I love how positive the forum threads are in general and I appreciate it's in all our interests to portray Football Index as an ever growing source of money but I am creating this thread to solely talk about the risks involved.
I have now invested several thousand pounds and have found myself fighting the urge to invest more, as the risks of investing are not clear. I have racked my head trying to uncover ways in which I may lose a sizeable chunk of my money. Let's be clear, I am not talking about "Neymar breaking his leg" and the such, I am talking about the bigger picture.
What could end football index as a whole, and is there a significant risk that this may occur over the coming months or years?
The three main theories I can muster up are;
- Football Index collapses due to dividend pay outs.
These days most people that invest significant amounts of money have the foresight to invest in the big media buzz players, simply because they provide a safe return. I worry that if these players continue to grow and end up holding a huge proportion of customer investment then FI may run into a cash flow problem with dividends.
If this were to happen then FI would be forced to reduce media dividends and that could result in a crash of player values (or the bubble finally bursting).
The truth is we don't know anything about the profits of FI as a company, which as an investor is very unusual. If you were to look up stocks, for example in Apple, there is information about every aspect of that company from quarterly profits to price/earn ratio etc. FI doesn't even provide a graph to show its history of FOOTIE growth and this lack of information concerns me that if the bubble were about to burst, none of us would know until it were too late.
- Sued by a company or closed down by the government.
Another risk is FI could have its gambling licence removed or sued by another larger company as it enters uncharted territory with its mix of investing + gambling idea.
- Small fish in a big pond.
One of the big boys such as William Hill or Paddy Power etc. could see that FI is turning a profit and decide to release their own version of FI. These companies have millions of customers visiting their sites annually and they could quickly make FI irrelevant.
(Although I believe if this were to occur, those of us following FI closely would have sufficient time to withdraw our money and switch platform before losing significant amounts).
I want to reiterate that I love FI and do not want any of the above to occur but it would be foolish to not consider the risks. What are your thoughts? Are there any other ways in which FI comes crashing down?
PS. If any of the mods are to read this it would be great to have your insight into these matters and hopefully instil some faith in our investments.