Portfolio Approach to Betting

I have always had a strong interest in the stock market, I buy and sell shares regularly, trade the FTSE 100, and have even dabbled in Forex over the years to good effect. All the while building a portfolio of investments to fund my retirement (still a long way off yet!) and I have done it very successfully to date.

I have very much leaned on the buy low, sell high strategy and banked some very good gains over the years, while maintaining a balanced portfolio of investments. Everything from AIM shares, to FTSE 100 companies, I spread and manage risk effectively, and this is the key element to making money long-term.

At the beginning of February, with a friend, we set out to apply a ‘portfolio’ approach to betting as an experiment and as the results have been very good I thought it would be a good time to expand on this idea as something that is very workable and potentially very profitable if you go about it the right way.

I have always regarded following just one tipster blindly as very dangerous, a losing run hitting can hurt and wipe out any gains made, but I am also very aware that if tipsters and sports are viewed as investment ‘instruments’ then there should in theory be a way of managing risk and maximising return by spreading the risk across multiple tipsters and sports, to try to limit the effect any one element of the portfolio has on the overall performance. Risk management and exposure management applied to horse racing and sports betting basically – it is a sound way to make money long-term with the right elements in place.

When we initially set up our portfolio we were learning as we went along. We had a fixed betting bank, but soon discovered this had to be increased significantly to sustain the level of staking and the amount of bets we were placing on a daily basis. So we increased the betting bank, and decreased the stakes to ensure that we were in a position to weather any bad run, but also able to maximise the returns when things went our way.

Getting the right bank / staking formula is essential. With too small a bank, and too high stakes, the chance of a wipe-out is significantly increased. We have found the right medium now, but I will expound a bit more on that further down in the article.

Choosing tipsters was easy, we knew who we wanted to follow, and over the last 4 weeks this has remained fairly consistent. A few days ago we added 2 additional tipsters as ‘investments’ in our portfolio also. Each tipster has a different betting style – some are more analytical than others, some are value focused, while others are just very knowledgeable in the sport they specialise in and know a good betting opportunity when they see one. It’s a nice mix right now.

We also decided that in order to limit risk and exposure we would also cover multiple sports and this has served us well. Horse racing is the main sport we cover, but football is also another. Again, with football we cover multiple tipsters to ensure that if 1 has a bad run we have a couple of others who can balance that out, and this has proven to be a winning strategy over time.

I really like the idea of seeing bets as ‘investments’ and building a portfolio of this nature. Tipsters essentially become ‘instruments’ in the portfolio, and as we go along and spot talent early enough we will be able to hopefully ride a few tipsters right to the top of the table. I have already seen a few very good ones and have taken a risk on a couple of newbies lately who I think have real potential to shine over time. I always analyse their tipping style to ensure it fits in with our overall portfolio goals and this is essential because we like to see a nice mix of odds, across the whole market spectrum.

Odds are an important consideration, and just recently we decided not to bet on anything less than 4/1 in our portfolio with regards to horse racing. The returns were minimal for the stake risked, and this also served the purpose of reducing our overall bet exposure amount on a daily basis as well. To be honest I haven’t noticed a huge difference since we did this, so it was a move for the good.

So how is the portfolio made up? Well, essentially it is a mix of my BV Value bets (about 8-10 per day) that have a high margin. I aim for a 80-100% margin here with the value bets, anything less is not worth the effort I feel. Incidentally, the value bets have outperformed the tipster bets considerably, with less than half the stake turnover, and near on double the ROI. So anyone who really believes I am out of form with the losers I have had on the board lately… it’s just a matter of time! 🙂

The 2nd element of the portfolio contains the BV System Bets. I trialled this extensively in the forum for a month to double-check I was on the right track here, and I am. I have now included any system bet that hits 4/1+ as an immediate and automatic bet. We have also now introduced the Laying aspect I looked at extensively during the trial period, laying overbet shorties to lose. This has been producing some great profits for minimal risk and something we are keen to extend and implement further in the coming weeks.

The 3rd element is a combination of tipsters from the Betting Tools tipping board. These are carefully chosen to ensure we have a nice balance, I alluded to this earlier. We initially wanted a minimum of 15% ROI as a qualifying criteria, but have relaxed this on a couple of tipsters who show real potential – a bit of speculation doesn’t hurt and they are proving their worth to date.

