital
It’s vital to protect your capital – your initial investment. (In the Sharemarket Game, your capital is the $50,000 that you started with.) If you don’t, you could lose all your hard-earned money – and also, without those funds, you could also miss out on the chance to build more wealth.
In real life, if you have a long investment timeframe (five years or more), you can take a few more chances, since you have time to rebuild your capital if there’s a market downturn or you make an unsuccessful investment. But in the Sharemarket Game, you won’t have the time to rebuild if you do suffer major losses.
Diversify your investments
Diversification – spreading your money across companies, sectors, markets and asset classes – is a key way to preserve your capital and protect any returns you make. That’s because if some of your investments perform poorly, others are likely to do well – or at least won’t be so seriously impacted.
For example, if you were invested in travel or tourism stocks at the beginning of the pandemic, your portfolio would have suffered a loss. But you may have been able to compensate for this if you’d also invested in a sector or stocks that outperformed at that time, like videoconferencing companies or certain healthcare stocks.
In real life, you can also diversify your portfolio by investing in other assets too. This could include cash, fixed interest investments like bonds, commodities, foreign currencies or real estate investment stocks (REITs). Many of these investments aren’t correlated with shares. In other words, they’re not tied to the ups and downs of the market.
Game Tip: Diversify with ETFs
Remember that for the first time, the Sharemarket Game also offers Exchange Traded Funds (ETFs), which allow you to invest in hundreds of different shares with just one trade. Many ETFs also include fixed income, commodities, precious metals and foreign currencies.
Get defensive
If taking big risks isn’t your thing, consider including more defensive stocks: companies with products or services that are in demand, no matter what’s happening in the economy. Gas and electricity providers, telecommunications, or large supermarkets are all examples of defensive stock.
As well as providing consistent returns, these companies generally pay dividends – which you can always reinvest if you want to grow your wealth.
Consider your timeframe
To win the Sharemarket Game, you may need to invest more aggressively in a short timeframe than you should you in real life. Outside of the game, if you are investing for growth, it’s wise to do it over a longer timeframe – five years or more.
Consider your timeframe
To win the Sharemarket Game, you may need to invest more aggressively in a short timeframe than you should you in real life. Outside of the game, if you are investing for growth, it’s wise to do it over a longer timeframe – five years or more.
In the Game, use the falling sell tool
Sometimes, you might want to sell a stock if it falls below a certain price. But in the sharemarket, things in change quickly – and a share’s price could fall dramatically within a very short period. And even the keenest of traders can’t monitor the market 24/7.
One way to limit losses or protect any gains you’ve made is by using our falling sell tool. It lets you set a sale price for a stock in advance that’s below the current market price.
Here’s how it works. You set two prices:
- the trigger price, the higher of the two prices – which, when reached, will place your sell order into the market.
- the limit price – which is the lowest price you wish to sell your stock at.
Game Tip: Using the falling sell tool
To use the falling sell tool, select Place an order from the Game play dropdown menu. Under the Order to heading click on the circle next to Sell. Enter the Order details. Then under the Order type heading, click on the circle next to Falling sell. You can then enter the Trigger price and Limit price of your choice. Once you’ve previewed your order, press the submit button.
Further reading
Important information
Information provided is for educational purposes and does not constitute financial product advice.
You should obtain independent advice from an Australian financial services licensee before making any financial decisions. ASX Limited ABN 98 008 624 691 and its related bodies corporate (“ASX”) does not give any warranty or representation as to the accuracy, reliability or completeness of the information.
To the extent permitted by law, ASX and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from anyone acting or refraining to act in reliance on this information.
© Copyright 2020 ASX Operations Pty Limited ABN 42 004 523 782. All rights reserved 2020.
Here’s how the ASX Sharemarket Game leader board looked at the close of trade on Monday 3 May:
| Position | Player Name | Portfolio Value as at 03/05/2021 |
| 1. | Pilar - QLD | $69,684.43 |
| 2. | To The Moon - NSW | $69,470.66 |
| 3. | BUY GME AND SILVER - NSW | $69,447.94 |
| 4. | Mark Atmeltdown - NSW | $69,398.94 |
| 5. | Mae Trix - NSW | $69,020.40 |
Interestingly, while the top two competitors adopted very different trading strategies, they both had very similar stock holdings and returns during April – heavily favouring the materials sector.
Less is more tops the table
Pilar showed that sometimes less can be more when it comes to playing the Sharemarket Game, making just one trade during the month of April. Pilar has a portfolio predominantly focused on materials stocks and appears to be adopting a ‘buy and hold’ approach – with zero sells recorded during April.
