Grupeer is proud to have advanced Auto-invest functionality, which allows our clients to earn a stable passive income with no interruption. If you are not using any Auto-invest strategy, you are missing out. But if you are using it, how to set up criteria to maximize the earning? Read this article and find out how to become the master of passive investing!
Why do you need Auto-invest?
To begin, let’s clarify- why would you need an Auto-invest strategy active in the first place? Well, this eliminates the need to constantly check the website for updates and whether the new “hot” projects were added to Grupeer platform. Some projects are in high demand by our customers and are sold out very quickly. If you don’t want to miss out, you should set up an Auto-invest. This way, your money automatically will be invested once a deal matching your investment criteria will become available on the peer-to-peer platform.
The most important part of setting up an Auto-invest strategy, is to think about your investment goals, limitations and criteria. Grupeer allows you to choose between ten different settings to help you make a bespoke Auto-invest approach.
This guide should be used as an example and you don’t have to blindly follow the recommended settings. You should use these recommendations as a hint into setting your own strategy specific to your goals. This example is focusing on the approximate portfolio size of Eur15,000. Depending on the actual size of your portfolio on Grupeer platform, you adjust the recommended settings according to your preferences.
On Grupeer the personal loans are grouped in one big tranche, which represents many individual loans. So, the risk of investing in this loan deal is considerably lower than investing in a personal loans with direct exposure to the risk of default of the borrower. Therefore, in order to benefit from investing in Grupeer, you should set your “Max amount per loan” higher, than you would with the platform, who places many individual loans.
Many ask us, why the default rate is zero, especially with personal loans, which in general have a higher risk profile. Well, this is because we finance the pool of individual loans, where defaults are managed internally by the loan originator themselves.
So, this is useful to bear in mind, when allocating the maximum amount per project. For example, if your account balance is Eur15,000 and your maximum amount per loan is set to Eur50, you will get very few investments made, as last month we published just over 180 deals (so, maximum only Eur50*180=Eur9,000 would be invested, given the other criteria match.) This would leave minimum Eur6,000 sitting on your account, without earning any interest!
Money sitting not earning any passive income is not a great idea. Especially, when you have an above average interest yield offered, one click away. After all- earning impressive passive income for you is our core business and key competitive advantage. There- we revealed this insight, so from now on bear it in mind when setting up your Auto-invest.
5 strategies, every P2P investor should consider:
So, once you have decided on the budget, you can create up to 10 Auto-invest strategies. On average our clients create three to four strategies. We recommend setting up five strategies. The important part is to set the criteria in such a way so that they don’t contradict each other but complement in the best way possible. Below is the screenshot of already created strategies, we are going to discuss each of them in detail further on. Please note, that the left column sets the priority of each strategy. This means that if you have money on the account the strategies with the highest priority will work first (1 is for highest, 10 is for last).
When all your created strategies have been executed, Auto-invest stops after reaching limits set by you. If your account balance is still positive and you would like to invest your money again, following the criteria of one of the strategies, you have the “invest in old” button available. By pressing it, the same strategy will be executed again. So, let’s look in detail into each strategy that we have created.
1. High ROI
High ROI stands for the strategy with a high-interest rate. Who doesn’t like high returns? That’s right, everyone does, so this strategy has the highest priority.
The most important criteria here is the interest rate from 14% to 20%, we also tick the “including Cashback” option, to benefit from the temporary offers and promotions. We press “select all” option for both- countries and loan originators, as these criteria are not important for this particular strategy. As you can see, the “deal match” calculator says that at the moment there are no deals, matching this Auto-invest strategy.
This is not a surprise, as the high-yield loan deals are the most demanded on the platform, so we recommend not to set any limits on this strategy- the more invested at this rate the better. Additionally, the limit per loan deal should be set at Eur1000, as there might be only a few projects at this interest rate.
Repayment type is set to “all”. If you would like to learn more about the repayment types, you can read an article on our blog here.
Currently, we have the deals only with BuyBack Guarantee so this is the only option that can be selected.
The short strategy stands for short-term projects. This is the second most important strategy, as the sooner you get repaid the better, right? Here we choose a maximum term to 6 months. The interest rate interval has a wider selection, as we already benefited from high interest in the first strategy. Now it is time to make money quickly! Same settings for other criteria, only here we choose the maximum amount per loan at Eur2000, as the money will work and be returned quickly. Again, only 0 deals at the moment matching these criteria. But, by setting up the Auto-invest will allow you to be among the first, who invest in this “hot” deals.
3. Development Norway
This strategy is self-explanatory. It invests only in development projects in Norway. So, the country is chosen to “Norway” and the loan type is set to “development”.
As the development projects take longer to repay we set term to a maximum of 36 months. This is the third strategy in priority, so we put a limit of Eur5000 per strategy and maximum Eur200 per loan. As Grupeer is monitoring the expenditure during the construction and takes an active part, we give loan to the construction company in tranches, to reduce the risk.
4. Other Development
This strategy is supposed to invest money in all development projects which are not in Norway. All countries are selected besides Norway.
Only “development” is selected from “loan type”. Due to being forth in priority line, the limit per the strategy is Eur2000 and Eur200 per project.
The fifth strategy is to “polish” the selection of investments. This strategy aims to rebalance the portfolio. As we had two strategies before focusing on development projects, here we choose all, but the “development” in the “loan type criteria”.
The interest rate is set from 10 to 15 because the high interest rate already worked through the first strategy. The limit for this strategy is set low- to Eur1000 and the maximum amount per loan is set to Eur100.
We hope that you have found this guide useful for setting up the Auto-invest strategy, that would help you achieve great returns in the future. Of course, the discussed above options are not the only ones- you can set Auto-invest for your favorite Loan Originators, for example. Let us know what you think and share your Auto-invest strategies!