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The second wave of coronavirus seems to be very dangerous as it has badly hit the Indian economy. With new cases rising every day, state governments immediately came into action and imposed strict restrictions to curb the resurgence.
Although the curb is weaker than last year's pandemic, it somehow has started to affect several business activities.
Like last, the second wave of COVID 19 would heavily impact India’s Gross Domestic Product (GDP) growth in the coming months.
If we talk about business activities and the economy then the Indian stock market is also not untouched by this.
However, pessimism hasn't come up with the equity trading market so far. If you look at the last two month’s data, you will get to know that the NIFTY50 gets down by only 7% from its all-time high of 15,431.75.
Then what's the reason behind the market afloat?
Despite the critical situation across the country, analysts point towards the two factors that still maintain complacency in the stock market.
Several traders and expert analysts said that the global peers are doing well and that's the reason the Indian stock market trading is also performing well.
In other words, Global equity markets in the US have been in a good condition which is the main reason behind the drifts of the Indian stock market, The S&P 500, Dow Jones index touched an up of 4,195 and 34,200, this month.
It clearly shows that global equity markets are performing outstanding well and that makes a positive rub off on Indian equity markets as well.
As of now, we have not experienced a major decline in Indian equities despite having one of the highest infection rates in India - said Mr Sanjay Mookim, Research Head, JP Morgan Chase.
Besides, the hindsight of Indian investors makes the equity market more stable than before. The second wave reminds them of the mistakes they made in last year’s pandemic.
Therefore, they clearly say, even if the index goes down, they also go up. Also, last year, many fund managers made a huge mistake by selling a majority of stocks, this year they wouldn't.
Also, we have seen the equity market has bounced back from its position and hence the aggressive selling has not been done by many people, this time, Majoom said.
Naveen Kulkarni, CEO at Axis Securities Ltd, stated that “Prior experience shows how the stock market made a massive comeback post last year’s pandemic and therefore we don’t expect investors to offload equities hugely this year. This is because as the vaccination picks up the pace, the curve will flatten.
When a nationwide lockdown was announced in March 2020, the Nify50 went down by 13%. After 1 year, shares have grown up by double or sometimes even thrice. A recent analysis done by Mint report, in Nifty500 index, the stocks have shown the growth of more than 50% than last year and 247 stock’s price goes up by more than 100%, which is unbelievable and beyond the expectations of Indian investors.
Besides, the positive factors by global markets, RBI also put its eye on the Indian stock market. The monetary policy members of RBI still get worried about the economic growth. They are not in a favor of complete lockdown in the country.
Experiencing the rising cases of Covid positive, FIIs have sold equities worth $934 million so far this month.
Analysts suggest that your portfolio along with asset allocation tells your gain and loss. If you put loads of equity stocks in your portfolio, then it can also be quite risky as the stock market is seeing a bit of a downward trend. Therefore, it is suggested to add some growth stocks to your portfolio as it will minimize your risks.
While the second wave of COVID poses challenges to the ongoing economic recovery, consumers and businesses have adapted to the new normal, and lockdowns are likely to be localised; hence, we do not expect this wave to derail the economy. Therefore, we don't expect any significant impact on aggregate earnings.
Amidst this second wave of the pandemic, some stocks are still performing exceptionally well. Here is a list of stocks to Bet Upon:
1. Divis Laboratories
Divis Laboratories is considered one of the leading manufacturers of Active Pharmaceutical ingredients (API) in the world. As per the reports, the company’s growth looks promising due to the diversification from China into other countries including India.
As many global players try to minimize the dependencies on China and prefer In dia, companies like Divis Laboratories remained well placed to capitalise on such opportunities.
Also, the company announced the construction of the Divis Unit-III Facility at Kakinada, East Godavari District, Andhra Pradesh.
2. CDSL
CDSL stands for Central Depository Service Limited. The company facilitates the transaction and holdings of securities in Demat form and settlement of trade which are executed on a stock exchange.
Other services include KYC services in respect of investors to capital market intermediaries, holding insurance policies in electronic form and other online services such as e-Locker, e-voting etc.
If we talk about the market share of CDSL, it has witnessed a massive growth from 14% in FY14 to 51% in FY2020 in the market share.
