Date: May 5, 2016
The Battle of Returns: MLB vs. S&P 500 (April 2015 - April 2016)
The 2016 baseball season is underway and teams have begun to navigate the long and winding road that is their 162-game season. Getting off to a successful early start is key in baseball as well as it is in betting on baseball. It is shaping up to be an exciting season as the Chicago Cubs made a statement out of the gate posting a league-best 17-5 record.
Not to be outdone, there's great momentum building on the south side of Chicago as well. The Chicago White Sox are off to a great start with a 17-8 record in April. The White Sox also rank as the top betting team in terms of ROI.
Last season we posted a comparison between returns generated via investing in baseball versus investing in the S&P 500. While the two are distinctively different investment vehicles, it's good to assess performance against benchmarks and standards. It's also critical to assess the long-term performance and seek to allocate capital appropriately.
Below are the results as of the end of April 2016.
Comparison timeframe: April 1, 2015 to April 30, 2016:
MLB Strategy 1: +63.58%*
MLB Strategy 2: +7.05%*
S&P 500: (.14%)** (Comparison)
It should be noted that MLB wagers were not available from October 2015 through March 2016 due to the seasonality of the sport. That timeframe is included in the S&P returns.
Another challenge quite frankly when dealing in sports betting is the variability of returns. Unlike the S&P which is usually a smoother ride over the long-term, sports betting returns are far more volatile. Investors must adjust their mental model to these circumstances in order to properly manage their expectations and maximize their returns.
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