Pilar also increased their portfolio holdings across the board in materials stocks Pilbara Minerals (PLS), Orocobre (ORE) and Galaxy Resources (GXY), along with software and services company EML Payments (EML).
‘Buy and hold’ is a passive investment strategy in which an investor buys stocks and holds them for a long period – regardless of market fluctuations. It remains to be seen if this will be effective in the relatively short timeframe of the Sharemarket Game.
But there are advantages to taking a longer-term approach. Investors may be less pressured into making badly timed decisions to try beat the market. And, from a cost perspective, less transactions means lower commission and fees – which can make a huge difference to long-term investment returns.
Activity delivers results
Last week’s leader To The Moon has now slipped to second place. They took a contrasting approach to Pilar in April, trading actively throughout the month while also favouring a materials sector investment theme.
Specifically, and in contrast with Pilar, To The Moon chose to hold the materials stock Champion Iron (CIA) versus Pilar’s selection of EML Payments, a software and services stock, generating approximately $1,000 less profit in April and thereby helping relegate them to second place on the leader board.
In terms of trading activity, To The Moon focused on the materials sector, buying shares in Pilbara Minerals (PLS), Galaxy Resources (GXY) and Champion Iron (CIA), and selling out of their stock positions in Oz Minerals (OZL) and Capricorn Metals (CMM) in April.
Trading more frequently may allow investors to take advantage of volatility and short-term market gains, but it can be more risky by leading to overexposure in a particular position or sector. When an active investor is correct in their analysis, this type of concentrated trading can lead to huge profits. However, the flipside of this concentration risk is that if the active investor’s analysis proves incorrect, it can also lead to big losses.
Most improved player
Indrani grabs an honourable mention, emerging as April’s most improved player with very strong performance (albeit from a lower starting point). However, by month end Indrani held only one stock position, CSR, after cashing out of the rest of their portfolio – potentially severely limiting their competitiveness versus other Sharemarket Game players in the future.
Important information
Information provided is for educational purposes and does not constitute financial product advice.
You should obtain independent advice from an Australian financial services licensee before making any financial decisions. ASX Limited ABN 98 008 624 691 and its related bodies corporate (“ASX”) does not give any warranty or representation as to the accuracy, reliability or completeness of the information.
To the extent permitted by law, ASX and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from anyone acting or refraining to act in reliance on this information.
© Copyright 2020 ASX Operations Pty Limited ABN 42 004 523 782. All rights reserved 2020.
Key trends moving markets in 2021
As we all know, the sharemarket is driven by supply and demand – which is often driven by global events. So as an investor, it pays to keep on top of what’s happening around the world.
So what trends could influence the market in 2021?
In the past year, governments and central banks have cut interest rates to combat the economic impact of COVID-19. This is making it cheaper for companies to borrow money and to purchase new assets, potentially fuelling their growth.
As vaccines are rolled out across the world, there’s hope that the pandemic will end. This could bring renewed optimism across markets.
Another trend to watch is the continued digitisation of workplaces, which could buoy technology shares. And keep an eye on energy and materials stocks as the world transitions away from fossil fuels towards renewable energy.
Getting technical: price trends
Another way to analyse markets is to examine a share’s price history through a chart. Charts give you a quick visual picture of a share’s performance over the recent past. And while past performance isn’t a guarantee of future performance, it can help give you an idea of potential price trends.
Technical analysts use charts to identify:
- an uptrend: when the price of stocks are rising, and
- a downtrend: when prices are falling.
Some investors will only buy a stock if it’s in an uptrend. So how do you know? Check the pattern of rise and falls of the stock price. If each subsequent rise and fall is higher than the previous rise and fall, it’s in an uptrend.
Trading sideways
But what about when there’s no discernible highs and lows? This is known as ‘trading sideways’. In this case, prices are likely to continue in the same direction as they were before.
Resistance and support lines
Another way that technical analysts try to work out when to buy or sell a particular stock is by creating resistance and support lines.
To create a resistance line, technical analysts draw a line that connects all of the highs of a stock’s price. This indicates where the market is resisting going higher – at the price where sellers enter the market to sell more shares.
If a price breaks through this resistance, it may mean that sellers have decided not to sell any more of the stock at this price – perhaps due to good news about the stock. For technical analysts see this as a signal to buy. (Figure 1)
Similarly, a support line connects all the lows, and shows where the price is supported from going lower by the presence of buyers. If the line goes lower than this point, it may indicate that there are no longer any buyers at this price. (Figure 2)
Game Tip
To keep track of the companies you’re interested in, you can create your own watchlist. From your dashboard, click on Game play in the blue row on top of the page, then choose Company list from the drop down menu. To add companies to your watchlist, use the + symbol on the company list page.
