2019 Update:
There is a newer version of this article, with updates in my personal Automated investment strategies on Mintos. I use this automated strategies via Autoinvest feature. You can review my investment strategy here: Mintos – automated investment strategies in 2019
The rest of this post is mostly reviewing the predefined automated investment strategies by Mintos. But it also includes my older strategies.
Small time investing
As you probably all know I love taking care of money. I started investing into peer-to-peer loans a year ago and since then I am trying to diversify my portfolio and invest more. Mintos is one of my favourite way of investing right now, as it gives me roughly 12% p.a. which is great. I am also thinking about starting my account on Crowdestate not to be so heavily Mintos oriented. Crowdestate is similar to Mintos, but specialise into funding real estates. Which is good, because the loan has always collateral (is backed up by something real).
Mintos is a p2p platform, where you can invest into loans to a specific people. They will pay the interest to you in a monthly payments.
But let’s get back to the main topic of this post – different strategies on Mintos – or officially called “Automated investment strategies”
Great new feature for new investors
Mintos delivered one of it’s biggest features of 2018 yet just a few days ago. Are you new to investing on Mintos and don’t know all the abbreviations and which loans to invest in? Then this feature might help you, because the main reason Mintos implemented it, was to help new investors to set up their autoinvest strategies. Long time ago you had to manually set up your search condition to filter only those loans you want to invest in. Only then you could actually invest them one by one. Few months later you could save your filters and create Autoinvest rules. You could set up how much risk are you willing to take (higher risk = higher gains), whether you want to invest in Personal Loans, Mortages, Business Loans, Car loans … It’s not hard, but I understand that completely new investor might be overhelmed and would not find the time to go through all the options and set up them properly. As all of us know “time = money”. Basically you need time to invest and to profit. Automated investment strategies saves your time. That is why Mintos introduced these automated investment strategies last week.
3 Automated investment strategies
These automated investment strategies are not only for the new investors of course. It doesn’t matter if you are just starting investing or you have years of experience in investing. Anyone can use them. So far there are three investment strategies you can choose from. However, I think we can expect more of them in future. One of the known limitations now is the possibility to invest only in EUR. Mintos guarantees they will implement automated investment strategies also in other currencies later.
1. Short-term strategy
Users who will want to invest their money for only few months, but still would like to well-diversify their portfolio to balance the risk and return. This autoinvest strategy will invest only in those loans with maturity 1-3 months and annual gross interest rate from 8%. Both loans with and without buyback guarantee will be included.
2. Diversification strategy
This strategy is perfect for investors building the diversified portfolio made of loans from different loan originators, countries, loan types and maturities. One of the most basic – and effective – investing approaches for minimising total risk, is to invest in loans with different degrees of risk. The diversification strategy will automatically invest in all loans available on Mintos. Expected annual gross interest rate is 12,5%.
3. Secured loan strategy
Investors who like to invest in something real, will most likely invest in this automated investment strategy. These loans are mostly long-term and secured by collateral. Meaning that if borrower fails to repay his/her debt the loan originator will get the collateral and could sell it itself. The Loan-to-value (LTV) ratio of loans used in secured loan strategy is less than 75% and the expected annual gross interest rate is 12,4%.
If you want to go straight ahead and create your own investment strategies – follow this link.
How to create new automated investment strategy
Easily. Go to “Auto Invest” section in the main menu. Click the button below “Create New Auto Invest Strategy” and you will see “Mintos Investment Strategies“ on the next page. This button will redirect you to the page, with these 3 options (strategies) described above. Here you can choose which one you will start investing with. As mentioned earlier, so far you can only invest in euros, but new currency possibilities will be surely available soon.
How these automated investment strategies work
Once you finish the set up of new investment strategy, don’t forget to enable it. Once the auto invest strategy is activated, it may take few minutes (up to 30) to start with investments. You can set up the Portfolio Size and Investment in One Loan. I like to keep the amount in one loan on the minimum, 10€. It enables you to invest in as many loans as you can and thus diversify even more. It’s never a good thing to have all the eggs in one basket, right? You might want to also exclude those loans in which you have already invested (doesn’t matter if manually or automatically). It would just increase your investment in that one loan and you don’t want that usually.
My personal recommendation
I don’t know the best solution, however I like the Secured loan strategy probably the most. Actually, I would combine all of them. For example 25+25% of my whole Mintos account into Short-term and Diversification strategy and the rest 50% would be invested in Secured loan strategy. This portfolio would be diversified well enough, so even if one or two loan originators would be in troubles, your other investments will overcome it. This is of course just a quick recommendation, if you would like to discuss it more, feel free to leave a comment below this post or contact me on mail or on Facebook and I will help you setting up your automated investment strategies.
In accordance to the full honesty here in my blog I would like to share my personal AutoInvest rules in the picture below. Please don’t take them as any financial advice. Just to show you, how I do it.
If you are interested in peer to peer lending, and you are from EEA/EU or Switzerland, consider investments via mintos.com platform, and register for investor account here.
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