Typically, you can characterize financial markets with one word: volatile. Any given factor on any given day is able to drive the market sky-high or send it plummeting into a fiery doom. For many, the challenges set by market volatility are enough to never consider investing at all.
While the opening lines of this article may seem overly dramatic, the modern financial timeline is linear, yet it is not a straight line. Therefore, the reasoning still stands – investing in the market can lay waste to many life savings. Naturally, investments don’t always go down in value. However, for argument’s sake, the financial market is unpredictable to the point where an individual investor cannot with reasonable certainty predict the direction of the next major fluctuation. All of this rings especially true during turbulent political events nationally and internationally – look no further than the most recent events and the impact they’ve had on finance worldwide.
Naturally, given the current state of the market, investors look for alternate investment options that could provide profitability in combination with safety. Peer-to-peer (P2P) space and P2P marketplaces in particular have emerged as exactly such an alternative. Here’s why:
P2P marketplaces offer simple, non-volatile opportunities, which makes P2P marketplaces a safe haven of sorts for those who want to avoid the stress associated with traditional investment options. While still enjoying the benefits of higher interest rates. Because P2P marketplaces revolve around participating in particular claim rights arising from loans to individuals or businesses, issued by various loan originators and offered within these marketplaces, this option is much easier to comprehend and engage with. Because P2P opportunities share minimal or no correlation with the market, as a marketplace customer, you know what and when to anticipate. As opposed to the stock market, where anything might happen at any given moment.
Probably the most important factor for choosing this option. During high volatility, markets become increasingly unpredictable, which in turn can make investors uneasy. Often, when uneasy, investors choose to liquidate their assets to secure their profit or limit their losses. The stock market allows for that. However, selling at a low point is hardly what investors want for their investments in general. Here’s where choosing P2P marketplaces take the upper hand. Again.
When you’ve made a purchase in a P2P marketplace (in most cases), your holdings typically do not lose their liquidity, because you’re able to sell them at any time for the price you bought them for. This additional layer of flexibility is what really sets the P2P marketplace apart from other, more traditional investments.
It is no secret that the greatest weapon against market volatility is investment diversification. Having a diverse investment portfolio can often be the difference between success and failure. Unfortunately, in order to diversify your portfolio you are expected to take on investments that, in laymen’s terms, really don’t pull their own weight. Low profit investments like bonds and certificates of deposit (CD’s) have the reputation of being safe investments. However, the take-away these investments provide leaves investors wishing for more. Because of high inflation and taxes, the profit made on these investments is non-significant, making your whole investment strategy ineffective.
Utilizing a P2P marketplace should always be considered for your portfolio diversification at the very least. As a non-correlated opportunity, it can hold against market volatility while at the same time being profitable. The stock market is typically considered the most profitable investment option. Nevertheless, the stock market’s long-term returns lie around 10% yearly. Whereas using Swaper can offer you yearly returns of up to 16%, without any of the hassle.
For an investor, surviving market volatility can be a daunting task. Having tools and options that may help with this ordeal can make all the difference. P2P marketplaces are exactly such tools. In short, they provide the profitability of stock markets, the security of, well, securities and the liquidity of other highly liquid assets, like gold.
For most investors out there, the source of their investments come from hard-earned life savings. Often earned literally through blood, sweat and tears. It is safe to assume that these investors would do everything in their power to invest in safe and profitable assets. Utilizing a P2P marketplace provides exactly that – a fairly safe and profitable option that can either help you diversify your portfolio or become the portfolio.
Even in times of turbulence and uncertainty in the finance world, prosperity is only one step away – invest with Swaper today! Starting from as low as €10.