To view your watchlist, click on watchlist from the Game play dropdown menu. To remove a company from your watchlist, click on the orange button next to the company name on your watchlist.
Figure 1: Creating a resistance line
Figure 2: Creating a support line
Moving averages
A third strategy employed by technical analysts is by using moving averages: a series of averages of a stock price, which constantly updates.
Technical analysts will often compare two different periods of moving averages – say, 10 days and 20 days. The point that the upwardly moving, shorter-term average crosses the longer-term average is the signal of when it might be time to buy. When the opposite happens, it may be the best time to sell.
Game Tip
To use the charting tool in the Sharemarket Game, go to your dashboard and click Charts from the Game play dropdown menu. You can also bring up a price history chart for a company you’re interested in by going to Company list from the Game Play dropdown menu, searching for the company then clicking on its name.
Using moving averages: Computershare Limited (CPU)
Further reading
- Blackrock, 2021 global outlook: A new investment order
- ASX, Analysis tools, ASX
- Cory Mitchell, How to Use a Moving Average to Buy Stocks, Investopedia
Here’s how the ASX Sharemarket Game leader board stacked up as at 29 March:
| Position | Player Name | Portfolio Value as at 29/03/2021 |
| 1. | Limitless – NZ | $60,237.47 |
| 2. | Sandals Prodigy – NSW | $59,026.44 |
| 3. | Vinkys – QLD | $57,698.58 |
| 4. | KL – NSW | $57,550.79 |
| 5. | Kingbaker – NSW | $57,536.09 |
Another noteworthy performance comes from Here We Go, our most improved player for the week. Their portfolio rose by an impressive 6.75% from the previous week to $51,691.37.
Let’s have a closer look at what both players are doing – and what lessons you could learn from their strategies.
It can pay to be active
Our leading player, Limitless, has been a very active trader. They’ve bought a range of stocks across different sectors, making a relatively large volume of trades in a short period of time. This has allowed them to capitalise on short-term market movements.
The Sharemarket Game has a short timeframe of just 15 weeks. So taking advantage of volatility and short-term gains can be a winning strategy.
Currently, Limitless is holding 6 stocks, with 3 of them in the resources and mining sector. Our most improved player, Here We Go, has also avoided spreading themselves too thinly, holding just 5 stocks right now. Two of Here We Go’s 5 stocks are in travel, while the other 3 are in resources and healthcare.
Undervalued stocks are potential gems
What’s interesting is that both players have invested in stocks that may be undervalued. In other words, the stock’s current price may not reflect the company’s underlying value.
Both Limitless and Here We Go have invested in gold stocks, which were flying high in 2020. However, gold may be facing some competition from bitcoin, which is becoming accepted by institutional investors as a safe haven ‘asset’ during times of turbulence.[1] Here We Go has also invested in regenerative medicine company, Mesoblast, which has had a volatile trading history in the last few months of 2020 and may currently be undervalued.1
Finding the value
Actively looking for and purchasing stocks that the market appears to be underestimating is known as value investing. Typically, value investors look for companies with strong fundamentals, but whose stock may be undervalued at present – perhaps due to some negative headlines, or because they’re in an underperforming sector.
To assess a company’s fundamentals, value investors analyse the company’s financial information, including:
- the company’s revenue
- how much profit it is generating
- its return on assets
- how healthy its cash flow is
- how its capital is managed
- its future growth.
Industry concentration
Both Limitless and Here We Go have chosen to concentrate on specific sectors: resources and mining, and travel, respectively. Anyone who’s read anything about investing will have heard diversification touted as a good strategy for managing risk. It’s true that concentrating on a small number of sectors may be a riskier strategy – but it also means you could increase your returns.
For example, you may decide to overweight your portfolio in telemedicine because you believe even after COVID-19 this be a growth area in the healthcare sector. If your view is correct, you could enjoy more returns than if you had diversified over a range of sectors.
Remember, the Sharemarket Game has a short timeframe. So it’s likely you’ll need to take more risks to win. In real life, you’re more likely to take a long-term approach – with a greater focus on managing your risk.
[1] Chanticleer, ‘The 'undervalued' stocks to watch in 2021’ AFR, 5 January 2021.
Further reading
- Adam Hayes, Value Investing, Investopedia
- J.B. Maverick, Concentrated vs. Diversified Portfolios, Investopedia
- Khadija Khartit, Undervalued, Investopedia
Important information
Information provided is for educational purposes and does not constitute financial product advice.
You should obtain independent advice from an Australian financial services licensee before making any financial decisions. ASX Limited ABN 98 008 624 691 and its related bodies corporate (“ASX”) does not give any warranty or representation as to the accuracy, reliability or completeness of the information.
