Opinion: The Ultimate Guide to Betting Portfolios: Part 1 – How to set up your Portfolio
Do you know what successful bettors have in common? They all understand that long-term performance is key, and they all treat their betting in the same manner, as an investor in the stock market treats their shares. They use consistent staking and banking methodologies and realise that their ROI is likely to be razor thin.
In this guide, I will show you how to manage risk, adjust your bank, settle on a staking plan, as well as analysing the pros and cons of a betting portfolio, and analyse your possible ROI. But first, let’s find out what it is, and how you can set it up.
What is a Betting Portfolio?
In the financial sphere, a portfolio is a collection of assets held by an investor. It involves spreading money around different forms of investment. Talk to any financial advisor, and they will preach the importance of investment diversification. In finance, it is normal for a portfolio to include a fixed income such as Bonds, equities in the form of Stocks and Shares, and, for investors with a high-risk threshold, cryptocurrency.
If one of the investments shows a downturn, the idea is that at least one of the others will make a profit, thus minimising losses in the short-term, and ensuring profitability in the long-term.
A betting portfolio should be along the same lines. It needs to consist of a collection of systems and services that enable you to spread your investment. If you focus solely on football betting, for example, the system you use could go through a bad patch and cripple your bank balance. If you have a portfolio that includes several sports, and different betting types, it is possible to ride a wave of success in one aspect of your portfolio that covers losses in another arena.
Setting Up Your Betting Portfolio
The first step is to identify the different ‘assets’ you wish to include. For instance, you may include sports such as horse racing, football, and boxing. Then you have to decide on the type of bets or systems to include. Here are a few ideas:
- Use of tipster services.
- Matched Betting.
- Laying false favourites in horse racing.
- Backing the draw in Premier League games between the 14 sides not in the ‘top 6’.
- Backing odds-on favourites in horse racing.
- Back to lay trading on the Betfair Exchange.
- Seasonal horse racing trends.
- Backing a specific trainer in a certain type of race. For example, Nicky Henderson horses aged 6yo+ in Class 3 Hurdle races.
- Sticking to a single sport is okay. For instance, football lovers could decide to spread their risk by including eight different European leagues. Examples include selected home winners in Belgium and favourites in the Dutch league to win the second half of matches.
The list of possible ‘assets’ is lengthy, and you must use your own knowledge to determine the right options. You must also decide how many sections you want to divide your betting bank into.
Determining the Size of Your Betting Portfolio
Let’s say you are looking to choose five betting strategies to comprise your portfolio, and your betting bank is 300 units in total. You have to decide if each asset gets 60 units, or if one asset should have a greater number of units. Typically, you will decide on bankroll management depending on how risk averse you are.
For instance, backing odds-on favourites in horse racing will have a higher win rate than backing draws in football, but the latter arguably has the greater potential for profit. If you are happy to take more risk, you might place 80 units in the Draw part of your portfolio, and 50 units in the horse racing favourite section.
Overall, it is clear that sports betting is extremely unreliable which means you must learn how to control your level of risk. You could opt for all low-risk strategies, but as is the case in investment, the returns are also low. Ideally, you will include a mixture of low, medium, and high-risk assets. As a rule of thumb, any strategy with a win rate below 35% is high-risk. Between 35% and 65% is medium risk, and 66%+ is a low risk.
When analysing the win rate of the strategies you intend on using, make sure each one has a bare minimum of 50 past bets, although more than 500 is better, for obvious reasons! When you combine the historical outcomes of all the strategies you intend to use, your portfolio should have a history of at least 1,000 bets.
I, personally recommend, that the combined win rate of your portfolio should be at least 50%. This means you need to include at least one low-risk strategy for every high risk one.
Don’t commit to investing a penny more than you can afford to lose. Make sure you are also prepared to keep your money invested for a bare minimum of 12 months. The sad truth, as I will explain in Part 4, is that the overall ROI you can expect from professional gambling is far below what tipsters claim. Although it is perfectly fine to look at performance on a monthly or quarterly basis, you won’t get a true idea of what your portfolio can do for at least a year.
If you are relatively new to sports betting, you can use the enormous explosion in the number of online bookmakers to your advantage. It is possible to use dozens of new customer offers to earn several hundred pounds absolutely free. Imagine a situation where you begin with a £500 betting bank earned solely from bookmakers! If you would like more advice on how this can be achieved, let us know in the comments, below.
Once you have several bookmaker accounts, you also benefit from gaining an edge in pricing. Use sites such as Oddschecker to determine which bookie offers the best value on any given event. It is not unusual to boost your annual ROI by several percent by searching for better value. Alas, this is tricky for in-play events because of odds fluctuation.
Final Thoughts on Setting Up a Betting Portfolio
Even if you are a specialist in one type of bet in one sport, a betting portfolio is a crucial weapon in your arsenal. Rather than relying solely on one asset to turn a profit, you can systematically choose several assets and reduce your overall risk. If one strategy is in the midst of a bad spell, there is a decent chance that at least one other is producing the goods and keeping you afloat.
Putting together your own betting portfolio is a time-consuming process and requires skill, patience, and discipline. If you have six different assets to manage, for instance, you need to monitor the individual performance of each one, as well as your portfolio’s overall profit or loss.
After 12 months, you should revisit your portfolio and consider removing assets that performed poorly. At that stage, you can decide to add a new investment or spread the units remaining from the failed system to your other assets.
This article has only scratched the surface. In Part 2, I will show you how to create and manage your betting bank, while also dealing with risk and leverage. In Part 3, I will outline the pros and cons, and in Part 4, I will provide you with information on the ROI you can expect, along with details on winning and losing streaks.
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Patrick graduated from the National University of Ireland, Galway with an MA in Literature and Publishing but decided he would rather have the freedom of a freelance writer than be stuck in a publishing house all day. He has enjoyed this freedom since 2009 and has written thousands of articles on a variety of topics but sports betting is his passion. While his specialty is finding mismatches in obscure football leagues, he also likes to use his research skills to provide punters with detailed winning strategies in horse racing. You can check out his personal blog on www.lynchthewriter.com or Twitter @pl1982 where he writes content to help small businesses achieve success.