This week marks my one year Sharesies anniversary! On 10/1/20, I started my investing journey with Sharesies with a $5 sign up bonus. (you too can get a $5 sign up bonus via THIS link).
My first buy was units in the Smartshares NZ Top 50 Fund (FNZ) (an index fund of the NZ Top 50 weighted based on market capitalisation and capped at 5% per company. It is different to the NZX 50 whose weighting is based purely on market capitalisation).
Since then, I haven’t been super active in the sense of buying up shares in bunch of companies or funds. From the start, I decided to adopt a dollar-cost averaging approach where I invest a fixed dollar amount each week. So, each week, a set amount is automatically transferred from my bank account into Sharesies where I’ve set a DIY order auto-invest.
The beauty of the setup above is that it’s SET & FORGET! However, I’ll admit that at the start, I spent a lot of time ‘checking-in’ to see how things were going. This was even more so the case come March 2020 when COVID hit and markets across the globe dipped sharply! As traumatic as it was for many, it was a little of the opposite for me. If anything, there was some excitement to see how the markets were going to respond to the Coronavirus Crash.
One lesson I drew from the crash was the meaning of risk tolerance. I saw a handful of my colleagues panic and make changes to their investments when the markets were low. They thought they were making quick and smart moves but they moves only saw them locking in losses. The thousands they lost is a story for another time.
The amount that I started off investing was something that we could afford to let go off without breaking the bank. In the second quarter of the year, I upped that amount ever so slightly. During the Coronavirus crash, I made a couple of adhoc buys which was me essentially timing the market. This is something you will hear a number of people speaking out against.
Along the way, there were a couple of initial public offerings (IPO) and share offerings in New Zealand. In October 2020, Rua Bioscience Limited offered investors the opportunity to buy ordinary shares for $0.50 NZD. I work in pharma (not medicinal cannabis) and have read up on the benefits of medical marijuana. After doing a bit of research on Rua and the industry, I decided to dive in. I think weed is the future!
All it took to apply was filling out a quick and simple form and depositing the dollar amount of shares I wanted into my Sharesies wallet. The good thing about the application process is that Sharesies didn’t charge a transaction fee. The day after the application deadline, an email came through informing me that the application had been processed. But, due to strong interest (total amount applied for was more than what they had to allocate), all applications were scaled back by 27%. Example, $100 application = $27 worth of shares. The remainder of the money was credited back.
Day one on the New Zealand Stock Exchange, RUA debuted at $0.70! That’s a 40% premium on the issue price. Since then, it has had some ups and downs but is still tracking above its IPO price.
As at the writing of this post, my investment in FNZ50 is +17.95% and RUA is +14%. But this is something that can change just like that! So all in all, things are ticking along just fine. I have learnt some things in the last year and there’s still a LOT more learning to be done.
Lessons learnt investing using Sharesies
Some of the main things I’ve learnt include (but aren’t limited to):
- Dollar cost averaging
- Risk tolerance
- Fees – something that you really have to take into consideration with ALL investing. Some of the fees charged may look like relatively small and insignificant amounts. But, they are eating into your returns and over time, could make a big difference. Read Investment fees and the difference 1% can make by Nick Carr, a financial adviser based in Wellington.
- Participating in an Initial public offering (IPO)
The turn in world events in 2020 made it a bit more of an interesting time to start being more active in investing. It was somewhat good to have gone through a market crash as it added to the learning experience. In the year ahead, there will be more learning and maybe slight adjustments to my investing strategy.
All in all, my first year with Sharesies has been a positive one. Their interface is nice and easy to understand and use. They do their best to educate users in the world of investing. This starts off with a handful of emails after sign up. They also send out regular updates with market information, webinars (which you can find on Crowdcast or YouTube). There’s also a Share Club Facebook group where you do have to take most if not all of the discussions on the group with a pinch of salt.
One feature that they currently don’t have that would be a plus is an automatic dividend reinvestment option. Dividends are paid into your wallet meaning that if you want to reinvest, you need to login and place a manual order. Having the option to have it done automatically means less logging in and making it more set and forget.
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