Why I set up automated investment strategies in 2019 on Mintos
I am investing into P2P loans on Mintos almost 2 years now and I can’t imagine it without using automated investment strategies in 2019. Autoinvest is one of the core things any investor on Mintos uses. It saves so much time. I currently sit roughly on 250 active loans and I invest in 2 different loans every day on average, due to the pretty rapid early repayments. If I didn’t use any autoinvest rules, there would be 500-600€ piled in my account at the end of every month, waiting for manual investing. This is where automated investment strategies come into play. They save me so much time and I don’t have to log into my account every day to invest. Autoinvest makes Mintos a passive investment. The investment strategies and rules need a little bit of time to set up properly, but are well worth the time investment.
My automated investment strategies in 2018
When I first started to make my own automated investment strategies I was looking purely at the interest rate and loan term. I was aiming at 13-15% interest for 1-3 years. I didn’t pay much attention to the loan originators in my original automated investment strategies on Mintos. Basically, the rules looked a lot like the Mintos official automated investment strategies (My review of them is in this article).
Early on in 2018, Mintos started to pile more and more loan originators into the system. I wasn’t, and I still am not, a huge fan of this. In my eyes it lowers the creditability of the whole platform. For example, why should a company like Metrokredit be listed on Mintos? New company, founded in 2017. Mintos rating C+, with loan portfolio less than a million euro and Effective APR charged to borrowers: 426%. I am rarely rude, but this company seems like they are ripping their customer off. I want steady income, and that comes in a win-win scenarios. So people can pay off their debt and I get my margin on it. I don’t want to invest through a company, which charges their customers ridiculous fees. I am looking for a win-win situation between the loan-originator and it’s customer (borrower).
That’s why I decided to update my Mintos automated investment strategies in 2019
Changes in my Mintos automated investment strategies in 2019
There will be 3 major changes in my automated strategies happening in 2019:
- Focus on loan-originators
- LTV (Loan-to-Value) indicator
- Shorter loan term
1) Focus on loan-originators
As explained above, I wanted to have a full control over in which loan-originators should I diversify my money. I did my research and decided, that I will invest only into loans, funded by one of these originators:
- ID Finance
You can see, that the main portion of my auto invest portfolio is based on the loans by Mogo. Mogo provides also personal loans, but the main sector is car loans. I like investing into car loans via Mogo, as it’s very reliable and save. Mainly due to the LTV, which can (and should) also be integrated in your automated investment strategies in 2019.
2) LTV (Loan-to-Value) indicator
Loan-to-Value is a percentage, of how much money a borrower wants to borrow, compared to the value, of the thing they buy. For example Adam wants to buy a car, which costs 5000€. He already has 1000€ in savings, so he needs 4000€ to borrow from Mintos. His Loan (4000) to value (5000) is 4000/5000 = 0,8 (80%). This way, it’s easy for us, investors, to select only those people, who already showed the ability, they can save some money for the future. I like to buy loans with LTV 50-75%.
Update: as of February 2019 I made my loans even more strict and lowered the LTV to max 50% for my automated strategies in 2019
3) Shorter loan term
With the general idea, that the financial crisis might come in the next couple of years, or even months, I think it’s time to play safe. Mintos sometimes offer a “Cash back bonus”, when you buy loans with loan term 48m+. That’s four years from now, quite a long time and none of us knows, what will be his/her situation.
I haven’t spoken about the geographical diversification, yet. When I set up my automated investment strategies for 2019 I also tried to diversify my loans within several countries in Europe. So when there are any financial troubles, not all my eggs are in one basket.
My Mintos Automated investment strategies in 2019
This is the list of all 10 automated investment strategies on Mintos. In general I follow those 3 rules I mentioned earlier and try to find short-term loans from qualified loan originators. Needless to say, all of my loans come with a buyback guarantee, which is the most critical rule.
What are your investment strategies? What is working well for you and would recommend to others? Thank you all for the support.