Investing In Racehorses Is Safer Than Stocks?

There are few more popular ways to invest money than putting funds into the stock exchange. However, it has been argued for many years that investing in the sport of horse racing could be a more effective option for those looking to gain returns on their money.

Getting involved in horse racing is extremely popular for those with wealth, as they will have the money to purchase one of the very best horses from leading bloodlines in the world. However, how does investing on horse racing and the stock exchange differ, and are there any similarities?

How Risky Are Stocks?

Stock exchanges can be very risky investments for those with limited knowledge of the sector that they are placing their trust, as it will typically take a bigger investment to see a life changing return on their money.

There are also huge risks that come with the stock market, as things can change very quickly, and there may be no signs for people to take their money out of their stock. There is clearly no guarantee of a return on your investment when it comes to stocks, as your profit could evaporate should the confidence in a company fall.

However, there are two main ways to take profit from your stock, and these are typically why people get involved in the market. The most popular way is for confidence to gain in a company, which would see their share price increase, meaning that shares can be sold at a higher price.

Meanwhile, companies may sometimes opt to pay out some of their profits to stockholders, meaning that those with shares could pick up a payment of a dividend.

Is Horse Racing Risky?

It could be hard to say that horse racing is a less risky alternative to putting money into stocks, as the sport comes with its own unpredictable nature. This often comes in the form of buying horses at a huge price at the sales. Buyers may feel that they have a safe horse on their hands and a potential bid for Triple Crown glory could be on the cards based on their success over a certain distance.

The biggest factor that is considered before making a racehorse purchase is the bloodline, which could indicate the distance that the horse could travel over, with those with a proven record over longer being preferred among buyers, as they could compete in lucrative races such as the Kentucky Derby and Breeders’ Cup Classic.

However, there is no full-proof plan to finding a horse that will go right to the top, as there are often shortcomings in horses that have a dream pedigree.

This could mean that millions is spent on a runner, and they are then unable to return money in prize winnings from the investment that has been made.

You can learn more about how prizes of wagers and racing odds work here:

Investment Could Return After Retirement

While the vast majority of people buying racehorses will be looking to achieve a return on their investment on track, it could instead be achieved once a horse has been retired. This is especially the case for flat horses, with the best performers typically only running aged two and three, before being retired to stud. There is massive money to be made in breeding racehorses, with some of the best horses in the world being sold at massive fees in this current day.

The most expensive sire in the world is Dubawi, with the 2024 fee showing that the former star is worth £350,000. His stud fee has increased drastically in recent seasons due to the success that his offspring has enjoyed. Dubawi has helped produced multiple Group 1 winners in the forms of Too Darn Hot, Adayar, and Modern Games.

Frankel is another lucrative sire available in the United Kingdom, with his 2024 fee set at £350,000. The legendary star produced 31 stakes winners in Europe in 2023, with a further 23 coming in Britain. He has produced some of the most talented horses in the world across recent seasons, including Breeders; Cup champion Inspiral, and Arc runner-up Westover.

Could Betting Be A Solid Investment?

Aside from owning racehorses, it could be argued that betting on horse racing is also a more solid investment that purchasing stocks. Betting on the sport can be incredibly lucrative, especially if bettors are able to wager on outcomes of races months in advance.

However, bettors looking for life-changing winnings when betting on the racing must do a lot of hard work before making their selections, which includes assessing the latest form of their horse, and assessing the trainers reputation in the biggest races.

It could also be stated that huge sums in terms of payouts will likely only be achieved if a substantial amount of money is put down on a horse, meaning that there is still risk-and-reward matters that should be weighed up before making selections.