Does experience matter when it comes to investing? It did not last year, with younger investors beating their older ones by 9 percentage points on average.
According to Interactive Investor, the stock broker, investors aged 18 to 24 made 8pc on average while over-65s lost 1pc. Returns went lower as age increased.
So what was behind the young guns' excellent performance? Telegraph Money caught up with youthful investors making expert returns to find out.
El Willard – 150pc return
Personal trainer El Willard (pictured above), 22, only began investing seven months ago. Already her investments are up by around 150pc.
She owns 13 stocks, the best performer of which has been Plug Power, an American firm that makes hydrogen-powered batteries for cars. She bought it when one share cost about £4. Now the price is around £40.
“Seeing that made me focus on sustainable stocks. I am a vegan and passionate about the environment, so I make sure a company’s ethics match my own before investing,” Ms Willard said.
Another success story has been NIO, the Chinese electric car maker. “Its stock is up by about 50pc since I bought it. We’re all moving towards using electric cars and I believe it could dominate the market in China like Tesla does in America.”
She has made a loss on one stock, Beyond Meat, which produces vegan meat substitutes. “My shares are currently down by 33pc – but I’m holding on hope. The firm is partnering with McDonalds to create a range of plant-based fast food. Once that is launched, it could boost the shares,” Ms Willard said.
She added that investing was not something she had ever learnt about in school or at home, so she was having to teach herself everything from scratch.
Lewis Harding – 20pc return
Lewis Harding, 22 from Leeds, got into investing at the age of 18 when he started to buy cannabis stocks.
“I got in at a good time, when more places were legalising the drug, and used the returns to buy myself a car a year later,” Mr Harding said.
“But I was essentially a short-term speculator. Since then I’ve been teaching myself about investing and am buying for the long-term.”
He has about £4,000 invested and has made 20pc since March 2020. Just over half of his money is in exchange traded funds, which track global stock markets, and 30pc in individual stocks on Freetrade, an investment app. The rest is in gold and Bitcoin.
“I own these as a currency hedge. Governments have been printing more money so it is losing its value. I want to own something that holds its value. My Bitcoin investment is up 544pc,” Mr Harding added. He works as an accountant, which he said helped when reading financial statements.
“I look for big companies with good balance sheets, popular brands and good management. My biggest holdings are Berkshire Hathaway, Warren Buffett's investment firm, British American Tobacco, a cigarette manufacturer, and goods producer Unilever.”
Mr Harding said one stock he was particularly excited about was online retailer Alibaba, considered to be China’s answer to Amazon: “I think it has lots of potential to grow.”
Tiernan Fitzgerald – 20pc return
Tiernan Fitzgerald, 21 from London, started investing this year. An apprentice at an investment manager, he took a “value” approach to stock picking, where he only bought shares trading below their real value based on their earnings.
He bought oil giant Shell at the beginning of March at £9.40 a share and sold it at the end of the month for £12.20 a share, a 30pc gain. He bought it again in November at £14.20 a share and has not sold it.
Another company he thought was undervalued was Lloyds, the bank. He bought shares in mid April at 29p and is yet to sell them. Trading at 36p currently, he is sitting on a 25pc paper profit. He also bought IAG, which owns British Airways, at 143p a share in December. He is up 7pc on the trade. Overall, his portfolio returned 20pc last year.
“I am reading The Intelligent Investor, which is Warren Buffett’s favourite book on value investing. It teaches you to be contrarian by buying good companies which are trading below their real value. Britain is full of companies which meet this criteria.
“Other younger investors are drawn to technology firms, and I can see why. But for me to invest I would need to see revenues go up and prices to come down. With technology stocks you don’t have a margin of safety, which means that the slightest bit of bad news could send shares crashing,” he said.