Risks associated with investments in thoroughbred horse racing

| September 4, 2019
Managing risk in horse racing
Managing risk is an important part of horse racing investment

There is no denying that owning a racehorse can be one of the most exciting and incredible journeys you will ever go on. However, it is also true that there are a number of different risks that are associated with going on this journey. If you are thinking about investing in a racehorse, it is important to be aware of the different risks. After all, as is the case with any sort of business venture, if you know what the risks are, you will be better placed to determine whether or not this is the right sort of business for you and you will be able to put provisions in place to mitigate the risks too. So, with that being said, continue reading to discover everything you need to know about investing in horse racing.

The risk of owning a horse is that your horse may not actually be very successful! There are a number of different factors that can determine how successful the horse is. Of course, the horse’s talent is the main factor. However, the training regime the horse follows will make a huge difference, as will the races that it is entered into. Plus, as is the case in any sport, injuries can happen and so you could find that you invest in a horse who then suffers an injury, which means it is unable to run for the season, or even worse, indefinitely. This is something that you need to be prepared for. 

It is also important to recognise that owning a horse is an expensive business. This is something that a lot of people underestimate. Not only are you going to front the cost of purchasing the horse (or shares in a horse) but there are a number of other expenses too. Training fees are the most obvious. But, what about the likes of horseshoes? Do you need to pay for these or will your trainer include these in the cost? You then have transport costs, jockey costs, and vet fees too. Other potential costs, depending on where you are located, including licenses, taxes, and insurance. It is important to sit down and work out an accurate estimate of all of the expenses entailed.

One of the things that you can do to mitigate the risks that are associated with owning a racehorse is to look for different revenue streams. Multi channel ecommerce is a prime example. You will be able to establish a website and sell different products and services online. These sales can help to cover the training costs and any of the other expenses associated with owning a horse. 

Hopefully, you now have a better understanding of investing in horse racing and the different risks that this entails. Anyone who has invested in horse racing will tell you that you need to be prepared to lose money. After all, there are no guarantees. Having the right mindset and attitude can make all the difference when it comes to being a successful owner. 

Category: Special interest

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