If you’re reading this, then you must be coming from the previous article, where we guided you through the basics of the Auto-Invest feature on iuvo; or from the one where we explained when and why you should use it. If not, then you should go read them so that this one can feel more familiar.
Now, for everyone who’s already familiar with the previous blog posts on the topic – let’s join forces and explore some Auto-Invest strategies, which will help you achieve maximum returns! We’ll split them into three categories.
P2P lending’s real charm is that it can be used as a long-term instrument for passive income. Actual results start showing if you’re persistent, and it starts paying off when you pass the one-year mark. Long-term investment strategies allow you to start conservatively and then experiment as you go (and as your comfort zone expands). For Auto-Invest specifically, we recommend you keep it as simple as possible – follow the K.I.S.S. rule.
To setup Auto-Invest in a way that matches your long-term goals, first, choose the interest rate range. You may try to invest in loans between 9% and 12%. Then, select the installment type. For a long-term investment portfolio preferably stick to 7-day installments. The frequent installment setup means you will receive your principal often and be able to reinvest it. In the long run, this will raise your profitability. Also, it allows you to exit from an investment much faster (especially compared to 30-day installment loans).
Last but not least – stick to a lower risk level. It’s best to choose loans that already have 3 or 4 installments paid. If there are no such loans available at the moment, then aim for loans with at least two payments already made.
Short-term strategies are perfect for when you want to test the platform and explore the scope of achievable profitability. Again, you can start with 7-day installments type. For your short-term investment, select 14% to 15% in EUR, or 12% to 15% in BGN, to be the expected return. Leave the field for loan status blank. That way you’ll invest in all loans, regardless of whether they’re current or delayed. Investing in delayed loans is a good idea if you want to reach higher profit because you will take advantage of receiving late fees on top of the interest.
Don’t worry about the funds you invest initially – the Buy-back guarantee keeps you safe in case a delayed loan you`ve financed goes default. If this happens, you will receive your money in 60 days and be able to reinvest it.
Finally – diversify, diversify, diversify. We suggest you split your available funds into small portions and, e.g., invest 10 EUR or BGN in every single loan. If you have a more substantial amount, like 10 000 EUR or more, you may try with 50 EUR per loan.
Two or more investment portfolios
Continuing with the same topic – if you want to diversify your investments and maximize your profit really, one auto portfolio is not enough. That is why we suggest you set up at least two.
We’ll give you an example of how to create two portfolios. So far, we were talking about more conservative strategies. Now let’s lay out an “aggressive” strategy which can help you achieve maximum return.
Let’s say you`ve deposited 3000 EUR. You want to invest them in loans with interest rate between 14% and 15%, so you go and set up this criterion in the filters. Don’t set any filters for status. Instead, invest in all loans, hoping to get a bigger chunk of delayed ones and thus gain additional profit from the late fees. As always, search for loans that have at least three paid installments. Lastly, opt for 7-day installments.
Having finished with filtering, you should now set up the portfolio size to be precisely 3 000 EUR. This way you will invest the whole amount at once. It’s good to set a smaller limit per investment, e.g., 20 EUR, so the total size of the portfolio is split between many loans.
Now, it’s time to set up the second portfolio. Again, only choose loans with 7-day installments. Also, keep the same interest percent range. The only different setting should be the number of paid installments – preferably set it to 5 or 6. Finally, set the portfolio size to be 300 EUR, for a start. And – you’re done! Later on, you can increase the size, but don’t focus on that immediately.
So, what will happen from now on? The second portfolio will collect all the profit from the first one and will invest it in current loans which are more likely to bring you higher interest. You take advantage of two benefits at the same time – the initial leverage of late fees from the first portfolio, and the higher probability of getting high interest from the second portfolio.
We hope you’ve found this useful, and we’re keeping our fingers crossed that your investments are successful! If you have any questions, please refer to our Blog, our FAQ section, or the lovely people from our Customer Support team at [email protected]!