To the extent permitted by law, ASX and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from anyone acting or refraining to act in reliance on this information.
© Copyright 2020 ASX Operations Pty Limited ABN 42 004 523 782. All rights reserved 2020.
Last week we helped you get set up for success in the game. This week, we’re going to talk about a new addition to the Sharemarket Game – Exchange Traded Funds (ETFs).
How ETFs work
Wouldn’t it be great if you could get exposure to a huge range of companies – in just one trade? That’s what ETFs allow you to do.
ETFs have been available in Australia since 2001 – and over the past decade they’ve really taken off. In some ways, they’re similar to managed funds. Your money is pooled with other investors, and the actual underlying shares or assets are owned by the ETF provider. But unlike a managed fund, you can trade them on the ASX – just as you would with shares.
ETFs in Australia are typically passively managed. This means the fund manager tracks the performance of an index like the ASX200, or a commodity like gold or oil, rather than actively choosing the shares themselves.
Get more exposure, for less
So why would you use ETFs in the Sharemarket Game?
ETFs allow you to invest in hundreds of companies in just one trade. This makes it much cheaper to gain exposure to a range of companies. And it means you can track a range of indexes and gain exposure to various themes or sectors that could give you more growth – which is what you need to win the game.
For example, if you believe sustainability is a high growth area you could invest in an ETF that tracks a sustainability index. Or if you think a particular sector like technology or healthcare is on the move, you could track a sector index.
Investing in ETFs can also help you save time and effort researching and choosing shares.
Game Tip
To find the list of ETFs available in the Sharemarket Game, go to your dashboard, click on Game play in the blue row on top of the page, then choose Company list from the drop down menu. Click the Search icon and type in ETF. This will bring up all the ETFs in the game.
Choosing your shares
Of course, before you buy any ETFs or shares, you need to be clear about what your investment goals are. Then you should choose the right mix of shares that help you achieve them.
Let’s look at a real-life example. Say you were approaching retirement and wanted to create a stable income. You’d be more likely to add more defensive stocks in your portfolio.
Also known as non-cyclical stocks, defensive stocks aren’t usually affected by changes in the business cycle. Sectors like consumer staples (think Woolworths, Coles and Coca-Cola Amatil) and utilities (such as AGL Energy or Spark Infrastructure) fall into the defensive category.
Cyclical stocks like airlines, hotel chains, car manufacturers and luxury goods manufacturers tend to be riskier as they’re more affected by changes to the economy. They often provide higher returns when the economy is doing well – but they can suffer during times of recession.
In the Sharemarket Game, the objective is to build your wealth in a short time-frame. So you’re more likely to have more riskier, volatile stocks in your portfolio than if you were investing over the long term.
Large, mid or small caps?
In the real world, a lot of Australians like to invest in large-cap stocks – mature companies with the biggest market capitalisation that make up the S&P/ASX 50. Large-caps include the big four banks, large energy companies like BHP, and supermarket giants Woolworths and Coles. They’re popular because they’re thought to be a surer thing – especially over the long term.
Interestingly, over the decade to January 2020, mid-caps, the next 50 companies that sit in the S&P/ASX 100, delivered the highest returns with the lowest volatility.
In the Sharemarket Game, you’re focusing on short-term gains. So it might pay to include some of the more riskier small-caps that sit outside the S&P/ASX, which offer the most opportunity for growth.
Further reading
- The Ideas Exchange podcast - Leaps and bounds: The rise of ETFs
- Moneysmart, Exchange traded funds (ETFs), ASIC
- James Chen, Exchange Traded Fund (ETF), Investopedia
- Troy Segal, Small Cap Investing: An Introduction, Investopedia
- Robert C Kelly, Cyclical vs. Non-Cyclical Stocks: What's the Difference? Investopedia
It was a close race between the finalists of the national prize, with just a few 100 dollars between the three top players’ portfolios. First place was taken by the first-time player, Stock95 from Victoria with a final portfolio value of $79,713.
Coming in at a close second with a portfolio value of $79,391 is Nabin Sapkota of New South Wales.
And in the third place, Pat Campbell from Queensland, who was in the first place right up to the day before the end of the game, coming in with a portfolio value of $79,219.
League winners
The top league in the category “11 players and up” was won by Stock Heads – a group of 11 players with a total average portfolio value of $75,221.
The league, Stockerino, has taken top honours in the category of players with fewer than 10 players. With just 2 players in this league, they achieved an average portfolio value of $75,221.
Special mention
A special mention goes to the league – Smashing Champions – topping the overall average portfolio value for all leagues with an average portfolio value of $77,480*.
