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Thursday, April 16, 2009

Getting a better return

So four weeks in and my original £100 investment now stands at £101.64.  Not bad for a month given I am only looking for a £3.62 gain or more to beat the rates on offer in the best cash ISA’s when I started the experiment. If I keep that up for a year it will be the equivalent to a 21% AER tax free! But could I have done better?  The obvious answer is yes, I could have placed more winning bets, but that would put more capital at risk and remember its quality not quantity that matters.  But there is another way I could potentially have increased returns without risking more capital.

At the start of the experiment I said I had deposited my £100 with a single bookmaker.  Not all bookmakers will give the same odds for the same event, so I may not necessarily be getting the best return available each time I win. 

Let me start by saying my reason for using just a single bookmaker is for comparative reasons for the experiment.  If I had put the money in a savings account I would have left it in that account for a year.  While it is best to regularly check you are still getting a good rate in a savings account, I tend to check mine annually rather than weekly or monthly.

A better option would be to choose multiple bookmakers and deposit some of your investment with each.  This way when you see a bet you like the look of, you can check for the best rate to maximise your returns.  If you are staking 1% of your investment per bet, I would recommend using no more than 5 different bookmakers.  While spreading your money gives the best returns, spreading it about too much could mean you all your money with a particular bookmaker is staked, stopping you placing any more bets with them should the opportunity arise, until one of your outstanding bets is settled.

If you want to check odds there is a great comparison site OddsChecker.com, which will give you the odds available from all the leading online bookmakers.  What you will also notice is that some events are not carried by all bookmakers, so if there is a particular sport you want to bet on, it can be worth having a look here to see which bookmakers tend to run books on it.

Over the next couple of weeks, I will check my bets to see if I could have increase my returns if I had placed the bets with different bookmakers.

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