There is no doubt that 2020 has challenged our lives on so many aspects. While COVID-19 pandemic turned our daily habits upside down, businesses around the world faced an unexpected turbulence and were forced to implement an emergency survival plans. 2020 for P2P industry started with some unfortunate news on several platforms’ collapse which was not helpful when the industry got hit once again – now by the pandemic. As this challenging year has rolled into its last quarter, we reached out to the finance and P2P blogger Denny Neidhardt who is also an author of Re:think P2P-Kredite blog to find out his perspective on 2020, recent events and P2P industry development prospects.
How has 2020 been for you? Has it in any means changed your perception of P2P lending industry and opinion leader’s role within it?
2020 has definitely made me rethink a lot of aspects in my life, both personally as well as financially. Regarding the p2p lending industry, I think this year has revealed a bit more the nature and true colors of some platforms. Unfortunately, not always for the better. Further, I believe it showcased once again the necessity of having a proper regulatory framework, in order to avoid misconduct of investor funds. Regardless, I think that also investors need to step up again and take on more accountability for their investment decisions instead of blaming others.
As for me personally, I also felt a bit more weight and pressure on my shoulders. Although I haven’t been affected directly by any scam – and I am also considering myself to be one of the more critical and precautious finance bloggers – there is a bigger sense of accountability for the content that I publish. It was tough at times, because many investors don’t get to see the politics that are happening behind the curtains. I would be lying so say that I didn’t think about quitting. But at the same time, I also felt like I owe people to continue to dig deep and reveal stories that nobody else wanted to pick up on.
Has pandemic changed your investing preferences?
I don’t know if it was due to COVID-19 or if it just coincided, but I did adjust my investing preferences. In general, I would describe this as a more conservative approach. Instead of stock picking and trying to time the market, I started to set up a monthly savings plan where I invest in a few single stocks but mostly in a broader and global index fund.
Regarding p2p lending, I figured out that buy & hold isn’t my preferred way of investing, but rather to respond to the overall economic forecast. With the uncertainties due to pandemic, I felt better taking some air off of my p2p investments.
What are the advantages of P2P compared with other investing options?
It depends a bit on which asset class you compare P2P with. In a more general approach, what stands out to me is a relatively low entry barrier, easy and passive administration, good predictability of cashflows and a certain degree of liquidity.
What steps should investor follow to choose trustful P2P platform/-s?
I could write a book about this question (which I already did somehow). Well, a few things to look out for:
- Does the platform operate in regulatory environment?
- Is segregation of funds ensured?
- Who owns the company behind the platform and what is the shareholder background?
- Credible and experienced people in management?
- What is the track record of the platform?
- Which degree of transparency is shown (e.g. audited annual reports)?
How has been your investing experience with VIAINVEST until now?
The main reason why I started to invest at VIAINVEST in the first place, was that the VIA SMS Group mother holding has had a great track record in performing sustainable and profitable in a highly regulated consumer loan market. Adjusting to new regulations just as the company did in Latvia last year, made me think that VIAINVEST is a great opportunity to diversify my p2p investments among only a few others.
Ever since, I enjoy that the platform seems to act very reasonable and reliable in their business. A few more insights during pandemic would have been nice, but I take this approach over constantly adjusting terms or user agreements any day.
What would be your advice for investors to keep calm during these turbulent times?
With only 31 years of age and a few years of investing experience, I honestly don’t know if I am the best person to ask. And I think every person is somehow different is responding to this highly unusual time we have at the moment.
But I guess I would try to understand why I have started to invest the way I did in the first place and if that “business case” and that thought process behind that strategy is still the same. If it is, why not sticking to it? If not, there is no shame in adjusting. If enter- and exit scenarios are clear, act accordingly.
Denny’s interview with VIAINVEST Platform Lead
Denny’s review of VIAINVEST
Denny’s Facebook community