It was a big gamble, but it paid off in spades.
Going all in with a stock trade helped a pair of Edison School students come out on top in a western Canadian investment program.
The team of Owen Martin and Chloe Crump placed first in Western Canada in the Junior Achievement investment strategies program, earning $81,000 over the six-week period with their investments
The program had 2,009 teams of students from across the prairies and western Ontario invest $100,000 in virtual money in an online simulation.
The Edison Grade 10 students finished with a portfolio valued at $181,801.
Making $80,000 in six weeks required plenty of research and taking risks.
Crump said they would maintain a regular watch of the markets, keeping an eye open for top movers daily.
“They have lists of them, with per cents up and down in a day and then based on what it’s usually doing you can tell if it might go back up by a lot,” she said.
As part of the competition, they could trade any stock worth $2 or more on the NYSE, TSX and NASDAQ exchanges. Teams could also borrow up to $50,000.
The money was fake, but the trades were all done in real time in alignment with actual market conditions and values. Since they were done as part of the program, they did not affect the real-world stock markets.
Crump said the limited timeframe required an aggressive investment strategy.
“It’s a very short amount of time, you can’t take on the ones (investments) that are going to make money in a long-time,” she said. “We made most of our money in a span of three days.”
Crump said they were in third place at one point and knew they would have to make a big move to win.
Their biggest gain came from an investment in Wins Financial Holdings. It was a gamble, and Martin went all in.
“I bought it in the morning for like $50 a share and I put all of our money in it and then it hit $163 a share later in the day,” he said.
Drama class interfered and he wasn’t able to sell it until later when the price dropped down closer to the $100 mark. Still, the gamble paid off.
However, if the money was real Martin said he might not have been willing to take such a big risk.
The program was a valuable lesson, he said, teaching about investing, finance, the importance of research and the risk that come with playing the stock market.
While he and Crump made $80,000, Martin said other teams at the bottom of the rankings ended up in debt.
“It teaches you about money management and how no matter what you do there is a risk,” said Martin.
The team of Crump and Martin were one of four from Edison School involved in the program. Three other Edison teams placed in the top 25 per cent of the competition and they ranked high among Alberta teams.
“It’s an exceptional result but we’ve done in the top quarter in the past,” said Edison School principal Billy Gilliland.
Timmi Shorr, Junior Achievement senior regional co-ordinator, said it’s the first time a team from the Southern Alberta region outside Calgary has placed first.
She said the program is intended to teach students about investments and finance.
“The premise is to give them an introduction to investing in the stock market, and what stocks are, and dos and don’ts, and fraud,” said Shorr.
She said introducing people to the stock market at a young age helps them learn and be more knowledgeable for when they are older and interested in investing as an adult.
“When we’re talking about financial literacy and teaching students how to manage their money, it’s one thing to teach them how to spend it and how to save it, but then it’s also making it work for them,” said Shorr.