Schools
Sharemarket Game news
Read the latest news and updates for teachers and students participating in the Game.
Game 2, 2024
Finishes on 24 October.
2025 Game
Registrations will open on 13 February and Game will run for 10 weeks from 13 March to 22 May.
Resources
- Curriculum aligned, skill-based lessons
- Podcast series: Investing advice for my teenage self
- Getting started guide for teachers
- Quickstart lessons
| Position | Syndicate name | Portfolio Value as of 8/10/24 |
|---|---|---|
| First | Aaron - NSW | $67,211.00 |
| Second | JAKE Inc - NZ | $65,555.58 |
| Third | Zac - VIC | $65,484.72 |
September has a bad reputation when it comes to the stock market. It’s often the month that markets take a stumble – particularly in the US. Happily, that wasn’t the case this month, with the S&P 500 returning 2.1% to investors throughout the month. At home, the S&P/ASX 200 did even better, ending September up 3%. Australian stocks fared better than most developed markets, benefiting indirectly from a large Chinese stimulus package towards the end of the month. [1]
We have a completely new top three this month, with Aaron from Port Macquarie High School in NSW taking the lead. Aaron has managed to build an impressive portfolio of $67,211.00 in the first two months of the Sharemarket Game, adopting a buy-and-hold strategy that has paid off handsomely. He bought five stocks on 5 September, and at the time of writing every single one has gone up in value. The theme across his picks has been mining, with one lithium miner up an impressive 70%. It remains to be seen if Aaron will keep holding onto his winners, or whether he decides to sell some to lock in his gains.
In second place this month is the corporate-sounding JAKE Inc from King’s College, New Zealand, with a portfolio worth $65,555.58. JAKE Inc has been much more active than Aaron, logging more than 350 transactions throughout September. They have targeted various sectors over the month, including aviation, pharmaceuticals, consumer staples and mining. Like Aaron, JAKE Inc benefited from the increase in lithium stocks throughout September – but not to the extent of our leader!
Finishing in third place for September with $65,484.72 is Zac, from Irymple Secondary College in Victoria. Like Aaron and JAKE Inc, Zac has ridden one particular lithium miner to the top three in September. Other winners in his portfolio include a second lithium miner, two uranium miners and three gold miners. This resources play has worked well for Zac so far, but investors are usually cautious about putting all their eggs in one basket. If you have all of your portfolio invested in one sector, it can make you vulnerable to a single economic risk – say, for example, a sudden withdrawal of demand from China. That’s why diversification is usually a good rule to stick by when investing. That said, focusing on one sector has worked well for Zac to date. But will it take him to the top of the charts by the Game’s end?
Registrations are now closed for this game, and all eyes are firmly on the finish line of 24 October. Will Aaron maintain his hold on top spot, or will we see a completely new top three by the end of October? Time will tell!
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[1] JP Morgan Asset Management, accessed 9 October 2024.
In this newsletter, we review the basics to help them place their first trade.
To be able to complete this Game challenge, it is vital that your students take note of all these Game essentials:
Access and eligibility
Student login portal: Share this link with your students
Problems logging in: Please read ‘How to login’
Prize eligibility: To be eligible, they need to have purchased shares, within the Game, in four different companies over the Game Period. One buy transaction must have been completed by 26 September.
Market hours:
They can put their order in at any time; however, the market is only open between the hours of 10am and 4pm Sydney time. Please note there is a clearing period between 4 pm and 4.12 pm and an order may still be processed over this time.
Tip: If you want to place a trade for the next day, do it after 4.12 pm.
What to buy - develop a Game plan
On the ‘How to participate’ page, you will find some steps on how to get started and developing a trading plan. Your students can also review the Game video tutorials and how to guides. And teachers can access the new curriculum-aligned, skill-based learning materials.
If they are not sure how to place their first trade…
- Guide them to watch ‘How to buy shares' video or read ‘How to place an order’.
- If an order is pending and not being filled please read ‘Pending orders’.
- They also need to understand Order types – see below.
Understanding order types
When placing an order, they will also need to understand the different types of orders.
An order in the sharemarket is the request you put in to either buy or sell a certain number of shares in a particular company. You can enter either a ‘market to limit’ order or a ‘limit’ order as highlighted in the video tutorial - How to buy shares. Knowing which type of order to use is important so let’s take a look at the difference.
What is the sharemarket?
Like any other market, the sharemarket is a place where people buy and sell. In this case, they are buying and selling shares in companies and the goal is to make a profit on those shares. To learn more watch the videos below.
