The world outside is nothing like we have experienced earlier. The global economies and markets are unpredicted, many investors are feeling agitated. What should I do as an investor – that is a question we have been hearing a lot these days.
In the past, the investors have faced some big crises in their journey for eg:
1987 – The stock market fell the most
1992 – Harshad Mehta scam, the stock market tumbled more than 55%
2000 – Tech bubble burst, markets fallen by over 60%
2008 – Global financial crisis hit the world hard
2020 – Covid-19 crisis
And hence, worrying is not an option, your patience will get tested, confidence will shake many times, but you must believe in one fact: humans have fought many battles earlier and have not only survived them but also thrived.
P2P is one of the best options to be considered by the investors since it provides certain benefits during such crises which no other investment can provide. The platforms provide a verified borrower which allow screening mechanism that ensures more diversification and better returns. It also offers a passive income while diversifying their investment exposure across a range of borrowers, which potentially lowers the risk of default. Extending the funds to borrowers on a P2P platform offers investors the opportunity to gain exposure to a diversified portfolio of borrowers that have been vetted by the P2P platform. The interest rates achieved in a P2P environment are better than conventional interest rates, particularly in the current low rate environment in developing countries like India. The investor can opt for the risk profile they are most comfortable with, understanding that the higher returns offered by borrowers with lower credit ratings will expose them to higher potential risk.
Considering the above benefits, one must sanely invest in P2P Lending and much continue investing in spite of the uncertainty situations of COVID-19 crisis.