3. Dr. Reddy’s Laboratories
We can't ignore the performance of Dr Reddy’s Laboratories. Amidst the pandemic, the company has managed to generate revenue of Rs 4,930 Cr in FY21 which is up by 12%.
4. HDFC Bank
The bank’s strong fundamentals with good quarter to quarter growth makes HDFC one of the best choices among Indian retail investors. The company’s operating profit goes up by 22.83 per cent. Good revenues (up 29.10 %) and the approaching summer seasons are the good factors of this stock.
The company gave a strong performance, with its operating profit going up by 22.83% whereas the revenues (29.10%) and profit (22.35%) also showed a positive side.
Volta's growth in FY21 is also fascinating. Its operating profit (53.44% up), revenue (22.14% Up), gross profit (up 22.35%) and a reduction of interest expense make this stock is one of the highest-value stocks in the Indian stock market.
Investing wisely is key to building wealth over time, but one common question that many investors have is: "When is the best time to invest?" Understanding market timing can help you make informed decisions and potentially enhance your investment returns. In this blog, we'll break down what market timing is, why it's important, and how you can approach it in a simple and straightforward way.
Market timing refers to the strategy of making investment decisions based on predicting the future movements of the market. The goal is to buy low and sell high, or to avoid buying when you expect the market to fall. Essentially, it's about finding the optimal times to enter or exit investments to maximize profits or minimize losses.
While market timing sounds appealing, it comes with significant challenges:
While perfect market timing is elusive, you can use several strategies to improve your investment decisions:
The best time to invest is not about pinpointing the perfect moment but about adopting a strategic approach that aligns with your financial goals and risk tolerance. While market timing can offer potential benefits, it also comes with challenges and risks. By focusing on long-term investing, dollar-cost averaging, and keeping up-to-date, you can make more insightful decisions and improve your chances of achieving your investment goals. Remember, successful investing is often more about strategy and discipline than trying to time the market perfectly.
Last year we faced a pandemic that was very difficult to comprehend not just for individuals, but also for the overall economy.
Now, even if the second wave of a pandemic is still on the rise, the S&P BSE Midcap Index has outperformed the benchmark S&P BSE Sensex Index in the last five months since the end of 2019.
If we compare the performance of mid-cap stocks to last year, we will get to know that these companies had suffered a lot in 2019 but today, we don't see a major change in these stock’s prices.
In fact, the outperformance of India’s mid-cap stocks over their larger peers may take a deep breather, as per the new investors. In the fiscal year 2021, the BSE midcap index rose 91% as India’s market capitalization rose up to Rs91 trillion in a year and hence we can predict that the BSE Sensex Index has outperformed the Sensex post end of the pandemic; according to Bloomberg data.
Even the smaller stock of mid-cap companies has gained approximately 33% in a short period, which is more than double according to the set benchmark.
As the mid-cap stocks outperformed the large-cap stocks in 2020, this year the experts predict that these stocks may hit a pause because of the second surge of COVID 19 infections across the country.
Due to the sudden pandemic, many investors are seeking large-cap stocks, especially in Bank stocks. In the current situation, everyone wants to play safe and therefore, investors find large-cap stocks (primarily bank stocks) are the safest options to invest in.
Mid-cap stocks may take a pause for some time but the performance depends a lot on the pace of vaccination. Last week, the Indian government announced that the vaccines will be available for everyone ranging over the age of 18, applicable from May 1.
As of now, India has vaccinated over 13 crore vaccinated doses and by doing this, the country becomes one of the fastest nations to vaccinate many people within a short span of time.
Earlier, investors used to be attracted towards mid-cap stocks as these stocks were relatively cheaper than other stocks, but that’s not the condition anymore. Nowadays, large companies are better equipped to handle crises and therefore these stocks are becoming the top priority of investors.
Mid-cap companies in India are those who have a market capitalization of Rs 5k Crore and less than Rs 20k Crore. These companies come under the top 100 companies that are listed on the stock exchanges (BSE and NSE). If we compare mid-cap stocks with the small caps, you will find out that the mid-cap stocks come with a moderate risk as compared to small-cap stocks. The risks of these stocks are comparatively higher than large-cap stocks.
Another advantage of applying for mid-cap stocks is that these stocks offer an opportunity for growth and in future, these stocks perform well with outstanding returns than large-cap stocks.
