‘Portfolio Betting’ is a phrase that you hear occasionally talked about, usually by system bettors. I think the phrase itself is slightly misleading because, as far as I am concerned, every profitable bettor is a portfolio bettor. What I mean by this is that anybody who is successful at betting is going to have more than one way of finding selections.
You may well use just one method for finding selections in claiming races but you are not going to use this same method to find high class hurdlers! By definition you are going to need a number of different strategies to find your winners and so you are building a portfolio.
What is usually meant when ‘Portfolio Betting’ is talked about, is system betting and so that is what I am going to concentrate on in today’s post.
It is probably obvious that system betting is the most popular method of finding selections. This is shown by the multitude of systems that are constantly being released for sale and the many varied discussions that are taking place all over the internet in various forums about them. I would also like to define a system as all handicapping has some elements of a systematic approach, and even a professional handicapper may call his process systematic while to some of us it may look like he is magically picking information from anywhere.
For the purposes of this post we shall define a system as a clear cut set of rules that can be followed by anyone and where each person following them will result in finding exactly the same selections as everyone else.
Let me say now that systems can be profitable. Admittedly there are very few commercial systems that are and even if they began life profitably then they probably have stopped working due to the numbers of people using them. If you would like to learn how you can revive old systems you may have purchased in order to make them profitable again then please read the article I wrote about Using Old Systems To Make A Profit.
When systems are profitable they are usually profitable by only a small return on investment (ROI). Don’t be misled into thinking that a small ROI equals a small profit. I personally work on a very low ROI but have a high quantity of bets but the best examples are the betting syndicates who may be working to a 3% ROI but easily placing £1,000,000 in bets per month. Some syndicates are placing far more than this but this example equates to a £30,000 profit per month.
The problem with small ROI systems is that you do not have much margin for error. All betting will have winning periods and losing periods but it is the long-term that we are interested in. Unfortunately losing periods on a system with a low ROI can result in a high loss of profits and very low moral for the user. In order to overcome this we use a betting portfolio.
By using a selection of systems you can significantly reduce the losing periods. Of course this also means that the winning periods are reduced but the end result is that your betting life is much more stable, showing a gradual incline of profits rather than high and low peaks.
What is crucial in a portfolio is putting together the right mixture of systems so that they are working together rather than against each other. I shall look at ways of choosing the correct systems to work together in the next post in this series.
If you are interested in making your own systems then you can see how we made a Race Advisor Community System.