Placing the first trade
A Market to limit order:
When you enter a ‘market to limit’ order you don’t nominate a price to buy or to sell at. Instead, your order will be filled, as much as it can be, at the current market price then it becomes a limit order.
For example: Suppose you wanted to buy 5,000 shares in XYZ company but there were only 4,000 shares available at the current market price. The system would purchase 4,000 shares for you at the current market price, say $10.00 and then for the remaining 1,000 shares your order would become a limit order for 1,000 shares at $10.00. These shares will only be processed if the price stays at $10.00 or less. If your order is not being processed it may be that the price has moved above $10.00.
You can check your pending orders to see if the order has been completely filled or if it has become a limit order. You can either reactivate the order by clicking amend and making it a market to limit order again or alternatively you can keep it as a limit order but change it to a price you are happy to buy (or sell) at.
If you are having trouble understanding this watch - How to buy shares for a market order example.
A Limit order:
A limit order lets you specify the maximum price you are prepared to pay for shares if buying. If selling, it lets you set the lowest price you are prepared to accept.
Your order will be executed at the best price possible. Suppose you want to buy at a limit of $10.00. You will get them at a lower price if there are shares available at a lower price, but if the price is above $10.00 you order won’t be filled.
If you are prepared to sell at $10.00 but no lower you might end up selling at say $10.50 if prices are higher but not at $9.50 because that is below your limit.
Make sure you are clear on what price you are prepared to accept when you put your order in.
If you are having trouble understanding this watch - How to sell shares for a limit order example.
If you don’t like the idea of a ‘market to limit’ order you might consider using a limit order but make sure the price you set is not too far away from the market otherwise your order might not get filled.
Brokerage
In the Game your students will be paying brokerage. Brokerage is the fee a stockbroker charges when shares are bought or sold. Just like the real market, in the Game, every time you buy or sell you will be charged brokerage. Be aware of your brokerage costs if you trade regularly. In the Game, brokerage is $20 for trades up to $10,000 and for each trade over $10,000, brokerage is charged at the rate of 0.2% of the trade value.
Diversification rule
In the Game your students cannot put all their money into buying just one company.
They can do this in real life if you wish; however, there is a belief that this is not the best thing to do as it is very high risk.
In the Game they can only invest 25% (of their total portfolio value) in any one given company (this is called the diversification rule). When you go to place an order to buy shares in a company, the system will tell you the maximum of shares you can purchase based on the current market price and your portfolio value. You don’t have to buy that number - you can buy less but you can’t buy more.
To diversify simply means to invest in different companies and/or different industry sectors that don’t tend to move in the same direction at the same time.
This will help reduce the risk of losing money. Let’s say you invested all of your $50,000 in one company and the shares in this company dropped by 30%. This would mean that your $50,000 investment is now worth only $35,000 – that’s a loss of $15,000. Whereas, if you invested in 4 companies (in different sectors with approximately $12,500 invested in each) and the other 3 companies are doing OK, that 30% loss is now only $3,750 – quite a difference.
This example shows how investing across a range of sectors or companies helps reduce your risk. However, also be careful of over diversifying (having just a few shares in a lot of different companies), because you will end up paying a lot of brokerage and if some companies do really well you want to own enough of them to make some good profits.
Dividends
In Australia, the end of the financial year (EOFY) is June 30. So most publicly listed Australian companies report their full-year earnings results in August and their half-year results in February.
By law, companies listed on ASX must report their earnings, results, and forecasts to shareholders during each reporting season.
Dividends are usually announced during reporting season so in the Game, one of your strategies might be to invest in those companies that have a dividend coming up, in order to take advantage of the additional cash.
Before doing this, it is important to understand what dividends are and how they work.
What are dividends?
Companies use the money they make as profits to pay dividends as a way to reward shareholders. By paying
dividends the company makes itself more attractive to investors.
Companies typically like to keep a consistent pattern to their dividend payments as they know a lot of investors, especially retirees, rely on dividends for income. A lot of investors look at what a company has done in the past to try to get a feel for likely future dividend payments. They can also get more of an idea of what is likely to happen, by paying attention to company announcements as well as what company analysts might say.
This video will help you understand more about dividends.
So how do you receive a dividend?
Companies need to keep track of who owns their shares so they can pay dividends out to shareholders - therefore they need a cut-off date (the ex-dividend date). To be entitled to a dividend a shareholder must have purchased the shares before the ex-dividend date.