Mid-cap stocks are mainly responsible for boosting up the market share and profitability.
According to the present situation, the markets are in rallied mode, and when such things happen, investors are generally inclined towards large-caps, however, after the crash of 2020, investors have started to channelize their portfolio into mid-cap and small-cap stocks.
The primary factor that worked in the favor of mid-cap stocks is its low-interest regime that has been controlled by the Reserve Bank of India. Because of the low-interest rates, the capacity of taking risk appetite increases, which makes investors invest more in mid-cap stocks than other stocks.
Experts see a strong connection between the midcap index and repo rates. High liquidity and moderate risks are the major factors that contribute to the mid-cap rally.
A brokerage house says, whenever there is a disturbance, it has been followed by outperformance in mid-cap and small-cap indices. The same trend has been noticed in 2009, 2016, and 2017. This year: in March 2021, the Midcap Index outperformed both the Nifty Small-Cap and Nifty 50 indices.
If we see the performance of the Nifty Midcap index over the others, then last year, the Nifty mid-cap index bounced back by over 70 percent post-pandemic. However, Smallcap indices gained 19% in 2020.
As the second wave of infections is still on the rise, the major indices of India Sensex and Nifty have seen some contraction this month. On April 20, Sensex fell 10 percent, after maintaining an all-time high of 52k levels in February. The Nifty has also gone down by 6% to 14,296 levels on April 20, after witnessing a peak of 15k levels.
Looking at the current scenario, investors are moving towards large-cap stocks considering it as the safest option to invest at this time.
However, the movement of investors toward large-cap stocks is temporary, they are doing this only because of market volatility. Once the market returns to its original pace, investors will prefer mid-cap stocks over long-term stocks.
The ease of availability of vaccines, and economic recovery are some of the factors that may decide the market way; which way the stock market will move in the future.
According to the credit rating agency, Moody, the second wave will definitely hurt the economy which may affect the country’s future growth, however, the agency has also stated that the economy will grow in the double digits after a few months.
If the second wave curbs quickly and the economic resurgence gets started then mid-cap stocks will become the investor’s first choice over large-cap stocks. In 2020, when the stock market fell, the market saw a big bull which extended up to 2021.
Due to the unpredictability of the stock market, mid-cap stocks too had an unbeaten run. Although the mid-cap market sees a slower pace in the market, they will rise once the market regains and all things come at a normal pace.
Over the past few years, many global technologies and fund houses have started giving you an option to invest in them. One such asset company is Mirae Asset, which is all set to open an NFO among the people of India.
Mirae Asset Investment Managers India announced the launch of two NFO (New Fund Offer) - Mirae Asset NYSE FAANG + ETF and NYSE; an open-ended fund of fund scheme mainly investing in Mirae Asset NYSE FANG + ETF. According to the news, the NFO is open for subscription between 19 April to 3 May 2021.
The house is offering you a fund of funds (FOF) route to invest directly in ETF schemes.
Exchange-Traded Funds or ETF’s are one of the types of investment funds that are traded on the stock exchange.
ETF’s are quite similar to mutual funds except one that ETF’s can be bought and sold throughout the day on the stock exchanges just like stocks while mutual funds are bought and sold based on their price at the end of the day.
A FOF or funds of the fund is nothing but a mutual fund scheme that allows investors to invest in the units of other funds. For instance, the Mirae Asset NYSE FAANG + ETF is a fund of funds that will invest in the units of Mirae Asset NYSE FAANG + ETF.
Here the NYSE FANG Plus Index (NFPI) will come into play. This is because NFPI will provide exposure to today’s highly traded top 10 tech giants in the world which are listed overseas. These tech companies include Facebook, Apple, Amazon, Netflix, Google, Tesla, Twitter, Alibaba, Baidu and NVIDIA.
You might have heard the popular acronym FAANG which stands for Facebook, Apple, Amazon, Netflix and Google (Alphabet Inc). Now, the FAANG word has spread as the five other stocks have been added to it.
Needless to say, these tech giants are extremely popular all over the world as they offer bountiful services that are used by millions of people across the world.
Therefore, if these businesses are put together in one portfolio, they offer a large number of profits as they have the ability to grow in the different geographies of the world.
