‘I’m sticking with my bets against the hedge funds’

As stock markets tumble, Sam Benstead checks in with the young investors who started trading during the pandemic

Not long ago, share prices were flying amid expectations that lockdowns had ushered in a new digital world. No price was too high to pay for the companies that facilitated the revolution. A record number of first-time investors bought in – and made huge profits from the likes of Zoom, Peloton and Amazon.

But the world is a very different place today. Interest rates are rising to tackle inflation, prompting some professional investors to flee expensive “growth” stocks for the safety of cheaper but profitable “value” firms.

Recently, as tech shares have fallen, younger traders have bought the dip. Tech-focused Scottish Mortgage was the most bought share on Interactive Investor for those under 34 last month. Tech giants Apple, Amazon, Alphabet and Microsoft all made the list of the most popular trades among Freetrade customers aged under 25.

But not everyone is taking this approach. Telegraph Money spoke to young investors to see if they had stuck or twisted.

CHECKING OUT Having loaded up with exciting but expensive technology stocks in 2020, including Apple, computer chip designer Nvidia and gaming firm Sea Limited, Bertie Millis, 27, from Brighton, has now sold out following a sharp drop in tech firm share prices.

“My portfolio has gone from £4,000 to £3,000, so I decided to sell, as I am worried that markets will fall even more. I’ve been reading research from people far smarter than me about how interest rate rises will prompt a rotation into safer investments. I think the selling will eventually end and then I will buy the technology firms that I love once again,” he said.

Mr Millis, who works in technology, said the future was still great for firms involved in virtual reality and computer chips, but the time was not right to add more money.

“I don’t want to own banks or oil stocks. These are not businesses I understand and their performance will trail off,” he said.

One lesson from the tech crash for Mr Millis was to recognise the value of a sure bet. He is now investing in a Lifetime Isa, which the Government tops up with a maximum of £1,000 every year.

“A free 25pc from the Government is amazing, given how scary stock markets are at the moment,” he said.

STAYING ALL-IN Andreea Ion, 26, from London, is not wavering from her investment strategy of buying fast- growing technology companies, despite a 30pc drop in her portfolio.

Her top holdings are still the same, including virtual doctors’ appointment firm Teladoc, cybersecurity firm CrowdStrike and financial technology firm Block, formerly called Square.

She said: “The steep decline in the share prices of growth stocks has been painful, but has not altered my view that these are great companies if you hold them for 10 years.

“I am topping up my portfolio every month and taking advantage of lower prices. In fact, my stocks are now at the same valuations they were two years ago, but their businesses are more established.”

The key lesson from a tough year for tech stocks, according to Ms Ion, who runs the Instagram blog Stocks & Savings, was that buying shares for the long term is far easier said than done. “The decline taught me what risk tolerance really means. I survived, and now these great companies are cheaper,” she said.

But Ms Ion will not pay any price for a

‘The crash taught me the real meaning of risk tolerance’ ANDREEA ION

company she likes. She said she did not invest in Rivian, an electric car company that hit a $100bn (£74bn) valuation when it floated its shares in America last year, despite hardly selling any cars.

THE GAMESTOPPER Another investor sticking to his strategy is Bailey Greetham- Clark, 19, from Lincolnshire. After starting out buying low-risk index funds in 2020, he bought shares in struggling American cinema chain AMC Entertainment and US computer games retailer GameStop.

Both companies were being “shortsold” by hedge funds, and Mr GreethamClark joined thousands of online traders in an attempt to push up their share prices. One year on, he is still buying more to force hedge funds to close their short positions at a loss.

“I’m doubling down and buying the dip on these shares. I just own these two stocks and will keep investing without being too emotional. I am holding strong and working with other people to fight against the short-sellers. There is still a lot of activity in online communities and you have to stick to your guns,” he said.

Mr Greetham- Clark, who runs Be Great Fitness, a gym business for less mobile people, has £4,000 in his portfolio on total contributions of £2,500.

Watching her portfolio fall 30pc was not easy for Andreea Ion, but the 26-year-old investor is more confident than ever that fast-growing technology stocks will be the big winners over 10 years. She has been regularly adding to firms such as CrowdStrike, Amazon and Teladoc.