What is Sports Investing?

Sports investing is a coined term used to describe a methodical, disciplined and long-term approach to sports wagering. The purpose (as with any form of investing) is to maximize profits while diversifying risk and minimizing losses. The general public often perceives “sports betting” as being too risky or speculative and does not associate it with other mainstream investment mediums. The “gambling” element is enough to drive the uneducated individual away. Yet, the same person will gamble (i.e. take a risk in the hope of a favorable outcome) on a particular company’s stock price without knowing a) the company’s financial situation or b) its business model. Regardless, numerous people every year dabble in sports wagering (whether it be on the Super Bowl or during a trip to Las Vegas) with little to no expectation of “winning”. These individuals view sports wagering as a form of entertainment not as an investment opportunity. More serious sports bettors are those who enjoy wagering on a regular basis and have a more complete understanding of sports wagering methods and options (e.g. point spreads, totals, money lines, etc.). None-the-less, the most serious sports bettors seldom view sports wagering as an investment…and, therefore do not take a realistic approach to the risk associated. These individuals often fall into the trap of gambling recklessly either for the “action” or because they are chasing losses…and in most cases, both.

Sports investing is the process by which we analyze (e.g. handicap) each available investment opportunity on a DAILY basis. The goal is to uncover favorable investment options. These are situations in which value can be achieved by taking one potential outcome over another. The basic goal of the odds maker is to put forth a “line” that generates equal action on both sides. However, they are very keen to public perception; therefore, lines generally lean (i.e. shade) towards the public’s favored team (or total) thus presenting value for the other side…although, this is not true in every case. However, the point is that in order to invest in sports correctly we must analyze each situation to determine favorable and/or unfavorable opportunities…so that we are always investing in the most valuable situations. Most sports bettors do not take the time to properly research or prepare for their wagers and ultimately succumb to random chance.

Sports investing involves many variables but can be summarized with the following three principles: 1) money management, 2) dedicated research and 3) a long-term approach. Money management is the key to riding out losing streaks and developing a realistic, monetary approach. Understanding that a certain percentages of your selections will be winners and the other losers helps reduce the natural tendency to chase losses. Dedicated research and a keen understanding of situational match-ups will give us the confidence to invest in the right situations. This does not mean we will be successful in ALL cases, but it does help us weigh and understand the probabilities of a predicted outcome…remember there is no such thing as a “lock”. Keeping a long-term approach fosters consistency and affords us the opportunity to maximize our profits while minimizing our losses through effective diversification.

Keep in mind that sports investing is inherently risky and daily volatility plays a huge role in the predicted outcome of a single event. Partnering with a firm such as The Sports Asylum Consultants, LLC (SAC) can help the long-term investor maintain a realistic and effective approach to sports investing. Through SAC’s dedicated research and consistency, our clients can be confident that the investment selections they receive will present the best value for any given day. This ultimately diversifies our client’s risk while providing the opportunity to grow their profits over the long-term.