If we talk about the past data, we get a detailed insight into NFPI as the index has managed to deliver 33.41% annualized returns between September 2014 and March 2021. The percentage amount is quite large if we compare it to NASDAQ - 100 which has given a 20.77% return between the same years, and 13.23% for the S&P 500 said by the reports of ICE Data Indices.
The fund offers exposures to the top industry leaders in their respective segments, which is a plus point for every individual. This is because investing your money in these companies can minimize the chance of risks associated with the business. These businesses hold minimum risks as most of the businesses present in this index are known for their innovations.
Since these companies are not listed in Indian stock exchanges, a FOF can act as a good way to invest in these established technology sector leaders. Also, including these stocks may create a beautiful diversification to your portfolio.
The addition of the top 10 tech companies into the index makes it highly concentrated. This means investors who saw a dream to invest in this index may be exposed to concentration risk. Stock market is full of volatility and hence it would be beneficial for you to be aware of the downward volatility.
Secondly, these businesses face numerous regulatory changes in many countries which may affect the stock’s price. Also, these companies often face several acquisitions by the policymakers of different countries which could lead to huge risks and downward volatility.
The subscription date for both funds starts on April 19, 2021, while the closing dates are different. The closing date of FAANg +ETF is on April 30, 2021, whereas the closing date of FAANG +ETF fund of funds is on May 3, 2021.
The Mirae Asset FAANG+ETF will be handled by Mr Siddharth Srivastava while the Mirae Asset FAANG+ETF FOF will be handled by Ms Ekta Gala.
The minimum investment amount required by both the schemes will be Rs 5000 and multiples of Re 1.
The Mirae Asset FAANG+ETF FOF will offer investors multiple options such as regular plan and direct plan.
Each stock’s weightage in NYSE FAANG+ Index is equally weighted that consists of highly traded growth stocks.
The NYSE FAANG+Index will allow Indian stock trading investors to invest in these potential stocks like Facebook, Apple, Amazon, Google, Tesla, Twitter, Netflix etc.
It may be noted that 7 out of 10 companies in the NYSE FAANG+ Index have made it a list of top 50 innovative companies with exceptionally well innovative ideas.
The Number of Funds managed by Ms Ekta Gala is mentioned below:
Mirae Asset NIFTY 50 ETF
Mirae Asset NIFTY Next 50 ETF
Mirae Asset ECG Sector Leader ETF
Mirae Asset ECG Sector Leader FOF
Mr Siddharth Srivastava, fund manager of Mirae Asset NYSE FANG+ETF said: this index gives Indian investors a new way to put their money in these highly brilliant, growth innovative companies. Through these investments, Indian investors now can invest a small part of their money into these shares and participate in the growth stories of these companies.
It has been seen that many FIIs and global investors have put their eyes on Indian stock market and investors. Many top market gainers have been constantly researching on Indian stock exchange and analyzing the pattern of the stock market.
By doing this, most of them have started to invest in the Indian stock market. Also, they want many retail investors to contribute to the top-notch stocks.
Therefore, they came with the idea of ETFs and added FAANG stocks with ETFs so that many Indian investors can benefit from these stocks.
The primary objective of these companies behind the diversification of these stocks among different geographical areas is the expansion of shares among different retailers and investors so that they can evenly contribute towards the growth of these top giants.
As far as the doubling of money is concerned, penny stocks come second to none. This is because such stocks present a wide range of opportunities for new investors as well as experienced both.
And when it comes to investing in money, investors often seek mid-cap and large-cap stocks, however, the majority of them neglect penny stocks.
Penny stocks are small stocks and come under the small-cap category. If you are a regular trader or investor, you must have heard the term penny stocks. Well, these are small-cap stocks that attract minimal pricing. According to the Indian stock market trading scenario, stocks whose market capitalization is less than Rs 10, comes under penny stocks.
Due to low market capitalization, these stocks seem alluring to many investors as these shares are available at low price and investors would purchase more shares with low investment amounts.
Another important reason behind the strong hype of penny stocks is, they have a low frequency of trading, their prices are subjected to sudden and high levels of volatility.
Let’s understand penny stocks with a suitable example:
A company XYZ Limited has a share price of Rs 500 and a penny stock to be Rs 5. If an investor has a capital of Rs 10,000, they would be able to buy only 20 shares of the established company. With the same capital amount, they can purchase the penny stocks of 2000 shares.
