Looking for an alter-neigh-tive investment?

What has four feet, lives in a stable and could be your next investment? With the 139th Belmont Stakes coming up this Saturday, horse money can be found not just at the betting window but also in the thoroughbreds themselves. Investors looking to make their portfolios a little more exciting can purchase a racehorse, help raise it and share in the profits. “There are numerous ways to get into racing as an investor,” said Daniel J. Metzger, president of the Thoroughbred Owners and Breeders Association in Lexington, Ky. “We’re trying to walk the new investor through the steps of creating the best chance for success through ownership.” Mr. Metzger’s group, in cooperation with Keeneland Association Inc., a thoroughbred auctioneer, and Blood-Horse Publications, both of Lexington, has created The Racing Game. Working through its website, theracinggame.com, the program provides prospective investors with recommended industry advisers and details on horse ownership. Mr. Metzger is quick to point out that while his program makes horses an approachable investment to newcomers, the animals are hardly the safest choice. “We treat thoroughbred investing as both a business and a sport,” he said. “But it’s a long-term project for our investors, not a short-term solution.” Waiting game Owners who invest in a younger horse will pay less than someone buying a current winner but will have to wait awhile to see a return. For example, this year’s Preakness Stakes winner, Curlin, sold for $57,000 as a yearling in 2005 and is now estimated to be worth $20 million, according to Mr. Metzger. The three-year-old colt is owned by a group of investors that includes George Bolton, chief investment officer of WestEnd Capital Management LLC in San Francisco, and Jess Jackson, co-founder of Kendall-Jackson Wine Estates Ltd. in Santa Rosa, Calif. As part of The Racing Game, new investors can enter a partnership and buy a “share” of an animal for about $25,000. As a benefit, investors can reap the prize money without being responsible for their animal’s daily care and feeding. Maintenance expenses are tax deductible. But the risks include the possibility of a less-than-stellar racing career or an injury that can end a horse’s racing days forever. “I feel the risks are high for what is a small chance of a good investment,” said Mark Brown, a certified financial planner and managing director of Brown & Tedstrom Inc. in Denver. “When people get into collecting horses, it becomes a lifestyle. Having a love for the hobby is the first thing you should be interested in.” Sometimes that love is what separates the content investor from the unhappy one. Maggi Moss of Des Moines, Iowa, for example, bought her first horse for $25,000 in 1997, now owns more than 60 animals and earns enough from breeding and selling that she stepped away from her career as a personal-injury attorney. “I had a background in horses and did my own learning and research,” she said. “It wasn’t about making a living off of horses versus the law practice, but my passion for horses became renewed after I was burned out on the law.” Investors should approach horse dealing with caution. Too often, those who invest in their hobbies start adding to their collections without considering the financial consequences. “We make sure clients don’t get themselves into highly illiquid investments that don’t produce cash flow,” Mr. Brown said. “They’ll rationalize a purchase as a good investment, while it’s not necessarily so in the big financial planning picture.” Still, advisers recommend that horses and other exotic investments make up only a small percentage of anyone’s total portfolio. “If your portfolio consists of wine, art and horses, what are you going to live off of?” Mr. Brown said. “Categorize a horse as personal property that you don’t expect to get anything from other than enjoyment.”