$10,000 Winner
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With apologies to Charles Dickens, 2008 was the best of times and the worst of times for participants in ShareOwner’s Growth-Stock Challenge for university and college students.
But even with markets down by 33% in this singularly challenging environment, three Canadian university students managed to achieve investment returns professional money managers will envy. And in addition to the investment wisdom gained, they’ll receive cash prizes of $10,000, $5,000 and $1,000.
Yechi (Max) Zhang: 1st Place, $10,000 Prize
Challenge grand prize winner studies commerce at Queens University in Ottawa when he’s not weight-training or snowboarding. While he hasn’t yet decided what he’ll do after university, his success in both sales (he won sales awards working part time in high school) and investing bode well for a very bright future.
Zhang’s best performing stocks were Amgen, Genentech and Encana, companies that he researched using ShareOwner’s tools, the business school’s Bloomberg terminal and online sites like Google Finance.
Of the Challenge experience, Zhang says:
| “My learning curve was very steep initially, but after that, the investment management process wasn’t as much work as I thought it would be.” |
The emotional experience, on the other hand, was challenging.
| “When the market started crashing, I was very worried. I bought safe assets like gold, but even it did not perform as expected.” |
The lesson he offers to other students who wish to invest, “Be patient and do your homework.” |
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Isabelle Falardeau; 2nd Place, $5,000 Prize
Unlike many of the students participating in the Challenge, second prize winner Isabelle Falardeau is not studying finance or business. Her BA degree is in international studies and modern languages, and she is now in the Teacher’s College at the University of Ottawa.
Unfamiliar with the stock market, Falardeau saw the Challenge as providing great incentive for beginners to take their first investing steps.
| “The tools provided, especially the Stock Study Guide software, were very useful.” |
| On the current market environment, “I would say that one of the primary lessons I learned was: investing is a very risky business.” |
Based on her experience, her advice to friends and fellow students who wish to invest is:
| “Take your time and diversify. Don't rush into buying. Look at what's going on in order to make wise choices, and buy in different areas.” |
Yea-lun (Bruce) Lee: 3rd Place, $1,000 Prize
For Lee, the Challenge was an irresistible opportunity to try his hand at investing, something he’d always wanted to do. “For students, there aren’t many opportunities to invest affordably. As soon as I heard about the Challenge, I knew it was something I wanted to try.”
Lee, a University of British Columbia student studying finance and marketing, began the Challenge with the belief that it would be a free learning experience.
| "We were choosing from the biggest, best companies in the world. But when stocks started plummeting, I was really worried and concerned.” |
| Lee says that “It is too bad that more students didn’t know about the Challenge. It was a valuable experience with having my own money on the line.” |
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Reality-Based Stock Market Challenge
Courage & Commitment Win the Race
For the last two years ShareOwner Education Inc. and its affiliates have sponsored a one-of-a kind Challenge to encourage greater financial literacy about growth-stock investing.
The Challenge is unique because participants invest $1,000 of their own money in their choice of growth stocks and exchange-traded funds (ETFs). There’s no “play” or “phantom” money involved so participants are inspired to make only prudent investing decisions. A $20,000 prize pool provides rewards to the 21 top performing portfolios with prizes ranging from $10,000 to $100. As well, all contestants receive free access to ShareOwner’s educational materials throughout the Challenge.
Rules
A Challenge runs from the first trading day of the year to the last trading day of November (11 months). Competitors make their portfolio choices from 160 diversified growth stocks and exchange-traded funds that ShareOwner selects from North American markets.
Buying and selling is free via the dollar-based buying service of our trading affiliate Canadian ShareOwner Investments Inc. where accounts are covered under the Canadian Investor Protection Fund. To be eligible to win a prize, a contestant must have at least five securities in his/her portfolio at the Challenge’s end. Cash is not considered a security.
Flashback: The 2007 Challenge
The TSX Composite and the Dow Industrials rose 6% and 7%, respectively, during the Challenge. The 21 winners far outperformed the indexes with returns ranging from 32% to 123%.
The 2008 Challenge
This all-student (universities and colleges) Challenge gave 60 young investors (from 21 institutions) an unnerving introduction to stock market investing. In fact, by Challenge’s end, 19 contestants had made just a few or no purchases (i.e. less than 5) for their portfolio which disqualified them from winning a prize. That left the 41 eligible contestants to share 21 prizes.
Performance
By the Challenge’s end, the Composite and the Dow had both lost 33%.
Remarkably, 36 (88%) of the 41 eligible contestants did better than the indexes. (median loss, 13%).
Winners
Returns for winning portfolios (averaging 11 securities) ranged from -20% to +5% (-10% to 1,005% after prizes).
University and college students interested in the participating in the next Challenge can register for information online at www.ShareOwner.com. |
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