Updated: Jun 21, 2020
I live and breathe football. Like most football fanatics out there, I have been known to stay up late on occasions to scout some under-19 talent in a local Chilean derby. I’ve also spent countless hours attempting to lead FC Podillya Khmelnytskyi of the Ukranian Second Tier, and Altrincham FC of the Vanarama National League North, to continental glory on Football Manager computer games. I could almost certainly name the starting line-up of any team in the Slovenian Third Division (Tretja Slovenska Nogometna Liga). So, when I stumbled across an app called ‘Football Index,’ I thought that I might have found an antidote for my football addiction and a platform to take advantage of all my ‘useless’ (to quote my mum) football knowledge…
FOOTBALL INDEX: A WISE INVESTMENT?
If you’ve ever watched a video, you have most likely seen an advert for the ‘Football Index’ app. If not, here it is:
Football Index is a fast-growing application that puts your football knowledge to the test, by allowing you to buy shares in footballers. Effectively, the idea is that the app serves as the Footballing Stock Market, and, if players perform well in real life, their stock will subsequently rise. Thousands of football fans have already invested significant amounts of money in building their ultimate footballing portfolio. However, the question that this blog poses is, “Is Football Index a Wise Investment?”
Firstly, it is imperative to understand how the app works. New users are required to deposit a minimum of £10.00 to get started. However, they are free to add as much money as they would like to their account. Once signed up, users are able to buy shares in some of the world’s top footballers, and add them to their portfolios. The aim, just like any other financial market around the world, is to make profit – to buy players at a low price and then sell them at a premium – capital appreciation. Player prices on the app are similarly dictated by supply and demand.
When players perform well in real life, they can earn match-day dividends. For example, if Jadon Sancho (Borussia Dortmund) scores two goals and gets an assist in a Bundesliga game, his share price is likely to rise, as his current form makes him a more desirable investment to potential investors, and demand for his stock rises. Furthermore, users who have Sancho in their portfolio will have the potential to earn match-day and in-play dividends due to his goals and assist. Likewise, if Gianluigi Donnarumma (AC Milan) keeps a clean sheet, he will also be in consideration to earn match-day and in-play dividends. For a player to earn dividends for his investors, he must be top of the Football Index rankings on a given match-day in his position. I.E., the most highly-ranked goalkeeper, defender, midfielder and attacker from Europe’s Top Five leagues, as well as major European competitions, will be profitable.
Dividend Yield Criteria
These dividends also vary depending on how many matches are played on a certain day. For example, as you can see in the illustration below, if only two matches are played on a certain day, dividends are much lower than days when lots of matches are played across Europe’s top leagues.
Dividend Yield Breakdown
Another interesting method of making positive returns through Football Index is by ‘Media Buzz.’ Each day, the top 200 players on the app are analysed and ranked depending on the amount of media coverage they receive on that day from 25 of the UK’s newspapers and sport publications. The list includes Talksport, UEFA, The FA, ESPN, FIFA, Football League, Daily Mail, Daily Star, The Times, Telegraph, Independent, Express, Guardian, Metro, Daily Mirror, BBC, Football365, Goal.com, Huffington Post and Sky Sports. The more positive a news article is perceived to be about a player, the more Media Buzz points he will earn. The player with the most Media Buzz points per day yields a dividend for his investors.
So, now that you know how the app works and the basic methods of making money, we’ll consider the advantages of investing in Football Index…
This seems fairly self-explanatory, but from hundreds of articles read and hours of research conducted when writing this article, it seemed that many users were able to make large returns in very short periods of time. By encouraging football fans to channel their love for the ‘beautiful game,’ there is evidence to suggest that they can make significant financial gains within days of using the app.
Returns from a Football Index Portfolio can be both quick and easy
2. Multiple Ways to Make Money
Football Index is unlike normal football betting. Normally, a football fan will place a bet on a 17-year old Peruvian to score against his club’s rivals, for a team he’s never watched. In most cases, he’ll lose this bet and the stake is permanently gone. However, with Football Index, if a user adds said 17-year old to his portfolio by buying 50 shares in him, if he doesn’t perform well in one match, he won’t lose all his money like he would with his standard bet. Sure, his portfolio may decline slightly in value, but he doesn’t lose everything, and has the opportunity to wait for the player’s stock price to rise again.
Moreover, with dividends from match-days and Media Buzz, there’s more than one way to make money. It’s not just a case of analysing the market to see which players are undervalued and can be bought on the cheap. It’s also about having players, even if they’re expensive, who are likely to be highly-ranked and perform well in matches and in media articles.
If you’re a football fan who wants the opportunity to make money, but has no knowledge of real financial markets, why not use your football knowledge to make money. Football Index provides those who would otherwise be turned away from investing to make themselves the next Roman Abramovich or Mike Ashley (or maybe not)! It’s also arguably more fun, and gives you greater reason to spend your free time watching Estonian Premier League games.
