Since launching in mid-November 2018, Betmarkets portfolio achieved a return of +4.40% until the end of January. This month saw the portfolio increasing in value much due to the performance of one only expert. And that’s why you should diversify and follow several at the same time (we recommend 5+). After all, can you tell exactly who will have the best performance? No…? Thought the same as well. Time will tell what the rest of the year will bring. However, we are already seeing the effects of adding more experts to the portfolio: lower volatility! As everyone should know: slow and steady wins the race!
Betmarkets portfolio: slow and steady
We closed January with more than 1,500 active users with us (if you are one of them, you’re the best!). Also, we launched an entirely new version of the platform. It was a month of hard, but gratifying, work. As promised in the last report, we added more experts to the platform. 6 to be more precise! This promise is still open. More quality experts will become available for you to follow as the weeks go by. On the corporate side of things, we are happy to disclose that we finally moved to an office of our own and that the team is growing. We are now 7 people devoting our work to turning sports betting into an investable asset for everyone.
The portfolio that we’re going to report is built by dividing your balance equally amongst all experts available and by following each new one as soon as he/she is available. In this sense, if you were to follow this portfolio, you would be reallocating your balance everytime a new expert is added.
Please note the following amendment to the portfolio’s performance against the last update: upon the implementation of the new layout, all information regarding the users’ accounts had to be reset. We maintained all records of the experts’ bets but lost the information regarding bets that were not entirely placed in the betting providers (lack of liquidity in the market or error on our side). By considering that all past bets were completely placed, past performance has been updated: November closed with +2.86% (from +2.11%) and December with +3.99% (from +3.29%).
January 2019: +0.41% (+4.40% overall)
This month’s peak performance was achieved right at the start of it. Experts started the year firing on all cylinders and the portfolio achieved a +5.39% performance as of 02/01. This was followed by a series of negative results that saw the portfolio dropping to +2.35% as of 14/01, losing 1.64% since the beginning of the year. The experts then bounced back and closed the month with the portfolio showing a +4.40% gain.
Throughout the month, we added 6 more experts to the platform. Shrek and portugaltipster bet on football in the Portuguese first and second leagues. emurla is a basketball expert that mostly works with the Turkish league. Riku Pasalinen works in the Turkish leagues as well, but on the football ones. Diocletianus has a very diversified set of sports and tends to bet on leagues on Southeast Europe. Lastly, Elizabeto is a Spanish football expert that works with the country’s top two tiers.
This has been the daily evolution of the performance of our portfolio since its inception. It has been amended by the same reasons presented earlier. The bolded figures represent the end of each month.
With the addition of more experts to the portfolio, its volatility has been decreasing steadily, as expected. We ended December with an annualised standard deviation of 19.18% and have now dropped to 14.97%. This figure will continue to run down as the contribution of the initial days – where we only had a handful of experts – diminishes.
For comparison, the S&P500 is usually in the 10-15% range. For the returns one might be able to get from sports betting, the risk level of the portfolio has been acceptable. Another thing that is interesting to add is that its behaviour is entirely independent from the one of the S&P500 (and of other indices).
We are also compiling information on the Market Edge, that is, the advantage of the experts against the overall market (measured by the comparison between the odds they bet on and the closing odds – statistically speaking, the best predictors of the true probability of the event). We are happy to announce that we closed January with a Market Edge of 2.21%. Given that the fees of the betting providers we work with are in the range of 1.7%-2.0%, even by picking randomly the bets (as to say, even without any “skill” at all), these experts will tend to profit in the long-term. This is just due to grabbing higher odds than what the market settles as fair.
What we expect for 2019
During 2019 we will continue adding more experts to our platform. With the increased number of bets, the portfolio will start to exhibit a steadier behaviour. It’s standard deviation will decrease due to the independence between the performances of each expert. Winning runs by some will be compensated by losing runs of others. On average, the impact of being able to beat the market should start arising. That is the power of diversification and the main reason for you to follow several experts simultaneously.
We are aiming to beat the long-term risk and inflation-adjusted return of the S&P500 of 6% per year while keeping lower volatility levels.
If you would like to have a closer look into the portfolio of sports betting experts we are offering, register at Betmarkets. In this beta version we are giving you €20 to invest until the end of it. No deposit required. At the end of it, this amount is withdrawn. You get to keep all profits as credit towards future experts’ profit-sharing commissions. In the case of a loss, it’s entirely on us.