With returns from traditional investments on the slide, more pre-retirees than ever before are turning to the stock market to bolster their nest eggs.
But for many first-timers it can be a confusing world, full of jargon, pitfalls and a head-spinning array of options that require a seemingly encyclopedic business knowledge.
That’s where the option of copy trading has taken such a foothold.
Copy trading allows absolute beginners with zero knowledge of the business pages to automatically copy the positions opened and managed by others.
One of the major players in this market is multi-asset investing platform eToro, touted as the largest social trading network in the world.
Its unique CopyTrader function allows Australian residents to copy and leverage other investors’ expertise, with as little as US$50 in your account.
Broke and unsure of her next move, Sydney ‘cat-mum’ Sharon Connolly famously used a $20 eToro voucher as her entry ticket in 2013.
Fast forward just a few years and today the 52-year-old is on the other side of the eToro trading fence managing a $100,000 investment portfolio, mainly made up of US tech stocks.
We caught up with Sharon (pictured below) between her F45 circuit training and her day job as a change manager to find out more.
What do you say to the first-time investor nervous about the stock market volatility we have now?
You need to think about your attitude around how much money you’re willing to risk, and when you want to access your money. You could either get lucky and double your money or you could lose half of it – it’s important to be aware of the risks of short term investments and have a long term outlook.
How much did you lose in the initial coronavirus crash and have you got it back, and how?
The first day of the crash I lost the price of a pretty nice small car. The next day it was a car towing a boat..and then a jetski.
A lot of my investments fell by up to 25%. They’re mostly back, and well up now. The important thing is not to panic. Markets are cyclical so I knew that if i waited, I would probably recoup my losses at some point.
With so many people following your trades, do you feel pressure to perform?
Yes, when I was originally losing 25% in a day, I was concerned about my followers and copiers. However, those that stuck with me, reaped the rewards as soon as I put the appropriate measures in place by limiting the amount of leverage I used on trades, and paid close attention to news cycles, which are significantly impacting market performance and confidence.
You’ve been quoted as saying it’s never too late. But what about those newly redundant 50-somethings who are reluctant to lose what little they have in the current recession?
This will vary from situation to situation. For some, getting employment in the near future may be difficult, and it may not be the right time to think about high-risk investments.
I’m 52 and a change manager in financial services, and I’m confident I’ll still be able to work in this profession for at least another 15 years (if I want to).
For a lot of people in their 50s, now might be a great time to start investing. Children have finished schooling, mortgage may be paid off, you may be in a more senior position in your job. For some, the 50s could be the wealthiest decade of their life, in which case it’s a good time to look at investments that could return more.
How much do you recommend starting with? What’s the secret to your success?
Start with the price of a nice meal. My secret is small consistent investments, and I find that my followers often ask “Why so many small trades?”
Those are my consistent weekly investments. Whenever I have a bit of spare cash I put a proportion in my portfolio.
Why eToro? What makes this platform different from its competition and why do you stick with it when there are other options out there?
Simply, I enjoy the choice and flexibility that eToro provides me with. The platform allows me to invest in stocks and commodities where my interests lie, whenever and wherever I want. The ease of the platform also allows me to easily buy, hold and sell assets, as well as monitor my portfolio in real-time.
Are you on track for a comfortable retirement? If so, what’s your plan?
Before eToro things were not going as I originally planned. I got divorced. All prior plans went straight out the window then, and I was left jobless and penniless in Singapore without the ability to work. Even though I’ve earned a pretty penny on eToro, I will still be working for more years to come…because I don’t want to downgrade my lifestyle and I enjoy working. And of course my investment portfolio has grown substantially month on month.
What’s your best investment advice to ensure a comfortable retirement?
A man is not a financial plan.