In the real world, a dividend will be paid into a shareholder’s nominated bank account on the payment date, sometime after the ex-date. In the Game, a dividend gets paid on the ex-date into your Game account as cash.
Go to the Dividends+ page for all the coming up dividends and their ex-date.
A bit of history - Ever heard of a ‘chalkie’?
Now that you have learnt more about shares and the sharemarket…and experienced the almost instant processing of orders online, did you ever wonder…how on earth did they do this without the Internet?
Initially, trading took place using a call system (1861 to 1961). Using this system a reader called the names of each company and brokers made a bid or offer. Stocks were called 3 times a day. This system was limited as the market was only open for a very short period each day and there were far fewer companies listed on the market back then. Watch this video - to see how it all worked.
Enter the chalkie! In the 1960s trading changed to a post system (1961 – 1990) where "chalkies" wrote bids and offers continuously in chalk on blackboards, as operators who worked for brokers called out orders. All of this made for a very noisy trading floor. Watch the chalkies in action and see how it all happened.
With the post system, everything that was written on the boards was also typed into a price reporting system. The limitation was that during busy times there could be quite a delay between changes of prices on the boards and when they appeared on screens via the price reporting systems.
The advantage of the ‘post trading’ system over the call system was that the market was open for longer - from 10 am to noon and from 2 to 3.30 pm. Back then there were share markets in each State and prices for the same shares could differ between States.
In 1987 a screen-based trading system was introduced and the individual state stock exchanges were combined to form the Australian Stock Exchange. It started with just a limited range of stocks, and slowly all stocks were moved to this system and the trading floors were closed in 1990. Everyone, no matter where they lived could now trade in the same market at the same prices.
Do your students have a Game plan?
It is important that your students have a Game plan. And if they already do, it is wise to review it, to make sure it is working for them. In this newsletter, we share some questions you can use to prompt the thinking process with your students. They can either go through these questions to review their plan or to get a plan happening. This should give them a better idea as to their direction for the Game.
First, what is your overall investment strategy?
- Have you decided to buy and hold for the entire Game? Do you need to be prepared to sell some shares if they are not performing? Or will you hold no matter what?
- Have you decided to buy and sell shares, taking your profit as you go and then investing in something else or the same stock? How much are you spending on brokerage compared to the profit you are making? Would it be better to buy and hold some shares and look to trade in and out of others?
Have you diversified your investment?
This means buying stocks from different sectors rather than all from the same one. This is a great way to help protect your investment.
Have you decided when to take your profits?
If your shares rise by a certain percentage above your purchase price…
- Will you continue to hold them?
- Or will you sell and take your profit so that you can invest in something else? If yes, at what point will you take your profit, e.g. % increase?
If the stock falls or is not performing as you would like, do you have a plan of when to sell?
Have you or your team made any decisions regarding how low you are prepared for a share to go, before getting out?
For example, you might set a certain percentage below your purchase price as the lowest you are prepared to let the share price fall before you sell your shares.
Also, if you decide to sell, what factors or indicators will you use to help you make the decision to step back in?
After answering these questions, and in light of the current market volatility (the price of a share moves significantly up or down), your students will be more prepared, less inclined to panic, and able to make the necessary decisions to stick to their plan.
Avoiding simple mistakes
Here you have a list of the most common mistakes we find syndicates making while participating in the Game. Let your students know this is worth a read, as it may help them avoid making some of these mistakes:
Purchasing small lots in multiple companies.
And this is not just $20 when you buy, it is also $20 when you sell, so you need to consider this.
Not checking your order before submitting
It is important to set up the habit of always checking your order before you submit. Make yourself stop and read the preview order – review the number of shares you want, check it is the correct company, it is a market or limit order, at the price you want, and of course whether it is a BUY order or a SELL order.
Get into the habit of checking each of these things because once your trade is submitted, it can be very difficult to get it back.
Placing your orders too far away
Often we get emails from students wondering why their order isn’t going through. Often what has happened is they have set their buy or sell price too far away from the market, for example, if the share price of a company is at $2.00 and you set a limit to buy your shares at $1.50 - you are going to have to wait until the price gets to or falls below $1.50 before your order is processed, which could be a very long time, if at all.
If your limit order to sell is set at $3.00 – again, you will be waiting until the market hits this price or above before your order is processed.
Placing an order at 4.00 pm for the next day.
