The ASX will give you $50,000 of play money to learn about the share market.
If you owned shares last year, you’re likely to have made a killing, at least on paper. If you don’t have an equities portfolio, you may be wondering how to get a bit of the action.
Luckily for you, our stock market operator, the Australian Securities Exchange (ASX), can teach you just about everything you need to know about share trading, and it’s free.
Stock markets around the world last year recorded strong growth, increasing their total worth by more than $11 trillion. ASX stocks also did nicely, growing by 11 per cent in value, which is great news for your superannuation fund.
So far this year, international shares are continuing to rally strongly, and while Aussie stocks haven’t matched that vigour yet, some pundits believe they will deliver another bullish year.
But not all company shares will perform well. If you are a novice trader, picking the winners using research from financial analysts may not give you the full picture. Some stockbroking houses will display a bias towards their favourite companies. This can happen when a broker underwrites the sale of a large tranche of shares.
To encourage as many investors to buy the new shares, known as scrip, stockbroking houses may issue positive guidance about the future performance of the company without providing enough information about potential risks. Therefore, it is very important to get your advice from independent sources.
A great way to get a feel for playing the market is to do it with virtual money via the ASX Game. This online training course is free but you have to be quick to join in. Registrations open tomorrow (1 February) and the next game starts on 22 February 2018, running through to 6 June. A number of games are held throughout the year, but once they commence they are closed to new players.
During the game, you create a share portfolio of the stocks you wish to ‘trade’ in using a virtual $50,000. You are taught how to ‘buy and sell shares’ from around 200 of the largest listed Australian companies to test your strategies. If you are diligent, you will be able to understand how to evaluate the different types of research that brokers use.
There is plenty of guidance on the site from some of the best investor/analyst minds, including a link to Marcus Padley’s tutorial for beginners.
As a bonus – to keep you regularly doing your research so that your portfolio makes gains – there is prize money involved. The player who grows the value of their portfolio the most during the 15-week game wins $2000. There are also prizes for second and third-placed participants.
During the past two years, players from Queensland and New South Wales have dominated the winners’ stakes, with one person increasing the value of their portfolio by 50 per cent to $77,000.
There is no limit to the number of games you play and it goes without saying that the more you practise, the more likely it is that you will succeed when you go on to invest your own cash in shares.
The ASX says: “Don't put pressure on yourself first time around, as this is a learning process and as you develop your knowledge, the strategy or plan you want to use will become clearer and next game you can expand and test what you have learnt.”
As always, however, consult your financial adviser before buying shares to ensure that your investment decision best suits your personal circumstances.