If you are new to the stock market, then penny stocks can act as a good choice for you. This is because penny stocks enable you to learn the ins and outs of trading first hand, i.e stock market learning. Since the price of penny stocks are low, investors purchase a high volume of penny stocks with a limited capital amount. This also helps investors to minimize their losses.
Penny stocks are not traded in the share market frequently. Due to a low volume of trades, investors may find it difficult to find both buyers and sellers. However, they can overcome this limitation to a certain extent by holding the shares of penny stocks for the long term.
Penny stocks are easy to trade and therefore many investors especially newbies find it easy to trade in the stock market. Price movement of penny stocks are speculative and require very less methodical technical analysis. This makes investors the perfect choice for you if you are just making an entry into the world of the stock market.
There are multiple companies with good financials and growth potential that are being traded for pennies. By identifying these companies, investors can generate good returns and watch their investments grow.
Penny stocks can be considered as a miss or hit opportunity. Companies issuing them might grow into large organizations and give a higher yield than average returns.
Some of these stocks can turn out to be multi-bagger stocks. This means some penny stocks can generate returns of more than 100 per cent against their investment amount. And, if some penny stocks give a return ten times its investment value then it is considered a ten-bagger.
Hence, if investors could include these stocks in their portfolio, these stocks could exponentially increase their returns and have a large chance to outperform mid-cap and large-cap funds.
To find out the best penny stocks which have the potential to be multi-baggers, investors need to go through thorough stock market research.
Let’s understand it with an example:
Suppose Mr X invested Rs 10,000 in penny stocks of ABC Pvt company. Each unit cost is Rs 10. The company did well in the market as its performance rose by a huge margin and its stock value reached up to Rs 100. If Mr.X sold its 1000 shares at Rs 1,00,000. I.e (10,000/10=1000, Rs 1000*100=Rs 1,00,000) hence this stock gains ten times a return. Such stocks are considered as a ten-bagger stock.
As we said above, these stocks are cheaper than other stocks and hence you can easily do share trading and invest in them without taking any risk of losing huge amounts of your investment finances.
Therefore, if they fill a small portion of penny stocks into their portfolio, chances are investors creating room for better investment options while minimizing the risk associated with it.
As these stocks heavily depend on the market condition for the growth in their stock’s intrinsic value, they are associated with high risk.
Apart from the fundamental risks linked with the stock market, these stocks also come with other types of risks which can’t be neglected.
The companies that mostly issue penny stocks are startups. These companies freshly come into the stock market for fundraising and needless to say, there are a lot of insecurities associated with these stocks such as lack of information on the past performance, financial soundness, growth prospects of such stocks.
Therefore, it is suggested to do complete research before investing in penny stocks. Also, there are several stock market courses available on the internet. You can take a wide range of knowledge from there.
If you look at the financial history, you might have heard that penny stock scams are very common in the international stock market. One such popular method is pump and dump. Under the pump and dump method, investors with an intention of scamming, purchase a huge amount of penny stocks. Such hype attracts new investors to purchase these stocks.
Once the company realizes that they have enough buyers who have invested in their stocks, the speculator immediately reduces the value of these stocks resulting in the losses of new investors.
Apart from investing in penny stocks, investors nowadays seek out new investment options that are suited to their portfolio and risk appetite both.
Mutual funds are one of the best investment options investors are gaining interest in. Mutual funds are a professionally managed investment scheme that pools money from numerous investors and invests this money in securities such as stocks, bonds, and debts.
While penny stocks seem an attractive investment option for many investors because of their low pricing, they do carry risks like other equity shares. The price movement of such stocks heavily depends on the market condition which makes penny stocks highly risky. However, these risks can be mitigated if you do complete research about these stocks before investing.
Well, if you need the right investment advice regarding any stocks and mutual funds, you may consider Swastika as the best stock trading platform for beginners and experienced both. The stock broking company comes with user-friendly online trading platforms at affordable brokerage rates.
Recently, fantasy sports has become the talk in the world of virtual gaming. This is because playing fantasy games is one of the most popular hobbies of sports fans around the world. There are people who love to play virtual gaming while there are other people who have no clue about it.