Take note that although the market closes at 4 pm there is a clearing period between 4 pm and 4.12 pm where orders will still be processed. If you are wanting to place an order for the next day, make sure it is after 4.12 pm.
Buying just to get the dividend.
So if you buy a company based on the dividend, remember, on the ex-date, the price of the share is likely to fall by the amount of the dividend.
Buying to get the dividend and then selling on the ex-date, will mean you have lost any benefit the dividend gave you as the stock fell by that amount.
It helps to do your research and be sure you are happy with a company and not just base your buying decision only on the dividend.
This is a good lesson for students to not be ruled by their emotions and instead make sure they have a plan and have thought about how they will trade in any type of market.
If they have a plan and stick to it, that can help take some of the emotion out of your trading. For example:
- If they can decide even before they buy, how low they are prepared for their shares to fall and what percentage profit they would like to reach, they can calculate their limits as a percentage, have a set price and take action (sell) when the time comes.
- If the plan is to buy and hold, they need to decide whether they will choose to ride out these fluctuations in the market and hold…or will they have a limit?
It is difficult to know where this market is going to go and is important to remember that we are not always going to be making the right decision and that we may not be using the right plan, but it is all about learning and experiencing the sharemarket. They need to take a look at their portfolio with that in mind.
- If they are holding shares that are in profit, should they lock that profit in by selling some or all of your shares? Or do they hold with the possibility of increasing the profits – however, with the risk that if the market falls further your profits may decrease?
- If their shares are in negative territory, will they hold because they know they are good companies and they will wait for the share price to recover, or will they take their losses and invest elsewhere?
- If they are all in cash at the moment, what factors or indicators will they use to help them make the decision to step into the market?
Having answers to these questions can help them with some of the emotions they may feel and if their plan isn’t successful, they can review it at the end of the Game and learn from it.
Game tip: What affects share prices?
There are a lot of things that can impact the price of a share. Let's review some of them:
The economy: Alongside the impact of global markets, a range of economic factors within Australia can also affect share prices, for example, the overall health of the economy, the level of unemployment and interest rates etc.
Dividends: Another thing that may affect the share price is if a share goes ex-dividend. More often than not the price of a share will fall by approximately the dividend amount when the share goes ex-dividend.
Supply and demand: The sharemarket is a market place like any other. The more people want to get hold of a particular product or in this case a particular share, the higher its price will go. If people no longer want a share, those looking to sell may have to offer it at a lower price in order to sell.
Company announcements: One of the most important factors affecting the price of a share is the company's future earnings. Any changes to the forecast in earnings, either by company management or by market analysts, may impact the share price.
Other factors: Natural disasters such as floods or earthquakes or other disasters (e.g. pandemics) can have a significant impact on the sharemarket. Often, however, these are simply reactions to the unexpected news and the market or shares affected can recover in a very short period of time. It’s helpful not to react to news like this and to take a long-term look at your shares rather than a short-term panic reaction.
You may also find it a little frustrating that often the price of a share at the close of the day isn’t necessarily the same price when the market opens the next day.
The reason for this is that from the time the market closes to the time it opens the following day, there may have been trading on overseas markets, political and economic news may be announced and people may also be revising their investment views.
Any or all of these factors can cause a change in people’s assessment of what is a fair price for a share. Every morning before the market opens, there is an opening auction prior to market open (no trades are processed during this time) however revised or new bids & offers* can be entered – so this may affect share prices at the open.
As students gain an understanding of what influences share prices, this will grow their understanding of the link between the sharemarket and real world events.
Lessons for real-life investing - remember what you’ve learned
Over the last 10 weeks, we hope you and your students have gained some valuable investing skills from your practical involvement. Whether you decide to be part of the next game, or if your students want to take their skills into the real world, here are some tips for them to keep in mind:
- Start with an investment strategy: What do you want to achieve? How long are you investing for – and how much do you need to meet your goal?
- Remember to manage your risk: Have you diversified your portfolio properly – with a mix of sectors, companies, assets and even geographies? Are you careful to invest in a way that suits your timeframe, goals and comfort with risk?
- Do your homework: Have you researched the companies that you’re going to invest in? Are they a growth or value investment? Are you engaging with sharemarket reports, blogs and articles? And are you keeping on top of economic and world events?
- Take a longer-term view: the Sharemarket Game has a very short timeframe. To win it, most people take more risks than they normally would if they were investing real money. That’s because the sharemarket is typically a long-term investment. In general, by riding out short term volatility, investors tend to enjoy more favourable returns from the sharemarket compared with other asset classes.
