Capital Appreciation V Dividends?
@Shippers This ☝️perfectly sums up my own FI experience.
First not interested in divs only cap app, then after a few months realizing divs are a great way to earn few quid to help diversify.
Diversification is absolutely key imo, I only have a max 5-7% of any 1 player in my port in cash terms.
@ScouseSte I like the use of capitals to emphasise your point!!!! 💪
@ScouseSte very much so and thats a good spot, hadn't looked at it like that.
@Gregolocky i was the exact same, been here around 9 months and wasnt too worried about divs at first but A. It keeps it interesting and B. Its nice to pick up extra money and it adds up fast.
Just look at them as two variables in a formula that will dictate whether a player is a buy or not at a specific value and time.
All players will have a probability of returning dividends, and a probability of seeing capital appreciation (some may have zero probability playing in non PB league).
Ideally for each player you plan to buy you would want to work out the EV (expected value) over a specific time you plan to hold for.
I guess that is what most of us do intuitively (or even back of a fag packet calc), but I'm expecting more advanced traders on here probably have spreadsheets set up, where they have modelled various scenarios to apply rules consistently, and based on the outcome would drive their decision to buy (and when to sell).
All about diversification.. In strategy if not number of players. This week I'll have made money from ipd, pb, mb and cap ap. Probably weighted 5-10% ipd 10-20% pb 30% mb 40-50% cap ap
All the money earned from divs gets reinvested, so whilst cap ap is the better earner, it's the divs that generate a significant portion of those holds.
I'm not relying on a boom in any area... If cheap players start gainng traction... Great I have a few, and if the top end is losing money its OK as they are returning divs... If my £1 strikers are flatlining...fine I earn ipd for a month and move onto the next.
People are trying to buy players that will win dividends in the future whether it be tomorrow or in three years. The thing is, everybody at some time or another for whatever reason has overestimated the likelihood of a player winning dividends. Some people do it consistently, especially with young players.
These tendencies lead to people knowing that they can make cap app through market trends on players they think may never earn a dividend.
What I’m saying is, is that the likelihood of future dividends and cap app go hand in hand but just gets blown out of all proportion sometimes.
lets face it only a small amount of players (maybe less than 10) actually regularly win MB...
This means something near 80% guaranteed dividends on a handful of players that include say Neymar, Pogba, Salah and perhaps still Messi & Ronaldo but for the odd transfer story that will take one or two weeks out of the 365 day year!!!!
So if you hold for example 80% of the annual MB dividend payers then you are simply BUYING MONEY!!!!
with those guaranteed returns through dividends is guaranteed appreciation over time because other people will see that these players guarantee money so that they will then in theory think "I want a bit of that" and invest thus bumping up the players value further!!!
This is why I think capital appreciation goes in hand with dividend winning players especially those who hog media buzz!!!
I mentioned this few times already. You have to be ahead of others, have a plan/strategy and know how the market is working! 🤔 Yes, diversification is very important on FI,like patience... I'm not arguing here but not always! We have few stage in the season and if you are 'quick' enough and know when to switch your port you'll be on high profit with divs or not!
When ppl was buying for Summer Media Madness and transfer, I bought 'some good' PB players. Yes, I won about £30 from Media Madness (very poor but it wasn't my main target) but my cap app was impressive and I set up port for new season meanwhile !!
How many of you sitting now with players with red colour and wonder what to do, didn't win enough divs cos player A, B, C didn't move or bought player on his peak with some rumours (Dybala) ??
Just look on 3months graph of players like :
Def - Akanji, Tah, Marquinhos, Digne, TAA...
Mid - Brandt, Pjanic, Maddison, Ruiz, Savanier, Demirbay...
Fwd - Lewandowski, Depay, Bamba...
Cap app about 30-50% or even 100%🤓
Ppl expect from 'them' that they will win divs but its not so easy like some ppl think! 🤔
Yes, I hold few of them but to win PB Divs you need something more then just few players in your port! You have to stick with PB Monsters cuz you'll have bigger chance then others (so you need BIG port) , you need good stats( so time is need it to research),knowledge about football/FI and of course LUCK, yes LUCK !!
I'm not playing divs game but I like buying PB players cuz I know that there is 'plenty' divs hunter and they will buy them and keep for whole season (to win divs) even after injury (deep-chance to buy-sell with profit ) , bad performance (deep-chance to buy-sell with profit ) or in red!! Buy before others will do or buy on deep and sell with profit 👍 The same with IPD players (timing is essential so not everyone can plays this strategy). Buy on Monday, sell before game or just after goal/assist. Yes, I'm winning divs only from time to time but that's enough for me 🤓
Everyone is different and have various plan for this game. Different port, strategy and there is plenty factors depend on each other. I choosed cap app and its working for me, some ppl playing divs game with Big Boys cuz they don't have time but want safety return or invested 'massive' amounts of money just for divs... and others just flipping every weekend for fun👍FI is for everyone and there is no right or wrong strategy!
Good luck to everyone 🤓
I spent my first 6 or 7 months messing around with my portfolio. Trying long term and short term trading then cap app or dividends but i was never happy and always felt like i was on the wrong players or missing out on the right. Every time i changed things it felt like the players i was just on are now rising. I always thought i had a diverse port but now i realise i didnt never the less i still did pretty well in those first months.
Now i have a lit more players with smaller holds aimed mostly at the EPL and the other big teams in Europe but every player i hold is a dividend earner or in some cases massive potential to bte one (Sancho). Im earning at least £3 a day in divs which doesnt seem like much but it adds up quickly and im not overly concerned about cap app as long as those dividends keep coming. It took at least 6months for me to build a portfolio im happy with and my level of FOMO is massively reduced.
Imo cap app can be great but involves a lot of luck to get it right, dividends are what we should all be chasing as you are making money as the players price appreciates without having to sell
@Mundek i think we had similar strategies through the summer 👍