It is currentlyIn recent years, fantasy sports have gained massive popularity, with millions of people participating globally. The excitement of creating virtual teams and earning rewards based on real-life performances of athletes makes it appealing to sports enthusiasts. Given its growth, you might think that investing in the fantasy sports business is a great idea. However, despite its rapid expansion, investing in fantasy sports comes with significant risks that make it a less-than-ideal option.
In this blog, we will explore why fantasy sports businesses might not be the best choice for investment, focusing on market uncertainties, regulatory challenges, financial risks, and ethical concerns.
One of the biggest challenges the fantasy sports industry faces is regulatory uncertainty. Fantasy sports often operate in a grey area of the law, particularly when it comes to gambling regulations. In many countries, fantasy sports are still under scrutiny, with debates about whether they should be classified as a game of skill or a form of gambling.
This legal ambiguity can lead to sudden changes in regulations, making it difficult for companies to operate smoothly. Governments can impose restrictions or even ban fantasy sports platforms, which can cause significant financial losses for investors. For example, countries like India have state-specific laws that either allow or restrict fantasy sports, adding to the complexity for businesses and investors alike.
The fantasy sports market has become highly competitive. Several major platforms dominate the industry, making it difficult for new or smaller businesses to gain a foothold. These established companies have massive marketing budgets and user bases, creating significant barriers to entry for new businesses.
For investors, this means that entering the market is risky because the chances of competing successfully with these big players are slim. With established platforms like DraftKings and Dream11 already capturing a large share of the market, new entrants face an uphill battle for visibility and user acquisition.
Attracting and retaining users in the fantasy sports market can be very expensive. Companies often spend large sums on marketing, advertising, and promotions to build their user base. The cost of acquiring a single customer can be high, and many users tend to participate in fantasy sports only for a short period.
This high user acquisition cost means that businesses need a large volume of users to stay profitable. However, given the intense competition and the short lifespan of customer engagement, maintaining profitability can be difficult. For investors, this presents a significant financial risk, as it requires a continuous flow of capital to sustain growth.
Fantasy sports businesses typically rely on user participation fees or advertising for revenue. However, the revenue model is not always consistent, as it depends heavily on user engagement and the overall interest in sports. For example, if a popular sports league experiences a decline in viewership or faces disruptions (like during the COVID-19 pandemic), fantasy sports platforms could see a significant drop in participation.
Moreover, many users are not willing to pay large sums to participate in fantasy sports. This makes it challenging for platforms to generate consistent revenue without offering substantial prizes or incentives, which can further reduce profitability.
Fantasy sports, especially those that involve betting or monetary rewards, can lead to addictive behavior. Many users get hooked on the thrill of winning and end up spending more money than they can afford. This can lead to financial problems for users and raise ethical concerns for businesses that profit from this behavior.
From an investor’s perspective, supporting a business model that may contribute to addictive behavior and financial hardship for users can be ethically problematic. Negative publicity around addiction and financial irresponsibility can harm the brand’s reputation and reduce the platform’s long-term success.
Fantasy sports platforms are heavily dependent on technology, including mobile apps, data feeds, and online payment systems. Any disruption in these technologies can negatively impact the user experience and lead to financial losses. For example, if a platform’s data feed (which provides real-time sports data) malfunctions or experiences delays, it could cause frustration for users and damage the platform’s credibility.
Additionally, cybersecurity threats are a real concern in the digital space. If a platform is hacked or experiences data breaches, it could result in legal liabilities, loss of user trust, and financial losses for the business and its investors.
Fantasy sports participation often depends on the schedules of major sports leagues. This makes the business highly seasonal. For example, fantasy football platforms see a spike in activity during the football season but may experience a significant decline in user engagement during the offseason.
This seasonality means that businesses and investors cannot rely on steady year-round revenue, which makes it harder to maintain consistent cash flow. The fluctuating nature of user engagement adds to the risk for investors, as businesses may struggle to stay afloat during off-peak periods.
Although many fantasy sports companies argue that their games are based on skill, the lines between fantasy sports and gambling are often blurred. Some countries and states view fantasy sports as a form of gambling, subjecting these platforms to stringent regulations or outright bans.
Investors in these businesses face potential legal risks if the fantasy sports industry is reclassified as gambling in their region. Legal battles and compliance costs can significantly impact the business’s profitability and reputation, further increasing the risks involved in investing in this space.
