What top traders bought
Learn about wining strategies in the ASX Sharemarket Game and register for the upcoming Game.
How did the top Game 2 2015 players do it?
It was a close finish with only $286 between 1st and 2nd place. We asked the top 3 players about their Game plan. They used a variety of strategies, so read on to discover what they did. Please remember, the strategies that the winners employed are not necessarily the same strategies they or you should employ when it comes to investing real money.
National 1st Going4gold - Daniel from Queensland. Portfolio value: $66,901
Daniel bought and sold multiple times, investing across most sectors with a focus on materials and consumer discretionary. He reinvested in some of the same stocks including EVN, Evolution Mining, NCM, Newcrest Mining, NST, Northern Star, OGC, Oceanagold and RRL, Regis Resources. Here are some questions we asked Daniel about his Game strategy:
1. Have you played the Game before? This is the first time I have played the Game and entered at the last minute after talking to a commodity trader friend who suggested that the price of gold could go for a run during the first half of the Game and help any gold stocks move a lot higher.
2. How many hours a day did you spend on the Game? My time spent on the Game daily varied depending on how busy the day was. Most days at least 15 minutes even if just checking on the gold price, my stocks price, portfolio total and looking at charts for some potential trades. Too much time spent on the Game site led to doing some silly spur of the moment trades which ended up losing.
3. How did you choose your companies? As a novice trader I only know about basic things like support, resistance and trend lines so I was searching for stocks about to break out of a down trend line or above resistance. Apart from the gold stock trades, the other big profits were made by entering a stock just before or after a trend line and resistance break. When G8 Education finally broke out of the long down trend it had been in for some time it moved up and boosted my profit towards the end of the Game.
4. What, if any, charting Software did you use? The tools I used during the Game were the ASX website tools for basic charts and the Game watchlist of stocks I liked. About half way through the Game I was sent a link to trading mentor Justine Pollard’s 10 basic charting lessons which I found very informative.
5. When the market fell significantly were you tempted to deviate from your plan? Reading the papers financial section and the news saying the market was heading down did not really worry me too much as the portfolio of gold stocks just kept slowly going up in a nice uptrend. When the price of gold and my gold stocks started falling was when I got worried.
6. What was the biggest lesson you have learnt? The biggest lessons I learned was that holding only a few winning stocks can make big profits and to keep any losing trades small and stick to your plan.
7. Is there anything else you think would help other players? The end outcome of the entire Game was steep learning curve & best not panic, stay calm like Fonzy and also have fun trading the Game.
National 2nd gordongow – Gordon from Queensland. Portfolio Value: $66,615
Gordon used a buy and hold strategy. Purchasing stocks on the first day of the Game and holding them for the entire Game. The stocks he purchased were RMD – Resmed, TRS – The Reject Shop, UGL and BOQ – Bank of Queensland. Here are some questions we asked Gordon about his Game strategy.
1. Have you played the Game before? I have always been interested in the sharemarket and have played the Game approximately 4 times before.
2. How many hours a day did you spend on the Game? I spent about 1 hour a day reading newspapers, watching financial gurus on TV and using the ASX website for research.
3. How did you choose your companies? I basically chose 4 good quality stocks in 4 categories and held them during their ups and downs in a volatile market and it paid off. I chose Bank of Queensland, BOQ, in the financial category, mainly because it was a small player and I thought it had an upside. Resmed, RMD was chosen in the health category as medical appliances are a growth industry in Australia. I wanted a retailer but decided against the big companies, due to the fierce competition and went with a smaller discount store, The Reject Shop, which appears to be filling a niche in the market. I would have liked a resource stock but due to the downturn in the market, I decided to go with a support industry stock UGL, that can diversify if necessary, just a personal thing.
4. What was your strategy? Over a period of time, in theory only, I have used the stop/loss method, but in the long term have come to the conclusion that quality, well managed stocks will hold up in the long term. So I chose to buy and hold.
5. When the market fell significantly were you tempted to deviate from your plan? When the market had falls I was very tempted to sell BOQ but just as I had thought about it, who should bounce back but BOQ. I do hold a small amount of BOQ in our own portfolio. At near the top I was very tempted to sell BOQ but I didn't have a replacement stock in mind that I felt comfortable with.
6. What is the biggest lesson you have learnt? Just do your research, choose quality shares and I decided to hang in for the long term.
National 3rd Jasmine from Queensland. Portfolio value: $64,560
Jasmine also used a buy and hold strategy, purchasing most of her stocks on the 17th of August. The stocks she invested in included SUL, Super Retail, TRS, The Reject Shop, BOQ, Bank of Queensland, IPL, Incitec Pivot and DMP, Domino’s Pizza. Here are some questions we asked Jasmine about her Game strategy
1. Have you played the Game before? This is my second time playing the Game. The first time I played I didn't do very well at all.
2. How many hours a day did you spend on the Game? When the Game started I spent about an hour choosing the companies I wanted to buy shares in. I only checked the Game about two or three times a week because my plan this time was to just buy shares and not sell them again, so I really only had to check my portfolio to see how it was going and check my position on the leaderboard.
3. How did you choose your companies? I only chose the companies that I knew and liked. I bought just under the maximum amount of shares...and I only had five companies in my portfolio.
4. What was your strategy? I chose the buy and hold strategy because the first time I played the Game, I kept buying and selling my shares and that plan didn't work out for me. So this time I just decided to buy some shares and keep them for the whole Game.
5. When the market fell significantly were you tempted to deviate from your plan? I wasn't tempted to sell my shares when the market fell because I knew it would come back up again and I didn't want to lose money by selling my shares while the market was down.
6. What is the biggest lesson you have learnt? The biggest lesson I learned from this Game was to be patient and to not spread myself too thin by investing in too many different companies.
About the author
Amanda Mior is the ASX Sharemarket Game Coordinator.
Amanda Mior is the ASX Sharemarket Game Coordinator.
Test your skills and join Game 1 2016 - registrations are open and trading kicks off 25 February.