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young money

Whether they had more time to research investments, extra cash in their pockets as they worked from home or were fascinated by the trading frenzy around certain stocks, 2020 was the year many new investors got off the sidelines and jumped into the market.

Indeed, Canadians opened more than 2.3 million new do-it-yourself investing accounts in 2020, according to data from Investor Economics, via the Investment Industry Regulatory Organization of Canada (IIROC). That’s up sharply from 846,000 in 2019.

While the pandemic’s new investors had very different journeys in the market over the past 15 months, collectively their portfolios are up and regrets are few and far between. They are also aware that this was an extraordinary time for the market, and are preparing for ups and downs in the years ahead.

Here are some of their stories:

Angela Wright, early 30s, writer and communications consultant, Ottawa

Angela Wright, a young Ottawa-based investor, along the Ottawa River. Wright is one of many young investors that started their financial journey during the pandemic.Ashley Fraser/The Globe and Mail

She already held a few mutual funds through her bank, but Angela Wright had been thinking about investing directly in stocks for a while. It was the convergence of a few factors at the start of the pandemic that led her to take the plunge – namely, the market drop, the chance to open an account offering commission-free trades and more time to research potential investments.

“We were on lockdown – there was not much else going on. And so, it was a really good opportunity to take time and learn about the companies that I wanted to invest in,” she says.

Ms. Wright opened a Wealthsimple Trade account in March, 2020. After going through the market sector by sector, she began watching specific stocks that seemed undervalued and those with high dividend yields. A deeper dive took her into earnings per share growth rates, model portfolios, insider reports, and making real-world observations about products and services people are buying.

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She tested the waters by buying three stocks (that she has since sold) – Bank of Nova Scotia (BNS), Fortis Inc. (FTS) and Ford Motor Co. (F). It wasn’t long after she got into the market last spring that her portfolio started to grow.

“I think that really helped boost my confidence and then I started piling in a lot more money,” she says.

She has since invested in stocks such as SpinMaster Corp. (TOY), Bank of Montreal (BMO), Equitable Group (EQB), Capital Power Corp. (CPX), Great-West Lifeco Inc. (GWO) and Labrador Iron Ore Royalty Corp. (LIF).

Overall, Ms. Wright says she is happy with her portfolio’s growth of about 43 per cent since last March – which she says resulted from doing research and having a strategy.

“I do enjoy following the market, seeing what’s going on, selling companies when I’m no longer confident or interested in them, and buying new companies,” Ms. Wright says.

“It’s a really fun pastime and it’s also been a really good distraction from a lot of the chaos that’s gone on over the past year, so I think it’s something that I’d like to stick with.”

Will Evans, 22, lead sales associate, Ottawa

Will Evans, a young investor, near his apartment in the west end of Ottawa.Ashley Fraser/The Globe and Mail

After seeing Reddit’s WallStreetBets forum all over the news, Will Evans decided to get involved in investing in January, by opening a Wealthsimple Trade account.

“I noticed that the markets were going up ... I started watching YouTube – specifically a couple of YouTubers,” he said. “Everybody talks about the stock market like it’s this sketchy, speculative thing and it’s more for rich people, but I realized it’s not necessarily just for rich people.”

Mr. Evans’ first holding was Nokia Corp. (NOK), as well as some cryptocurrency, which he has since sold. He also holds a few exchange-traded funds, such as the Vanguard S&P 500 Index ETF (VFV) and has recently bought the iShares Core Equity ETF Portfolio (XEQT). He has seen gains in both his equity and crypto holdings.

“Whatever you hit pretty much went up when I started, right? So I think I just got in at a good time,” he says.

Depending on the month, Mr. Evans contributes between $200 and $400, split between a registered retirement savings plan (RRSP) and tax-free savings account (TFSA) within his Wealthsimple account, with plans to eventually take advantage of the Home Buyers’ Plan.

As someone who is new to investing, Mr. Evans says he has some short-term concerns, as he is unsure of where the market might go next with prices as high as they are – although these worries are tempered by the fact that he is investing for the longer term.

“If I were in, for example, GameStop or something like that, I’d be checking my portfolio every five minutes,” he says.

Spencer Craig, 26, account executive, Toronto

A year into starting his career after earning his bachelor’s degree, Spencer Craig says he wasn’t sure whether he had the spare cash to invest in 2020. The lifestyle changes brought about by the pandemic changed his perspective, and he jumped into the market last June.

“Not having to commute any more frees up some time and just with so many things being closed too, I had a lot more time on my hands, and so I took a deep look at my finances and realized that my chequing account has been growing over the last several months,” he says. “It was kind of a perfect storm of things, really, to bring me in.”

Mr. Craig looked to Reddit, YouTube and Yahoo Finance for both stock information and investment basics. Starting with a couple of thousand dollars to invest, he says his first holdings were “classic COVID stocks” – big Canadian banks, Air Canada (AC), technology ETFs, grocery delivery service Goodfood Market Corp. (FOOD) and a small amount of bitcoin and ethereum.

Mr. Craig has now moved to contributing a percentage of his gross pay to the TFSA within his Wealthsimple Trade account – although his portfolio is up 30 per cent, he says he has changed his approach over the past few months.

“As time went on and I came to realize that what I was doing in terms of stock-picking was not going to work permanently ... you could throw a dart at a dartboard and pick a stock last year and have made money. I came to realize that I needed to stop doing this at some point,” he says.

While he hasn’t sold last year’s holdings, more recently he has been investing in iShares Core Equity ETF Portfolio (XEQT) for exposure to the global market, as well as an S&P 500 ETF and some renewable energy stocks.

Anoushka Gupta, 35, market research, Toronto

Anoushka Gupta at her Toronto area home. Gupta, an anthropologist working in market research, began her investing journey when the pandemic began in 2020.Fred Lum/The Globe and Mail

Busy paying off the expenses from her MBA studies, Anoushka Gupta says she didn’t have the opportunity to build up her savings or think about investing until a tax refund a couple of years ago led her to open a TFSA with an online bank.

Last year, she used part of this TFSA and disposable income realized during the pandemic – including saving on rent after moving in with her partner – to take the next step and start investing. She opened a Questrade TFSA and RRSP, with her portfolio split between ETFs, stocks, and a small cash holding in the TFSA account. About 25 per cent of her ETF allocation is in BMO Aggregate Bond Index ETF (ZAG), with the rest in two equity funds (Canada and international). She also put some savings in a TFSA with another institution, earmarked for unexpected expenses.

One of her first holdings, she says, was e-sports company Enthusiast Gaming Holdings Inc. (EGLX), which her research suggested would be a good investment.

When the stock was down near $1 a share, Ms. Gupta says she decided to invest and see what would happen. She still holds EGLX, which is currently trading close to $7.

Another early investment was Starbucks Corp. (SBUX), which Ms. Gupta says has been doing well, but came with some buyer’s remorse when she later realized the stock is U.S.-listed. She is not completely sure how the impact of the currency exchange is going to pan out.

She looks to several media and online sources weekly for trends and investment information and checks in with her partner, who works as a financial coach. She has also set alerts on an app for stocks she owns, and those on her radar, to keep her in the loop.

While Ms. Gupta says she started investing when the markets were low and her portfolio has grown since last year, she is readying herself for a different outcome in the future.

“I need to sort of temper my expectations,” she says.

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