While the fantasy sports industry may seem like a lucrative opportunity given its rapid growth, it comes with a host of risks that make it less than ideal for investors. Regulatory uncertainty, high competition, costly user acquisition, and ethical concerns are just a few of the challenges that can make this industry a risky bet.
For investors, it’s crucial to carefully consider these risks and explore alternative sectors with more stable revenue models and fewer legal and ethical complications. If you’re looking for safer, more predictable investment opportunities, the fantasy sports business might not be the right choice for your portfolio.
estimated that more than 75 million people will participate in fantasy sports this year, and that number is only going to continue to grow in the future. While fantasy sports or virtual gaming is a great way to spend your free time, there are also some issues with this popular activity.
Well, today, we are going to remove all your doubts about fantasy cricket and we will also try to provide a brief of the risks associated with it.
People nowadays show a great interest in fantasy sports as they find it a great way to stay close with their friends. Also, they find it a great chance of winning money without putting in any effort.
Well, the bitter truth is that these gaming sports are not reliable. Fantasy sports is a part of gambling that can become very addictive if you are not careful. Using your sports knowledge to win money is a huge rush which makes people get addicted to it.
If someone, even if he has adequate knowledge about a sport let's say cricket, there are huge chances that he/she may lose money.
Now, many sports-loving persons find it hard to digest the fact that fantasy sport is gambling. They consider these sports as a game of skills not a game of chance. However, this is not so true. Firstly, try to understand the terms investment and gambling.
We heard many people saying they don’t put their money in share or mutual funds as they don’t like to gamble. However, investing and gambling are two different things.
Gamblers are those who do anything for the winning amount; they are not afraid of taking risks and eventually lose all the money and go empty-handed. Investors, on the other hand, is a well-researched process.
Here are the fundamental difference between investing and gambling:
Gambling is an uncertain event. Investing is an activity that requires much knowledge, research and skills. Gambling on the other hand is an uncertain event that solely depends on emotions.
If someone wants to invest in the right asset, he first needs to do enough research, understands their goals, and financial information. Gambling doesn't require any such information. In the case of fantasy sport, if your money goes, there is no other way to buy it back.
In gambling, the result is dependent on the outcome of throwing a dice i.e. only one participant will win.
While in the stock market, if ten investors hold the shares of the same company and if the price goes up, all of them will make a profit.
Investing is done for the long term. Let’s say for 5 years or it could be extended for 10 years or more. Gambling is done for a shorter period such as for hours, or sometimes it can be stretched to a couple of weeks or months but not for a year.
Investing in share trading, mutual funds or any other assets gives investors ownership of the asset. In gambling, if you put money into it, either you will get more money or no money. There is no ownership assigned to participants at the end of gambling transactions.
Investing can happen with a specific goal in life. The goal could be anything like retirement planning, education, house planning, vehicle planning etc. While batting is done in pleasure to earn more money. One can also plan its future goals based on gambling but the risk is comparatively too high.
Several organizations identify gambling as addictive and lead to severe mental problems. While there are no such cases associated with investing. Instead, investing is a financial practice that is done for a healthy economic life.
It is extremely important to learn the thin line between investing and gambling.
Gambling is quite riskier than investing. The risk tolerance level of gamblers is slightly higher than investors. Gambling is a risk taken under certainty while investing involves risk under uncertain conditions. Gambling mainly depends on luck while investing on the other hand purely depends on practice, patience and knowledge.
Many people think putting money into the stock market is gambling. However, this is not so true. Share market trading in the stock market is not like a dice game.
In fact, trading is one of the best ways of investment as it involves examining past information of stock aka stock market research, analyzing its past performance and predicting its future growth with the help of fundamental analysis and technical analysis and other methods.
To invest in the right stocks, traders analyze their past trades, and then plan out their strategy such as which stocks to buy, at how much quantity and how much amount need to spend. Investors are well known before spending a single penny into it. These are the prerequisite for stock market trading.
Recently, fantasy sports sites were banned in 7 states of India including Tamil Nadu, Telangana, Andhra Pradesh, Odisha, Assam, Nagaland and Sikkim.
Fantasy sports apps is another example of gambling and therefore it is suggested to stay away from such sites. Instead, spend your time investing in different sectors. When it comes to investment, the stock market comes second to none. Investing in the right stocks with adequate knowledge leads to huge gains.
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