The two Victorian brothers had also played in the schools game but wanted to challenge themselves and joined the public game. Congratulations to Jay and Charlie!
*Note: both players in the league are under 18, and not eligible for a prize under the Game rules.
Market summary for Game 2
During the game period:
- The S&P/ASX200 was by up 9.7%
- The two best performing sectors were Information Technology (code: XIJ) up 20.6%, and Real Estate (code: XRE) up 17.0%
- The two worst performing sectors were – Utilities (code: XUJ) down 6.5% and Consumer Staples (code: XSJ) down 6.4%
- The Top two performing stocks were – Ooh!Media Limited (code: OML) up 109.8% and Corporate Travel Management Limited (code: ) up 95.6%
- The two worst-performing stocks were - OceanaGold (code: OGC) down 49.3% and Resolute Mining Limited (code: RSM) down 37.4%
National first place winner – Cam from Victoria
How many hours a day did you spend on the game – including research etc.?
I spent about 20 minutes in total over the first three months, and then spent a couple minutes a day in the last week or two checking updates and making a couple trades.
My research would be around 1 minute on the stocks I would buy, some of them I couldn't tell you what the name of the company was simply the index code.
How did you select your companies?
I'd like to say I used some sort of "chart analysis", but there is quite a bit of luck involved in the sharemarket, I made some shocking trades along the way.
What was your strategy/plan?
My simple methodology was to select companies that had been affected by the economic impact of the coronavirus and that were sitting in a trough, but were also still solid companies and had been mostly sold out of panic by others rather than for loss of revenue.
Did you stick to your plan? If yes, were you tempted to deviate from your plan? If not, why did you change?
My plan was to mostly let my stocks do their thing, the only time things changed was in the last couple of days where I made some regrettable day trades.
How did you handle the market volatility?
I simply backed that over time the stocks I had selected would increase in long term value, instead of looking at short term sells (probably the same answer as most winners). Never buy or sell on emotion.
First runner-up – Nabin from New South Wales
Have you plated the Game before?
Yes, once before.
How many hours a day did you spend on the game – including research etc.?
1 – 2 hours a week.
How did you select your companies?
Research and selected undervalued companies.
What was your strategy/plan?
Buy low, sell high.
What was the biggest lesson you have learnt?
Buy and hold is best for a huge gain.
Second runner-up – Patrick from Queensland
Have you played the Game before?
Yes, for approximately 4-5 years
How many hours a day did you spend on the game – including research etc.?
Very little, it was a set and forget for me, maybe checking a few times a week. I became more involved closer to the end.
What was your strategy/plan?
I chose good companies that were well undervalued because of COVID. I bought very COVID- affected shares and hoped for a vaccine to be announced before the game had ended.
Did you stick to your plan? If yes, were you tempted to deviate from your plan? If not, why did you change?
Yes, I stuck to my plan right up until the final day, when I made a trade that cost me the win.
What was the biggest lesson you have learnt?
Not to panic-sell.
League winner – More than 10 players
Stockheads from Victoria
Why did you decide to create a league?
We created the league as a bunch of friends that wanted to compete with each other and have a little banter and fun along the way. We are all interested in the stock market and this was a good opportunity to have a try whilst learning.
Did you find that it helped you when playing together as a team?
The game definitely did help. Many of us had different strategies and different stocks that we all chose based on the current uncertain economic conditions. Suffice to say, some did very well whilst some straggled a little. But overall we learnt to look for economic indicators in the news and tried to predict how the market would react accordingly.
Anything you’d suggest for future players?
Follow the news and stay up to date. Devise a trading strategy that works for you. Don't try to jump into stocks that are on the top 5 gainer board for the day.
League winner – 10 players and fewer
Stockorinos from Victoria
Why did you decide to create a league?
Our motivation in creating the league arose from both John and I having highly ranked portfolios and realising that we would have one of the highest leagues if we created one. We both were in a big league with our friends and decided to create one just us two considering we were both having successful performances. We create leagues every year for us to compare our performances as a bit of fun.
Did you find that it helped you when together as a team?
Creating the league helped us both, in terms of we were able to discuss some of our final portfolio moves and therefore have a bit more assurance before making a decision. Creating a league helped us give each other advice and just generally discuss certain stocks' performance.
Anything you’d suggest for future players?
Read and research the stocks that look promising and then trust them, no need to sell too quickly you brought them for a reason. Sometimes you just have to buy volatile stocks as the game doesn't run forever, avoid purchasing low moving stocks. Reading companies’ reports and financial statements can be very helpful, as well as looking at their graphs prior to the game.
