| What is a realistic return on your sports picks? Unfortunately, most people lose their bankroll because they don’t know the answer to this question. In this article we will help you understand what is a sensible return on your sports picks and investment. Why is this important? This simple answer can be described by two words, financial discipline. Sports bettors who do not practice financial discipline during both the good and bad times end up chasing or losing all their money before they even had the chance to win. What does that mean? To put this in perspective, if you missed the best 40 performing days of the S&P 500 index in the last 10 years (1998-2007), you would have a negative 8.4% return. On the other hand if you stayed the course and kept your money in the S&P 500 index everyday for the past 10 years, you would have a positive 5.9% return
Is it realistic to expect a positive return year after year on your NFL picks, college football picks, NCAA basketball picks, MLB baseball picks, NBA picks and NHL hockey picks? The simple answer is no. The truth is, losing for weeks, months and sometimes in a given year is inevitable whether you are betting on sports or investing in the market. To be successful, we all need to understand and embrace the reality of losing streaks and down markets. Sports bettors who have unrealistic expectations on their NFL picks, college football picks and other sports picks will eventually make poor decisions and lose their bankroll
Lets take for example, the stock market. I have been helping people manage and invest their money for over a decade and I see them make the same mistake over and over. They go to a party and hear stories about their friends earning big returns on their stock portfolio. This gives them the false impression that they should expect the same returns each year. What happens next? You guessed it; they deviate from their investment strategy. They overweight their portfolio in a hot stock or sector of the economy. Eventually as we all know and have painfully experienced recently with the stock crash in the early 2000’s, these hot stocks and sectors are also the most susceptible to a correction in a down market. Sure chasing the hot stocks and sectors might work out for you in the short term but in the long haul it is a recipe for disaster
How does this correlate to sports bettors? Well, the same idea holds true. Sports bettors with unrealistic returns tend to stray from their sports betting strategies by wagering too much on one game. We all want to get rich fast and so it can be very tempting to start chasing the big returns on your NFL picks, college football picks, NCAA basketball picks, NBA basketball picks, MLB baseball picks and NHL hockey picks. We can’t let ourselves succumb to greed. The investment behaviors of people in the late 1990’s are a perfect example of this. People invested their entire nest eggs on one or two stocks. Again, in the short term they were bragging to their friends about their returns, but in the end, they were the ones who lost all of their investments. Don’t let yourself fall into this trap. Stay the course and diversify your bets by spreading them over many different sports picks.
As we all know, streaks happen, both winning and losing. However, it is unrealistic to expect consistent day after day winning on your football picks, basketball picks, baseball picks and hockey picks. In fact there will be losing weeks and months even in a season where you hit 60% winners. The point is, losing streaks happen and when they do, you can’t let yourself get too upset. If you are getting too upset with short-term losses, then you are probably betting too much on your NFL picks, college football picks and other sports picks. You might need to start betting a smaller percentage of your bankroll so that you can stay in the game for the long haul and avoid chasing. Manage your sports betting like you do your investment portfolio. Look at the long term and try not to worry about the short-term losses and fluctuations. The moral of the story is that you need to expect losing streaks so that when they do happen you will have the financial discipline to stay the course.
So what is a reasonable expectation for your return on investments? A realistic win rate for a capper per season is between 50-60%. Generally speaking, if you are risking 110 to win 100, you need to win 55% of the time for the season to show a 5% return. Since most sporting league seasons last about six months, a 5% six-month return is equivalent to a 10% return per year. For comparison, if we look at the historical performance of the S&P 500 over the last 10 years from 1998-2007, you’ll find that the average return is 5.9% per year. |