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PORTFOLIO

eyond the initial price of purchasing a horse, which
on average is $60,000, the maintenance can be
expensive quickly rising to seven-figures. Ongoing
B racehorse expenses include competitive training,
veterinary, and trailer and travel costs. Some savvy investors
recommend investing in a yearling, because at that age the horses
do not have a proven track record and the investor will get a more
economical price, relying on speculation at fall auctions.

It is important to note that investors are buying into a lifestyle,
not just looking for a quick return. Return on investment (ROI)
cannot be determined by cash receipts because buying a racehorse
is not a traditional investment. A great part of the ROI is what the
buyer receives from the experience of the venture. Enjoyment and
appreciation are a large aspect of the investment. The investor will
lose on all accounts if that is not factored into the ROI equation.

However, many investors recognize the lucrative potential of
racehorse investing, despite the slim chances of picking a winner.
There is another option, which is not to buy the whole horse,
but a part of the horse. Buying shares of a racehorse or multiple
horses can help investors mitigate risk. In security terms, this is
comparable to an index fund or exchange-traded fund (ETF)
where the investment money is spread across multiple investments
instead of in a single stock.

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