P2P Lending Is Among the Best Non-Stock Investment Options
Done With Roller-Coaster Stock Market Movements?
Still decided on going for the wild ride that stock investing offers? Or ready to go from stocks speculator to a less anxious investor? If the prospect of falling markets makes you very jittery, it may be time to rethink where to invest your money, and consider options like peer-to-peer (P2P) lending.
The recent roller-coaster spin of the stock market had people seriously pondering on alternative investments to stocks and bonds. Fact is, in stock market investing, things can get tricky. An investor may get high-yield returns one moment, then end up with big losses in other instances.
Stock market investing may also require certain approaches – you may invest on a large number of stocks but can you monitor them? Experts also say you also should not let emotions cloud your judgment, and stay invested. As for those who bet big on a few stocks; such focused exposure can have repercussions too.
Certain individuals seeking investments other than stocks have turned their attention to popular cryptocurrencies, but can you honestly say you understand how they work? Not only are cryptocurrencies unregulated by government entities or banks, there is also no authority that can be approached for grievance redressal if you get ripped off in a crypto transaction.
Big Lessons Learned During Pandemic
While seasoned stock market investors may have made earnings from stable businesses with high dividend yields, some of them were not spared from the pandemic disruption. When markets are volatile, there are non-stock investments worth seriously trying. As with all pursuits involving funds, do exercise due diligence and know your risk tolerance.
This pandemic had badly beaten up many businesses and shaken investors. It has underscored the need to put together a portfolio that can weather storms. Here are three tried-and-tested ways or the best alternative investments opportunities to build your portfolio, or better yet, to “partially” pandemic-proof your portfolio.
1. Real estate and rentals. You are looking to minimize risks created by falling markets, inflation, and so on. If you have management skill, or willing to get professional property manager, you can purchase property designed to provide you with a regular income stream, like from renters. In either case, real estate is one of the solid alternative investment ideas to stock market investing. Some people with funds to spare even combine non stock investments like real estate, with a physical investment like gold or something similarly tangible and of value.
2. Starting your own business. In different parts of the world, there has been a massive surge in interest in franchising opportunities within home services sector. This has occurred as most people came face to face with tough realities of life, took a step back, and mustered the courage to follow their gut instincts and interests. Indeed, starting your own small business venture is one of the best alternative investments, even during the pandemic.
Investing in a franchise can be a great way to diversify your investment portfolio. However, you need to allot ample time to find the right franchisor that can provide the needed support, especially if you are a newbie.
As a franchisee, you also must be ready to take on a more direct, active role to grow your earnings. Starting one’s business requires tons of patience, hard work, and capital infusion. In terms of the needed financial boost, startup entrepreneurs can rely on another investment avenue — P2P loans.
You may also like: Everything you need to know about P2P Investment
3. Peer-to-peer lending. P2P investing requires shorter time commitment than the other mentioned options. Nonetheless, it can generate passive income for the investor, even as he/she sleeps.
Funds may be typically pooled with other investors’ money, to comprise the loan made out to qualified borrowers. The investor would then receive a fixed repayment each month that includes the interest. The returns from P2P lending can be higher than those obtained from standard savings vehicles.
A key participant in the P2P lending process – the funder or group of investors — enables unsecured personal loans to be availed by verified consumers. In turn, the investors may reap average annual returns of 7, 9, or even 11%. Most peer-to-peer lending returns run higher than what a typical savings account can give.
Peer to Peer Lending vs Stocks
There is a question that pops up in the minds of those who have only recently learned about P2P lending platforms. Is peer to peer lending a good investment? The answer is a resounding yes.
As with other investments, there are risks, of course. Since a chunk of P2P loan customers happen to be those who have not been able to obtain a loan from bank or conventional loan outlets, and considering the changing economic times, there is the possibility of default. Investors can carefully probe, nonetheless, and opt for borrower profiles that suit them, before narrowing down to a solid prospect.
Overall, the level of risk of peer-to-peer lending/investing is not as high as a stock market investment. In terms of similarities, both peer to peer investing and stock market investing can be done online. In the digital era, it has never been easier to create an investor account and see it through – from home or wherever you are.
Those who have taken the time to sign up as borrower, or to invest in peer-to-peer lending have seen how an automated platform can handle all the administrative tasks — from qualifying borrowers for loans, to underwriting, closing the deal, tracking, disbursement and collection.
Even in a low-interest-rate environment, P2P lending presents a main advantage: attractive absolute and risk-adjusted returns. Even when the economy is not doing well, the annualized returns from P2P investing can beat or pummel stock market returns.
A website that has as core philosophy, “Invest, and let compound interest do the rest” has this to say:
As far as non-traditional investments or the best alternative investments go, 2021 might shape up nicely for those who take the moderate risk, adopt a bullish stance, and move on to reap above average potential returns.
A good option for P2P lending is Blend.ph. Ask us how you can earn as much as 30 percent per annum by emailing us at [email protected]. Or visit www.blend.ph/investor.
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