As part of their Personal Finance elective class, Yr 9 students, Liam Sannell and Liam O'Keefe, recently competed in the ASX Schools Sharemarket Game competition. The boys ended up placing 5th in the country and 1st in the state!

Their strategy?

The main goal when investing in the ASX share market game was to protect the money invested against fluctuations caused by COVID-19 conditions. This strategy provided a simple ‘blueprint’ for selecting shares. An aversion to buying BIG mining companies specialising in iron ore extraction was the focus, as the syndicate felt that the capital growth the big miners had experienced in 2021 was more than likely to go down rather than continue to rise over the course of the game.

The companies that provided the greatest capital gain were A2 Milk, Reliance Worldwide Corporation and Beach Energy Limited. The first two companies listed were identified as benefiting from COVID conditions. First of all, A2 milk produces powdered milk and baby formula, and it was felt that as the world was ‘stockpiling’ and ‘panic-buying' milk products and thus there was a real chance that these company’s shares would be in high demand. Reliance Worldwide Corporation specialises in high-quality plumbing and heating products, and it was felt that, due to COVID lockdowns and a rise in home maintenance and improvements, that the demand for their products would rise - thereby increasing the company’s overall profit levels and demand for their shares.

Finally, it must be said that the syndicate decided that they would not ride their luck and bank on share prices continuing to rise over extended periods. This ‘mindset’ saw the syndicate sell at the top of a price spike on two occasions for companies that had had share prices rise sharply. All the above being said there was a real element of good luck and timing as on more than one occasion the syndicate sold shares hours before a large price drop.