In the spirit of Spring Carnival and on the eve of the race that stops the nation, I’ve decided to highlight the similarities between betting on the horses and investing in property. The desired outcome is the same in both to maximise your return.
At risk of offending the semi-pro or professional punters who are readers of our weekly blog, I’m going to suggest that the odds of winning through property are slightly higher than those of creating wealth through punting.
The only way to guarantee a positive result in both would be through owning a future-telling crystal ball and unfortunately, we haven’t found one of those yet. We’d argue that our research has led us to be quite successful in our property and market selection.
So here are a few of the aligning concepts which are considered as research for both when investing in property and when on the punt. But also a few tips on what to consider before placing your bets today.
The Form takes into consideration, past performances over particular distances, in certain weather conditions and across the various racing divisions. This provides an insight into the horses Melbourne Cup winning chances.
The equivalent of understanding the market cycles and what has previously made the market tick. This considers historical trends and the past performance of the market as an indicator for the future.
- Age & Weight
Two key considerations and comparisons which can be made between horses is their age and the weight they’ll be carrying in the race. Weight is determined by the past performances of the horses and is used as a handicap system to ensure the race is evenly contested.
The handicap in property terms can be likened to the effects of external factors within the market. For example, fluctuating interest rates and changes in bank lending. These can either stifle or buoy a property market and provide the handicap needed for a more balanced performance.
- Jockey & Trainer
The training staff and jockey are critical in the race. Being one of the biggest races in terms of number of horses, the jockey plays the most important role in ensuring the horse remains in a good field position without being impeded by others. This ensures it is well-positioned when it approaches the back-end of the race.
Similar to a jockey riding the horse, market drivers such as infrastructure investment and employment growth drive property demand. When money is being spent and jobs are being created, markets are well-placed to achieve some strong price growth.
- Starting gate/barrier
The horses starting gate/barrier can have a significant impact on how it performs on the day. Understanding the barriers and which best suits each horse is very important.
The time in a market is critical. Understanding where a market sits in relation to the property cycle is critical in predicting those which present an opportunity. This can determine the time it takes for the market to begin seeing price growth.
Although the odds are slim, and my form hasn’t been great over the last few years, I’ll still be having a bet on this afternoon’s big race.
My tips for the cup:
- Marmelo: It ran ninth in the Cup last year. Hugh Bowman is the jockey and he’s had some unbelievable success with the legendary Winx, I’m hoping for more of the same.
- The Cliffsofmoher: Overseas this horse beat Yucatan who’s the favourite for the race. The question will be how he goes with the distance. We like an outsider.
Best of luck to all!