The 4th element of the portfolio is football betting. We identified a few of very good football tipsters, and of course I will let the cat out of the bag and tell you that our main man Brian is one of them! I am sure you can guess who the rest are 🙂 The idea of combining sports like horse racing and football is sound… it’s about limiting exposure and spreading risk again.

So the portfolio is in place. Initially we made mistakes, but this is to be expected in a new venture into unknown territory. I had read up on the forum posts about betting all the tips on the board, and knew that approach was fraught with danger due to the big swings into profit and loss territory, but the overall concept was what initially got me thinking… I knew it could be done more selectively as I was already using the principle in my own financial investment portfolio. So why not try it out on betting?

Well we are over a month into it now, there have been good days, there have been break even days, and there have been bad days, but overall we are well up. In fact, we have never gone negative, apart from the very first bet we placed that we lost our stake on, from there on it was all uphill and have never gone into negative territory since which is a great result.

Combining tipsters, value betting, system bets, and lays is time-consuming and takes some management! Thankfully we have things working brilliantly now in that area and it has fallen into place to form a systematic flow from selection to bet placement – and because we have such a great combination of betting covered, across different sports and multiple odds ranges, I can see this as something that has real long-term potential to grow and generate profits.

Staking was the biggest problem we had. Getting the mix right. Initially we were staking way too high in relation to our betting bank, so we quickly determined that this was something we needed to get right. We were putting something like 1.5% of our betting bank on each bet, and given there were a fair few bets being placed this meant our market exposure on any given day was way too high. We reduced stakes to around 0.50% at that point, and even that was too high in relation to our betting bank initially – but as the profits have increased we are now sitting at considerably less than that and it would take some considerable run of bad results now to absolutely wipe us out. At the time of writing our stake equates to less than 0.30% of our total betting bank which is about right for the level of bets we are placing right now.

So is the portfolio approach better than value betting? Well, it depends. I stripped out all the bets, except for the value bets last night and in actual fact the value bets show more than double the ROI % we are achieving currently, with less stake turnover, so I am still a very strong advocate of value betting and always will be. But I do like the portfolio approach also to spread risk and exposure, so the right compromise is to include value, tipsters, system and lays across multiple sports, and effectively manage risk and market exposure to ensure that at any one point we are not over exposed to either one particular sport, one method of betting, one tipster, or one odds range.

The whole exercise has been a real learning curve, and the fact that we have generated the profit we have using such small stakes is remarkable, even to me. In fact, when we reduced stakes and defined our minimum odds range we have made more money than when we were staking higher regardless of odds.

The whole purpose of this article is just to encourage you and assure you that making money from horse racing, and sports betting in general is very possible. And very feasible if you approach it the right way, managing your risk and exposure effectively, and always keeping ahead of the market odds wise. By putting the odds firmly in your favour I consider sports betting as a very effective form of investment and certainly just as lucrative as investing in the likes of stocks and shares or spread betting. By knowing the market you operate in, you have a distinct advantage over those who don’t.

So if you have ever wondered if building your own portfolio is a good way to make money from horses and football, take a look at the following which demonstrates the return we have achieved from horse racing alone:

Betting Portfolio Stats

You can see here that on the horses we have placed 496 bets to date, had 108 winners, 363 losers and 25 void bets. We have staked £1,769.54, returned £532.85 in profit on that staked amount, and have realised a 30.11% return on investment. This is from horse racing only. Remember, this is just one month’s results. Longer term I would expect the ROI to fluctuate between 20% – 30% on bet turnover on the horses, which is actually very good considering the small stakes used to achieve that. On average we have bet just £3.75 per bet placed to realise that profit and it is only that high because we staked too high in the beginning until we realised the right level. And we have done this on a strike rate of just over 20%.

The key elements to building a betting portfolio are: a solid understanding of risk and exposure, good management and administration, value betting at the best odds with good margins, a systematic approach to selection, and an eye for a good tipster! If you think you have what it takes, then join the many who are starting to realise that horse racing and sports betting in general is not a ‘mugs’ game, but can indeed be a very good avenue for investment, with the expectation of a great return, if approached the right way.

And of course, all profits are TAX FREE.

Will keep you updated on the progress of the portfolio as we go along.

Until next time…