There are many ways to make money on Football Index, especially as we are still in a growth stage. In the last year I have tried to identify as many as possible and then try them out so to better understand which strategies I both enjoy and have a good grasp of.
I am a strong believer that every trader is unique. To find a suitable strategy, there are lots of variables to consider and what may be optimal for one trader doesn’t make it universally the ‘right’ or ‘best’ strategy.
I’ve whittled the key variables down to:
Time - ability to trade regularly or not, put in the research hours, follow/watch games, keep track of injuries and transfers etc.
Budget – I believe a small amount of capital means you can have more of your money working for you on ‘active’ trades. You can be liquid and move fluidly between trends, cycles, peaks and dips. With a bigger budget you may need to spread the money more, or risk owning too much of the profit margin on a player or becoming illiquid by having too many shares to shift
Risk appetite – all of the opportunities come with an element of risk be it timing, judgement, cost etc. I believe when forming a strategy it’s key to understand your own risk appetite and what the worst case scenario of your buy looks like. If you can’t handle the worst case… probably avoid the trade.
Self-assessment – probably the hardest to gauge but you should try some form of self-assessment. It’s one thing to decide which strategy you believe is optimal, but another to implement it successfully. Find out what sort of trader you are, what are you good at? A key part of that is enjoyment. If you use a strategy you don’t enjoy… you risk boredom (which can be a real profit killer… idle thumbs!)
Where do I fit on this spectrum?
Time - I have a lot of free time, as a consultant there is a lot of time spent commuting and in hotels and days where I just have an hours meeting!
Budget - I tend to sit between £40,000-£100,000 port at various times of the season this shrinks and bloats.
Risk – if anyone were to look at my port they’d say it’s high risk. However, I set very strict limits on how low a player will drop before I sell them. So whilst the capital in them is high, I am only ever willing to see a small amount of the capital lost.
Self-assessment … in progress! I enjoy matchdays and the buzz of having players in with a shot of PB. However, weekends are the time I spend with family, so I have to minimalize having too much riding on matchday football. I am not very patient, partly to do with the risk mentioned above, so whilst I enjoy finding undervalued assets – I know I don’t have the patience to wait for the market to come to me all the time.
What does my portfolio look like?
Typically I would choose the premium player I have the most faith in to return frequent dividends. Historically i.e. over media madness in summer I had around £30k in Pogba and Neymar. During last season, it was Messi for PB. I would try to compound my dividend winnings by buying cheap IPD players during the season, or ‘the next’ transfer story in summer.
Alongside one or two strong premium holds, I try to identify and hold a couple of youths for Cap Ap. Greengoat and Brewdog last season.
I have a large pot of money for active trading. I trade a lot on instinct not data – I look for ‘events’ on the horizon. Maybe fixtures, or anticipating an announcement, someone taking over set pieces, coming back from injury, transfer news.
I weigh up two things when thinking of the events:
1) Does the upside (of a positive event occurring) outweigh the downside (of it not occurring)?
2) Do I believe the likelihood of the positive outcome outweighs the likelihood of the negative outcome?
If the answer to both is yes… this is a good value bet for me.
My current portfolio/strategy
This season I have had less faith in the historical premium players (MB opening up really made me reconsider my strategy) and I have been slow to react (or disbelieving of) to new premiums. As well as a lot of risk associated with them in FI current climate.
We know MB is changing in summer, there is a lot of grumbling about the PB matrix, and for certain others it’s age or position changes hanging over their head. I will wait for the market to settle down before I commit big in the top end again.
So at the moment I have a ‘shrunk port’ sitting at £40k dispersed over 14 players. Most are ‘event’ based, primarily Euros, and a few good youths I am topping up on during a dip, having bought during a recent youth boom.