For a guy who used to write a lot about money, I never really got all that into playing the stock market. The closest I got until recently was Raiz (previously Acorns), but that in itself is a very hands-off approach to investing, seeing as all you do is put the money in and let someone else move it around for you.
A couple of weeks ago, I was invited to participate in a stock trading game using the now released app, Stake, which lets Aussie investors play the US stock market with relatively small amounts of money. Pitted against a group of fellow journalists, we were all given $US370 ($500) with the goal of making as much money as possible through our investments.
In my case, things didn’t turn out so great, so what I’m really trying to say is I lost someone else’s money on the US stock market. I mean, it wasn’t a grievous amount or anything, it was like $US35 ($47), but still, it was enough to put me at the bottom of the leaderboard.
I tried hard to pick stocks I thought were strong performers or that had recently made big announcements. For example, I whacked a good share of cash on Facebook shortly after IGTV was announced hoping for a decent gain, but it was a little topsy-turvy. I analysed graphs and I read the news, but deep down, I was really just winging it.
I spoke with Stake’s Matt Leibowitz to try and gain some insight into how I fucked up so badly.
“Sometimes in the market, you catch a bad break,” he told PEDESTRIAN.TV via email. “You bought iQIYI (China’s Netflix) and its price got hurt on some bad local news. That’s the nature of being in the market and everything is a good thing because you get to learn something and no one can take that away from you.”
“The game was about getting into the market and getting started, you achieved that and probably learned heaps from just giving it a shot.”
He was right, I learnt a helluva lot in a relatively short amount of time, but there’s always more ways to get ahead. Like anything, it’s all about practice.
“This is the first two weeks of your investing career and losses are lessons,” he said. “Stick at it, read, speak to people, and dedicate time to it. Like anything, nothing is easy at the beginning but you’re taking hold of your financial future and learning how to make your money work in the market.”
While Stake certainly is the ideal place for beginners to learn the ins and outs of the market through actually making trades, there’s plenty there for the well-versed, too.
“The US is the largest and most dynamic share market in the world, with more opportunity than anywhere else,” Leibowitz said. “We’re also a great place for people looking to trade for the same time because you’re not paying a bomb in brokerage. You can learn, make some mistakes, and will be better off in the long run.”
“It doesn’t matter if you’re a seasoned pro or first time trader – having access to more opportunity is a good thing.”
Rather than charging brokerage fees to users, Stake makes money through the transfer of funds into your US wallet, which it shares with its provider, OFX. It also keeps any interest accrued in the USD trading accounts, “the same way a bank collects interest on cash deposits”.
So if you’re looking to dip your toes into the US share market, Stake is the cheapest and easiest way to go about it, folks. You can grab the app for free on iOS now and Android devices via the Google Play store very soon. If you take anything from my story, it’s that you should never wing it, particularly when money’s involved.Image: The Wolf of Wall Street