4. Share Options
Just like real financial markets, you can invest in individual player stocks, or ‘futures.’ However, what is fantastic is that you can also purchase fund-style shares, or ‘trackers.’ If you want to buy shares in all of the Top 100 players for example, you can do this by purchasing a ‘Top 100 Tracker.’ This provides even more choice for users.
5. Isn’t It Everyone’s Dream?
Think ‘Fantasy Football.’ Just like me, you’ve probably spent many an hour trying to create your ultimate team of players who will perform well over the season, to earn virtual pride and glory among your friends and colleagues. Now, combine that with the stock market. Instead of playing Fantasy Football, or football simulation games such as Football Manager and Fifa Ultimate Team/Career Mode just for fun, you can now combine your hobby with the possibility of making money. There’s no better combination!
But, just like most things, there are, of course, some shortcoming of Football Index. Below are a couple of them…
Low Dividend Yield
Picture this: You’ve invested £100 in Lionel Messi shares. He’s playing CD Leganes in La Liga, and of course, he’s scored three goals and assisted a further two, because, well, CD Leganes just aren’t very good (and Messi is). Naturally, you’re ecstatic, because Messi is odds-on favourite to be Football Index’s ‘Star Player,’ and you’re going to earn a dividend for his stellar performance. Unfortunately, however, you load up the application on your phone to see that the dividend you receive from your initial £100 investment in Messi is about £0.08p. This is the reality of Football Index. It’s quite difficult to guess who’s going to be bringing in the money on a given match-day, and, when they do, the amount is minimal. Dividends are very low and so users need to purchase a lot of shares in a player to make significant returns. This means that there are high barriers to entry, and a large initial deposit is required if you want to become the Warren Buffet of the Footballing Index
2. Limited Choice
There is no denying that the Football Index market is large. There are over 3,000 players in its database, and this number is continually growing. However, when comparing this to real financial markets, the figure is extremely low. It is estimated that there are more than 630,000 stocks that are publicly traded worldwide. In fact, there are upwards of 65,000 professional football players around the world, so 3,000 seems like a very small fraction of this. In practical terms, it means that, if you’ve been following Croatian outfit Dinamo Zagreb, while trying to identify the next Luka Modric or Mateo Kovacic, you probably can’t invest in them on Football Index and watch them develop into elite players as the database is too limited. Having said this, I’m sure that, with time, the database will only continue to grow.
3. Too Expensive?
Microsoft is considered one of the best stocks to buy in the world. It has performed exceptionally over the last decade. Its share price currently stands at $133 USD. For near enough the same price, you can invest in the Football Index Top 25 Player Tracker. Maybe I’m being cynical, but personally, I’m not sure if Football Index represents good enough value for money. After all, would you rather own a small slice of one of the most successful companies in the world, or a small slice of a *virtual* version of the Algerian striker, Islam Slimani. I know which one I’d prefer!
4. Commission Charges
Every future sold by a user incurs a 2% commission charge that is sent directly to the Football Index bank account. Many standard trading platforms are commission-free, which seems to be the way forward. However, users may not see this necessarily as a shortcoming of the app – instead, it allows them to formulate a long-term strategy. If taking an active market position and constantly buying/selling players is going to incur a 2% cost with each transaction, they may as well go low-risk with long-term investments and watch them grow.
You can sell a share whenever you want on Football Index
Just as English player prices are inflated in the real transfer market, where £20 million can just about buy you Tyrone Mings or Jordan Ibe, English players are equally expensive on Football Index, making it more difficult/pricey to heavily invest in their stock. However, there is also a significant bias towards them on the app, because the 25 media outlets that constitute the Media Buzz are all UK-based. Therefore, bar Lionel Messi, Cristiano Ronaldo, and Neymar, it doesn’t seem plausible to include non-UK based players in your portfolio, because they are unlikely to earn Media Buzz dividends.
For football-minded people such as myself, Football Index is a wise investment. Combining football with FTSE, it is a fantastic platform to learn the fundamentals of investing, but with a twist. There are some drawbacks, but none that would stop me necessarily giving this application a trial, and I’m excited to see where my football knowledge can take me. I’ll certainly be giving it a go, and, with a £1,000 Money-Back Guarantee offer (any losses within the first month of downloading the app, up to £1,000, will be fully refunded to the user), there is no better time to get started than now! It has excellent reviews on websites such as TrustPilot, and the support of leading figures in the footballing world. The only pitfall that worries me is the high start-up cost required to make significant profit, but I’m certain that the developers are working on ways to make the app more accessible to those on a lower budget.
All in all, if you’re into football and investing, like myself, give Football Index a go. I’d love to know how you get on!
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Disclaimer: Please note that this is not intended to be financial advice, nor do I ever give financial advice, and any decisions you make are at your own risk should you decide to invest.