Stock market investments or sports betting, which one is the best ?
Many people today think that sports betting is a simple hobby based on just gambling. And it is probably for this very reason that 97% of punters lose money.
But can sports betting be considered as a serious investment?
We'll try to answer that question as precisely as possible in this article.
THE STOCK MARKET, A FASHIONABLE INVESTMENT SOLUTION
These days, people find it easy to invest their capital in the financial markets. Stock market shares are all the rage and are considered a 'reliable' investment by most people.
And when you decide to put your money into the stock market, your return will depend on a number of determining factors:
THE OVERALL PERFORMANCE OF THE MARKET
If the financial system is in an uptrend, your shares will generally have a better return because the trend is towards profit. On the other hand, if the market is falling, you are more likely to see a reduction in your return, or even losses.
THE PERFORMANCE OF YOUR CHOSEN SHARES
There are many details that affect the profitability of your shares, such as the company's economic trajectory, the evolution of the sector or the company's redistribution choices. As a result, some stocks may outperform or underperform the general market.
YOUR ADVISER'S ABILITY TO GUIDE YOU TOWARDS THE RIGHT INVESTMENTS
When you decide to place your trust in an adviser to invest your money on the stock market, this person will have total control over your various investments, and your return will depend on whether or not he/she is able to estimate the performance of the market and the companies he has chosen for you throughout your contract.
Moreover, you'll have to face up to certain additional expenses that are part and parcel of the game. Entry fees, share portfolio management fees, buying and selling commissions, etc. all have to be taken into account.
THE TOTAL AMOUNT YOU INVEST EACH MONTH
And, of course, the money you earn each month from your various investments is closely linked to how much you are able to invest. Firstly, because in general, the more money you invest, the more you are likely to earn, but also because the more capital you have to invest, the more effective the solutions you are offered are likely to be.
When you decide to entrust your money to someone who specialises in trading and portfolio investment, you are placing your full trust in them and recognising that they are simply more qualified than you are to help you improve your returns.
This is not only because it's their job, but also because these experts have software and algorithms that can identify the best times and places to invest, and execute trades automatically.
These intelligent machines tend to perform better than individual investors. In addition, it is essential to bear in mind that large investors possess information that is inaccessible to you and naturally use it to their advantage.
SPORTS BETTING AS AN INVESTMENT
But wait, the main topic of the day was sports betting, wasn't it?
So let's focus for a few minutes on this area. Sports betting doesn't really have a market component (although betting limits on certain markets may prevent you from going for maximum profitability).
Whether you make your own selections or follow the picks of a paying Tipster, your profitability depends entirely on your choices, rather than market trends.
As far as fees are concerned, which could be similar to those of the stock market system, you should bear in mind that the commissions charged by bookmakers can be quite substantial. For example, when betting on a match with odds of 1.94-1.94, the bookmaker inherently includes a margin of 3.00%: 1-1 / [(1 / 1.94) + (1 / 1.94)].
In the short term, we don't necessarily pay attention to these margins and the loss of earnings they represent. However, in the long term, even the most skilled punter finds it difficult to generate profits with such margins and because of the variance. Therefore, selecting the right bookmakers for your bets becomes crucially important.
Opting for bookmakers with lower margins will increase the likelihood of making a profit. To maximise your chances even further, it is advisable to register with several bookmakers and systematically select the one offering the highest odds. Reducing the margins will increase your chances of success and your ROI.
Finally, the possibility of playing on what are known as 'exchanges' can also enable you to get round this margin and make the most of your sports betting investments.
Exchanges (such as Betfair or Orbit) are "trading platforms" for sports betting with a rate of return to the player approaching 100%, i.e. zero margin. The platform is paid solely on your winnings, taking a 3% commission on your winning bets.
TIPS FOR PROFITABLE SPORTS BETTING
To achieve long-term profitability and join the 'clan of winning punters', it is imperative to excel at betting or follow the predictions of expert tipsters who can provide lasting value through their betting tips, as Bet2Invest offers.
If possible, sign up to international bookmakers with minimum margins such as Pinnacle, Asian bookmakers or exchanges. Depending on the sports and markets you bet on, Pinnacle and exchanges can reduce your average margin to levels close to or below 2%. Low margins pave the way for potentially higher profits.
At an operational level, betting requires real groundwork for those who consider it a serious investment. A high number of monthly bets is essential to obtain reasonable returns without taking excessive risks. This aspect distinguishes it from investing in shares, where constant buying and selling is not a prerequisite for the success of your portfolio.
Finally, let's talk about liquidity. The world of investment enjoys much greater liquidity than the world of betting. While it is possible to place large bets on major competitions without any problem, this is not the case for many events.
In some cases, an influx of large bets can cause odds to fall as bookmakers reduce them in response to increased demand, making the bet much less 'valuable' than it was a few minutes earlier. Furthermore, in events where the acceptance of liquidity is higher, winning money becomes more difficult due to the increased efficiency of the market.
However, and this is probably where investing in sports betting can become interesting, your ability to invest is much greater in sports betting than in financial investment.
- When you decide to invest, say, €10,000 in the stock market, you make this initial payment and your €10,000 is invested with a variable return depending on your choices.
- In sports betting, if you have €10,000 and you make consistent choices, you can gamble much more than your €10,000 thanks to the immediacy of this market. For example, if you gamble 1% of your capital on each bet at a rate of one bet a day, at the end of the year you will have gambled 3.65 times your initial capital, which means that even if your ROI is lower than that of a stock market investment, your final return can be better thanks to the cumulative bets you have been able to place.
To sum up, although the chances of making money from sports betting seem smaller than from the financial markets because of the bookmakers' margins, betting can be considered as an investment if certain preconditions are met.
Bettors who approach sports betting in a rigorous and professional manner can achieve attractive returns that are sometimes on a par with a traditional stock market investment. However, as with any personal investment, it requires a daily commitment and expertise to be developed.
Rome wasn't built in a day, and neither will your bankroll!
Wednesday, June 28, 2023
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