But while the strategy for the Game might differ from real life, the Game is still full of practical skills that investors use every day. All the information we’ve covered in our lessons can help your students become better informed and wiser investors, including:
- The importance of having an investment strategy
- Understanding the benefits and risks of shares
- Learning how to manage risk
- Understanding the impact of social, political and economic trends on the sharemarket
- Researching a company
- Understanding market indices and sectors
- The importance of diversification
- Understanding dividends
- How to place orders and how to sell shares and ETFs on ASX
- Fundamental analysis
- Understanding how ETFs work
- Using charting tools
- Using watchlists
- Learning sharemarket terminology
- The importance of keeping emotions in check
Follow-up activity 1: Silent Auction
A great way to teach your class about the impact of supply and demand on the market is by creating a Silent Auction.
Follow-up activity 2: Vocabulary games
Word/terminology search
Find words or terms related to the sharemarket or the economy either horizontally, vertically or diagonally.
To use the wordsearch, either:
- Put the students into pairs or groups.
- Set a time limit.
- The pair or group with the most correct answers at the end of the time limit are the winners.
Or:
- Provide students with the word list.
- Students work alone to find the words, crossing the words off the list as the find them.
Word list:
ASX, materials, ATO, bear, bull, buyback, diversify, dividends, economic, interest, order, price, sectors, spread, takeover, tax, volatility, watchlist
Comprehension check
Students can complete these alone, in pairs or in groups. For more advanced classes they need to attempt them without referring to notes or the internet.
- Explain the difference between a bull and a bear market.
- True or false? Woolworths, Coles, Telstra and BHP are examples of blue chip companies.
- Finish the sentence: Companies that pay out ___________________________ are generally a popular choice for investors seeking income.
- Choose the correct answer: A buyback is when a company:
- (a) Buys shares from competitor companies
- (b) Re-buys some of its shares from existing shareholders
- (c) Buys back property that it sold in the last 10 years.
- Label each feature as either day trading (DT) or investing (I):
- A time horizon of more than a year.
- Intention to buy or sell a stock at a particular price.
- Intention to hold a share while it gains value.
- Hold a share for one day.
- The gap between the bid and the ask prices of a share is called the ________________.
- The fundamentals of a stock are the data that affect the price or expected value of a share. List at least 3 examples of a share’s fundamentals.
- List at least 3 Australian companies that belong in the Materials sector.
- List 3 ways you can diversify your portfolio:
- True or false? An emerging market is the same as a developed market.
- Choose the correct answer. To work out a company’s earnings per share (EPS) you:
- (a) minus a company’s share price from its net profit.
- (b) divide a company's net profit by the number of outstanding shares.
- (c) add a company’s net profit to the value of its outstanding shares.
- True or false? A takeover can be done by buying a majority of shares in a firm, or through a mergers and acquisition (M&A) process.
Other ideas
You can create your own sharemarket vocabulary games and tasks using the ASX glossary.
12 steps to get started investing by Equity Mates Media
Check out these Equity Mates podcasts to cover the basics and equip you with the knowledge and skills needed to start your investing journey. We hope you will find it useful.
NEW - Video series part 3: How to use charts
In the final part of this three-part video series, Thomas, the Economist from the podcast Comedian V Economist, explains the different type of charts that investors can use to gather information about the market plus provides some tips on how to read them. Watch now
Video series part 1: Why do we own shares
In the first of this three-part video series, Thomas, the Economist from the Podcast Comedian V Economist, explains the basic concepts of dividends and capital gain and how these can shape your game strategy. Watch now
Video series part 2: Market trends
In the second part of this three-part video series, Thomas, the Economist from the podcast Comedian V Economist, explains the three lenses through which to look at prospective investments: market trends, micro fundamentals and popularity factors. Watch now
Important information
The views, opinions or recommendations of the authors of this market update are solely those of the authors and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN 98 008 624 691 and its related bodies corporate (“ASX”). ASX makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content in this market update is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions. To the extent permitted by law, ASX excludes all liability for any loss or damage arising in any way including by way of negligence.
Comedian V Economist is a product of Equity Mates Media.
All information in this podcast is for education and entertainment purposes only. Equity Mates gives listeners access to information and educational content provided by a range of financial services professionals. It is not intended as a substitute for professional finance, legal or tax advice.
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Do not take financial advice from a podcast.
For more information head to the disclaimer page on the Equity Mates website where you can find ASIC resources and find a registered financial professional near you.
