In my recent post on 7 Things You Can Do To Survive A Falling Market, I have shared details on what can you do to survive a falling market. With the current economic situation, the market seems to be in a volatile mode where we can’t predict where it will be heading. One thing for sure, it is important to have a Diversified Portfolio to minimize any possible risk during a falling market.
Talking about Diversified Portfolio, are we looking at investing in different stocks & sector OR are we looking at investing in different platform such as Stocks, Bonds, Mutual Fund, Robo-Advisor, P2P Financing, Property & others? It really depends on your investment risk tolerance & appetite. Personally my Investment Portfolio is based on investing in different platforms.
There are plenty of Investment Platforms to Diversify but Why I Think P2P Financing is a Better Investment Option in a Bad Economy?
1. P2P Financing is Fixed Interest
Unlike Stocks, Mutual Fund & Others, P2P Financing pays you Fixed Interest in good or bad market. The best part of all, P2P Financing pays you higher interest compared to other traditional investment platforms. You may expect investment return between 10-18% per annum.
2. Investment Amount is as Low as RM100
Yes. You can invest with as Low as RM100. All you have to do is deposit RM1000 in your P2P Financing Platform & you are good to go. You can go for Auto-Investing option as well so you don’t need to monitor the platform all the time for Investment Opportunity. The Auto-Investing bot will be investing based on your criteria such as Interest Rate, Industry & Investment Tenure.
3. Borrowers Business Operates as Usual
Since P2P Financing Platform in Malaysia does not provide any personal financing, their borrowers are 100% business operators. Despite good or bad economy, most businesses will operate their business as usual unless the company goes bankrupt.
4. Risk of Default?
Investing in P2P Financing Platform main risk will always be the payment default. In order to minimize the risk of payment default, the P2P Financing Platform will always perform a detailed checking on the borrowers bank account & business nature before approving them to be in their platform.
5. What if Default Happens?
This is something nobody can guarantee. As an investor in P2P Financing Platform, I have prepared myself if there is any payment default. The tip is, you have to diversify your lending within the platform. Example : If you have RM1000 in the platform, it’s better for you to lend RM100 to 10 Borrowers instead of RM1000 to 1 Borrowers.
As an investor, one of the most Basic Rules of Investing is Never Put All Your Eggs in One Basket. Look at the potential risk of each investment before you decide to invest. P2P Financing can be one of your investment options if you are looking to diversify your portfolio & earn higher fixed interest compared to other investment instrument. Personally I would recommend Funding Societies to you. They are the Leading P2P Financing Platform in Malaysia. I have started to invest with them since January 2018 & my Annualised Performance with them is 12.55%. That is a pretty good return for 1 year investment with them.
Interested to invest with Funding Societies? You can use my PROMO CODE to RECEIVE RM50 with MINIMUM DEPOSIT of RM1000. What are you waiting for? Sign Up NOW with Black Belt Millionaire link HERE or you can use my PROMO CODE : j7khvfoc upon Sign Up.
In order to support their customers better, they have recently launched a New Feature for Auto Invest.
1. Minimum / Maximum Investment Amount Range
In comparison to their previous Auto Invest Feature, you can only set a fixed amount of investment. So if you set RM100 as the fixed amount, you can’t increase the amount unless you manually invest in it.
2. Max Borrower Exposure
This is to minimize your investment risk. I find this to be extremely useful. How does Max Borrower Exposure works?
You have invested in a single borrower (ABC Company) for a total of RM6,000. They repay RM1,000. Your outstanding exposure to them is now RM5,000.
If your total outstanding exposure to all borrowers is RM20,000, this means your outstanding borrower exposure to ABC Company is 25%
RM5,000 / RM20,000 = 25%
Setting the Max Borrower Exposure setting to 25% will ensure the Auto Invest Bot never invests above the 25% outstanding exposure limit for a single borrower.
3. Exhaust Balance
Having not enough balance to invest within your Auto Invest range? This is the solution for you.
You’ve set an Auto Invest Bot to invest between RM1,000 – RM1,200, but your balance is only RM900.
There’s a loan match! The loan min and max are RM500 – RM1,200. With this setting turned on, the Auto Invest Bot will attempt to invest between RM500 and RM900.
Note: You’re able to login and start creating your new Auto Invest settings. Your current Bots will be retired and the new Bots will start working automatically on the official launch day, 14 January 2019.
By 14 January 2019, if you do not create new Auto Invest settings, Funding Societies will help set your Auto Invest settings following your previous ones.