In your HTML, the nested <ul>
needs to be inside the closing </li>
<li>
<a href="">Portfolio</a>
<ul>
<li><a href="">Experimental</a></li>
<li><a href="">Motion Graphics</a></li>
<li><a href="">Graphic Design</a></li>
<li><a href="">Web Design</a></li>
</ul>
</li>
You can position your submenu relative to it's parent by setting your parent menu item to position: relative;
which you already have, and adding these styles to your submenu, changing the top and left values to your requirements:
position: absolute;
top: 0;
left: 0;
I have updated your fiddle here