It seems to have become open season for sniggering at sports stars with major investment problems. A number of big names in football have been saddled with tax demands now that HMRC have successfully challenged a number of tax mitigations schemes that used film investments as a basis for creating tax losses.
Rugby players have usually avoided headlines suggesting that their investment choices were poor until this last week, when the press covered a poorly performing share tip from the kit man for the England team. Here are examples of the coverage from the Guardian to the Sun:-
Until high-level rugby went professional, there was a strong link between rugby and investments, with many players working for investment firms and qualifying before retirement from the game as financial advisers, bond or fund managers or bank managers. World cup winners and Tigers players Neil Back and Martin Johnson have strong links with financial services, which may go some way to explain why rugby players do not hit the investment headlines so often. The relative lack of money in the sport may also have a bearing!
For us, a single share investment is a significant investment risk; we would always recommend diversity, by buying more than one company’s shares and usually across a number of markets. Share tips from individuals are always going to be a risk as anyone who does have an “inside track” is likely to be breaking the law, (insider trading), and those who don’t are depending on having a comprehensive knowledge of the publicly released information and the ability to interpret it. This, in itself will be difficult for anyone with a full-time job outside of financial services.
I was reassured by a comment in the Sun’s coverage, which suggested that Danny Cipriani had “been tempted to get involved but backed out after discussing the proposal with financial advisers.” So he has an adviser and asks before he does things!
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