Golf Investors – The New Avenue

Golf is known as a humbling game as many would say but there is many a face to the game than we normally get to see at a 9-par course or on television. There is more to Golf than the PGA tours. One of the new faces of the game is investment. Yes! Golf investment is coming of age. A decade back when the multi-ethnic, multi-talented uber-golfer arrived, it made of the greatest bull market pointer in history and laid the foundation for an investing heaven in Golf.

In 1997, Tiger Woods became a champion by winning his first Masters and that was a high point because it initiated higher sales of golf products. The impact was overwhelming as Golf suddenly became overtly popular especially with Armani starting a special line of golf apparels etc. In 1999, enter two new-to-the-market fund managers, Jeffrey and Ross Provence and we see the launch of the Value Trend Links Fund. It was an equity mutual fund that specialized in investments on sponsors of Golf tournaments and golf companies.

The golf industry over the last decade or so has been quite flat in spite of the fact that there are 30 million golfers in the US alone. One of the premier organizations related to Golf investments in America is the Golf Trust of America, which is a sort of self-administered REIT (real estate investment trust). They have most of their interests in upscale golf courses. But there are many Golf investment companies, who have closed their doors due to losses suffered. There are some success stories regarding Golf investors and investments and it is all about timing.

One such story revolves around Callaway Golf, which held the top spot in a bearish market and those who invested in the shares enjoyed an annual return of 20%. But five years back, the stocks fell.

This is mostly so because in spite of the Golf industry being comparatively big, investment options has not been good enough so far. But things are about to change and investors need to keep their eyes on the par and the ball. Restraint has to be exercised and investors need to be careful especially in the light of the fact that Golfing is an overbuilt marketplace that has been pulled down by an uncertain economy.

Golf investors have different options available, which could be investing in Golf training centers, Golf courses, shares, Golf Homes and mutual funds. You will have three options for Investment in Golf training centers and they include regional franchise, Area development agreement and Individual franchise. The investment amount can vary anywhere from $150,000 to $350,000. Investing in a Golf course is similar to real estate investments.

One of the major investment sector will still be the stock market & mutual funds. Let us take a look at the performance of some of the stocks. The main companies in mutual funds include Callaway, Fortune Brands, and Nike.

Adams Golf ADGO Annualized return: -59.80%

Ashworth ASHW Annualized return: -1.59%

Callaway Golf ELY Annualized return: 19.41%

Nike NKE Annualized return: 10.03%