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Investing 101

Whistler Secondary School investment club well represented in nationwide competition

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talking with a friend last summer, Whistler Secondary School (WSS) student Ben Hepditch noted how young people—himself included—tended to spend their hard-earned cash on things like shoes or expensive clothing when it could be put to better use.

But where is a young person to start?

"Initially we were like, 'Oh we can create our own investment fund,' and then we realized you have to be 18 to open a trading account, and it was way too expensive and complicated," Hepditch recalled with a laugh.

So the 17-year-old Grade 12 student opted for the next best thing: an investment club run through his school.

"There's a lot of [students]—especially Grade 12s and Grade 11s—interested in business, and wanting to go into commerce for university," he said.

"So [we thought] this could just be an all-purpose club about business-related things, like finance and stuff, because there's a ton of interest for it in our school, so this is just a great place to start."

Hepditch tapped financial advisor Stuart McConnachie of Edward Jones for guidance.

"We wanted to educate everyone who was interested in the basics when we got started, so I reached out to him and asked if he could come in, asked if he knew about any ways we could do a competition-type thing," Hepditch said.

"And he was super helpful. He found this competition for us to participate in, and came in and taught everyone, so he was awesome. Couldn't have done it without his help for sure."

With McConnachie's guidance, the club—about 25 members strong—took part in a Canada-wide investment competition run through Junior Achievement Canada.

Teams were given $100,000 in "cash" and a $50,000 loan, with options to trade on the TSX, NASDAQ and NYSE. Teams were limited to only buying stocks worth $2 a share or higher, with each trade costing a one-time $25 transaction fee.

The competition ran from mid-October to the beginning of December, with final rankings based on who had the highest-valued portfolio when it ended.

Out of more than 2,300 teams participating nationwide, three of the WSS club's teams cracked the top 200: Katie Faerge, Savannah Albrecht, and Noah Hayter (198th); Liam Tennock and Hugh Saint-Jacques (60th in Canada, 21st in B.C.); and Hepditch (5th in Canada, 1st in B.C.).

Having participated in such competitions himself in the past, McConnachie knew what was going to be helpful for the club.

"Really, when you have such a short time frame, it's not so much an investing competition, but more of a speculation competition," he said.

"So you're not looking to set up a well-thought-out strategic portfolio that's going to perform over the long term, you really want to hit a home run. So you gotta get lucky."

Did he expect Hepditch to get as lucky as he did on his first attempt?

"No, I was so proud," McConnachie said. "I'm so happy for him. That was awesome to see."

The secret when it comes to a speculation competition, he said, is to find something that's very volatile to use as a holding.

"And then you have to cross your fingers," he said.

"It's not like investing when you're actually trying to invest with a purpose. It's very, very different. But a great way to motivate people to learn about some of the basics."

For Hepditch, the secret was a prosthetics company out of Boston.

"We kinda figured out that biomedical, things in the medical industry—especially pharmaceuticals ... they can have very high risk but high returns," he said.

"What happens is the penny stocks are traded so low because these companies are losing a ton of money, but then the thought is well, once they start making money, their value goes up.

"So we're like, 'Oh that's probably the best industry to look at."

WSS teacher Emma Stapleton said it was impressive to see how many students attended a seminar held by McConnachie given how many other extracurricular activities the school offers.

"The group was a success. Many students from different grade levels got involved. It was great to see students taking an interest in the competition, doing research, creating strategies and taking calculated risks (and some not so calculated risks) within the simulation. Some students were even getting up when the markets opened!" Stapleton said in an email.

"Looking forward, Ben is already searching for similar stock-market simulation competitions and we are looking into the possibility of a field trip to Sauder School of Business to give students exposure to some future possibilities in business."

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