Dubai: Several teen students in the UAE have proved time and again how they didn’t wait till they graduated from school or college, or even get a well-paying job to start earning money.
Even as students routinely stay up to date on their curriculum-based and predominantly theoretical courses or grades, when it comes to making money practically or on the stock market, there has been a growing trend wherein many are learning the ropes, venturing out – and succeeding.
Here are detailed accounts on how three Indian expatriate students went about increasing their profits after investing their savings on the stock market since the pandemic began last year.
#1: How this 16-year old Abu Dhabi student more than tripled his savings
Advait Arya, a 16-year-old Indian student of Abu Dhabi’s Raha International School, more than tripled his savings despite some stock market downturns and making a few incorrect investment choices over the course of the past year.
Using personal allowance, and gift money from relatives, Arya started investing in the stock market in July last year with Dh8,000 in hand. Arya’s savings rose to Dh30,000 in the span of a year.
With the help of investment-related websites like Investopedia and YouTube tutorial videos from financial experts, Arya began to build his stock portfolio on eToro, an Israel-based trading platform.
“I believe persistence is key when trading in the stock market, there are going to be times where money will be lost but this will only educate you to make better decisions in the future and give you scope to analyse the reason for the downturn,” Arya added.
Arya generally implements a long-term investment strategy on his portfolio, which in his opinion is “worth more than short term gains”.
Arya mostly invests in top heavyweight companies in the technology and consumer goods industry, including US companies such as Tesla, Apple, Etsy, Disney, Dropbox, Netflix, Target, Alibaba, and Facebook. “However, I also diversify my portfolio with cryptocurrency, renewable energy stocks, as well as healthcare and the service industry stocks,” Arya said.
He also invests $100 (Dh367) into a fund that tracks the US S&P 500 index (a key stock market benchmark, tracked by investors and stock markets worldwide) every month, which has an annual average rate of 8 per cent return. This Arya believes will be “extremely beneficial by retirement”.
"Even though I have tried investing in high risk-high reward companies, I found it extremely challenging to make money on them because it requires a lot of research and commitment which I could not give.”
Arya uses the eToro platform as his primary stock trading platform which gives detailed insights with graphs into trending stocks and provides examples of time-tested investment portfolios of successful stock traders around the globe.
"I started trading during a period of market volatility mostly because I was interested in exploring the stock market which could keep me occupied during the summer break last year.”
#2: How this 17-year old Dubai student more than tripled his savings
Mohammed Salahuddin, 17 years, made around Dh49,000 in profits after having invested $3,000 (Dh11,019) of his savings since June last year.
After investing his savings, over $60,000 (Dh220,381) was invested in the form of two separate instalments from his family’s businesses. This was after he proved he was able to manage money, trade effectively and bring in significant returns with the amount of capital he had.
“Today I manage investments worth $85,000 (Dh312,206) (in both cryptocurrencies and stocks),” Salahuddin said.
“My total savings is currently down from nearly Dh75,000 after the cryptocurrency market took a hit recently. However, a majority of my savings is still invested in stocks and cryptocurrencies for the long-term, leaving just a small sum in my savings account.”
Salahuddin invested in a wide variety of stocks, from Coca Cola (Trading symbol: KO) (which is very fundamentally stable and provides dividends to its shareholders) to extremely volatile companies like Tesla (TSLA), which has gone up over 500 per cent since last year.
He lists out a few US stocks, namely Apple (AAPL), Microsoft (MSFT), Virgin Galactic (SPCE), Nvdia (NVDA), Netflix (NFLX), Berkshire Hathaway (BRK), Fiverr (FVRR), Spotify (SPOT) and Zoom (ZM), as his favourites.
Also, he favours an exchange-traded fund (ETF) that tracks key US stock market benchmark, the S&P 500, which comprises the 500 largest companies in the US.
“As I was constantly buying and selling, there was never a fixed percentage as to how much I invested in each company,” he added. “However, I would invest larger percentages into companies which are less volatile and more fundamentally sound, such as Berkshire Hathaway and Apple.”
For those starting out, Salahuddin recommends a $1,000 (Dh3,670) to start off your initial investment, to avoid emotional play on your market-related profits or losses whilst they maintain playing larger trades on their demo trading accounts.
#3: How this 14-year old Dubai student more than tripled his savings
Aadi Verma, a 14-year old student of British international school JESS in Dubai’s Arabian Ranches, read up on the stock market and dabbled with small amounts at first.
After some success, he went “all in”, investing all Dh5,000 of his savings, when there was a stock market crash in March last year, after seeing it as an opportunity to buy stocks at lower than market prices.
Verma later got about Dh15,000 from several of his relatives after he started to gradually grow his investment portfolio by making smaller transactions on different stock markets worldwide.
By buying and selling stocks on US stock exchanges, besides a few in the Chinese stock market, he now has an investment portfolio worth Dh260,000, with investments also in cryptocurrencies. However, like Salahuddin, Verma’s profitability too recently dropped due to the current decline in crypto prices.
At first, the student used to deal mostly in penny stocks – shares whose value is normally below $5 (Dh18) but have the potential to skyrocket – or nosedive. As his profits soared, he changed strategy, going for “growth stocks” that are more stable, more expensive and gradually increase in price, typically.
He has invested in stocks of over 40 companies, including famous ones such as Amazon, Google, Apple, Tesla, Microsoft, Facebook and Boeing, as well as lesser-known ones such as Beyond Meat and those that have recently gone public.
When it comes to Verma’s investment strategy on opting either long-term or short-term stocks, he believes in a balanced portfolio which also includes a portion of his investments allotted towards cryptocurrencies given the digital currency’s growth potential.