I write this post today knowing It’s not going to sit well with a handful of traders. That’s ok, after all, if we all recommended the same strategies, there would be no profit opportunities!
In fact, today isn’t even a post telling you to jump on a player, it’s the opposite. I am listing many different reasons why you should avoid spending your money on the most expensive player on the Index.
Let’s begin with the share price for Messi. £7.91 current share price!
This price is fantastic, if you hold a few thousand futures!
This brings about an issue to new users of the Football Index, or members who are depositing for the first time.
If you open an account with £20, you can afford 2 shares in Lionel Messi. This isn’t really ideal for new members, as they aren’t able to build a worthwhile portfolio.
The title suggest I am anti-messi, but I’m not!
I have held shares in Messi, but cashed these out so that I could focus elsewhere, with his current share price currently so high, there are better ways to spend the money.
You can put the money into building a great looking portfolio, with many different chances of a dividend payout.
The share price of Messi may rise, I am not saying that I actually predict a fall here, but due to the dividend payout available, he wouldn’t be in my plans if i were starting a fresh portfolio.
Lionel Messi will win dividends, in fact he will win a fair few.
He carries Barcelona most of the time, playing in a relatively poor league where the opposition compares to SkyBet Championship.
However, the return on investment will be poor, let me show you an example below, compared with Benzema, who is £1.
Lionel Messi cost – £791 for 100 futures. If he wins on a Treble Day, you will be given dividends of 6p per share (£6). Is it really worth investing almost £800 for a chance of getting £6? I agree, there’s a higher chance that he will win more dividends than the below example, but you do have to question if it’s worthwhile.
If Messi was to win this 5 times, that works out to £30, which still doesn’t cover much of the initial outlay for the player!
The info is also based on Treble Day, he could earn less if a Single or Double Day.
Benzema – Cost: £100 per 100 futures. If he wins on a treble day, you will be given a £6 dividend. This is a complete opposite to Messi, as one dividend payout here gives you back 6% of the players cost!
If Benzema wins this 5 times, thats 30% of the players cost earnt in dividends, at this point you will be in a very profitable situation, as his shares can then also be sold, for more than £1 at this point!
I am also put off by players which are coming to the end of their careers. This may be something of a habit from playing Football Manager! I see younger players as better options here, as you can pick them up cheaper, with less miles on the clock!
Messi has carried Barcelona now for around 10 years, I anticipate he has around 2 years left at the very top of his game, before he loses his golden ability. Personally, I do not want to be holding shares when this happens!
The great thing about this is that we can anticipate the prodigy, my money here is on Dybala & he is my long term hold for this reason.
I believe the price on Messi is inflated, it’s far higher than anyone else on the market.
There are reasons why Messi will be number one on the market, as he is involved in the majority of the build up play for Barca, meaning he is racking up a whole lot of Performance Buzz!
He’s not a player that dominates the media buzz, but players pile into him on the index as they are chasing the dividends.
This is something which has been seen time and time again, I recently saw Januzaj rise 25p per share, for a 6p per share dividend!
The hard end of this, is that once the dividends have been won, the player tends to crash, hard!
I have seen members lose £40+, chasing a £6 payout! (that’s based on per 100 futures held)
Football Index is completely free to use, they make a living by charging a commission on Sales. You will only be charged when you sell a player, this fee is 2% of the sale.
In this example, we will buy 100 shares in Messi and including the 2% fee, see what price Messi would need to reach to make a profit.
Purchase 100 Futures in Messi – £791
If Messi was to rise 9p a share (a good rise), to £800, and we sold him, we would return – £784 after fees, this is a loss!
If Messi rises 19p from £7.91 to £8.10, and we sold him, we would return £794 after fees, only £3 profit.
In my opinion, a near-20p swing in Messi isn’t impossible, but neither is it worth the risk to earn £3 profit!
Just for fun, I tested what would happen if Messi were to break the £9 barrier, after your fees this would return just over £90 Profit.