Tag Archive for Stock Market

Investing in Times of Volatility: A Look at P2P Lending

stock market

2020 has brought on its fair share of volatility, as was evident with the coronavirus stock market crash in March, where the S&P 500 index fell by more than 30% after reaching record highs just the month before. This is a harsh reminder of just how volatile the stocks and shares market can be at times.

If you?re looking to diversify your portfolio with alternative investments that are less prone to volatility, P2P lending could be a viable alternative to add to your list of choices.

stock market

How Does P2P Lending Work?

Peer to Peer platforms offer quick, personal and accessible loans to individuals and business owners through an online platform. Additionally, P2P investors in the UK can make tax-free returns* on their investment as a result of the government?s IF-ISA arrangement.

This arrangement allows investors to invest up to ?20,000 within a tax year, without having to pay capital gains tax on returns accumulated during the course of this period.

A Viable Alternative in Volatile Times

Peer to Peer lending is a viable investment alternative in volatile times.  Look at how it performs relative to market volatility, as well as considering its direct involvement with the property market.

Providers continue to mitigate investor risk by maintaining high levels of due diligence on new loan approvals*. They also provide additional support for borrowers who may be struggling to meet payment deadlines.

P2P Investments and Volatility

P2P investments are less prone to volatility as a result of borrowers needing to service their loans regularly*. While the coronavirus pandemic may mean that payments are delayed, this won?t necessarily have a bearing on the investors? payout at the end of the day*. The same can?t be said for all types of investments.

Investments Secured by Property

P2P lending allows for investment into loans that are secured by property. If the borrower defaults, it will only take a few months for the P2P platform to sell the property in order to recover costs*.

Finding a provider that holds first legal charges (meaning they are first in line to take control of the property in case of a default) is a great way to get additional peace of mind**.

property market

Increased Support for the Property Market

It?s also useful to note that support for the general property market has remained steady, even amidst the pandemic.

The FCA has announced a three-month payment holiday for homeowners and landlords. The Bank of England has also cut its interest rates for mortgages to a historic low of 0.1%pa, providing additional short-term relief.

Stringent Credit Committees

P2P lending platforms have stringent credit committees to vet each loan before it is approved.  Platforms are covering all bases before approving new business loans to ensure that they are viable. This is another means of increasing investor confidence.

Additional Support for Borrowers

Peer to Peer platforms tend to offer a more personalised service than banks, working with borrowers to help them find suitable solutions in unpredictable times.

Additional support is typically available through the Collections team of any provider – they can help find an appropriate solution in case a borrower is struggling to meet payment deadlines***.


Getting Curious About Other Investment Types

In times of uncertainty, and especially with the increased volatility of the stocks and shares market during the coronavirus pandemic, investors have a responsibility to get more curious about finding alternative options to continue growing and diversifying their portfolios.

As the key factors in this article suggest, P2P lending is one of the prospects worth keeping in mind during your decision making process.

*Capital is at risk.  HMRC Rules Apply. 

**Securing investments against UK property does not guarantee that your investments will be repaid and returns may be delayed.

***Failure to meet the repayment criteria of a loan could result in the security being repossessed

4 Simple Ways to Start Investing in the Stock Market


investing in the stock marketFor many people, investing in the stock market is an intimidating proposition. It is well-known that you can lose money in the market, so committing a significant portion of your personal assets to this venture may make you more than a little nervous.

While it is true that you need to be careful when stepping into the world of stocks, complete avoidance of the market is unwise. Making smart and balanced decisions are the best route to take when it comes to investing in the stock market.

The following list contains four simple ways that you can use to get involved in the stock market as a total beginner.

Start Small

This is the most important point, and it should be an obvious one. If you are just getting started in the market and you don?t exactly know what you are doing just yet, start small – regardless of the amount.

Open a brokerage account?with the minimum that is required to get started, and purchase your first couple of stocks mostly as an educational experience. In time, you will get more and more comfortable with how the market works, and you will feel more confident in your investments. Many online brokerages, such as Motif Investing, allow you to start with as little as $250 or less.

Read, Read, Read

There are countless books available [easyazon_link keywords=”investing books” locale=”US” nw=”y” tag=”wisedollar-20″]on the topic of stock market investing[/easyazon_link], so pick out a couple of them and start reading.

It is important to remember that no one ?owns? the markets, and no one has mastered the task of picking winners ? so you don?t want to take the advice of any one book like gospel. Instead, take bits and pieces of advice from a variety of books until you develop your own investment strategy that you are comfortable using.

Invest What You Can Lose

At first, you are only going to want to dedicate a small amount of your money to the market, so decide on this number by thinking about how much you could afford to lose without affecting your lifestyle. Obviously you don?t want to lose the money, but it is smart to think about investing in terms of the worst-case scenario.

Knowing that you will be fine financially even if your account goes to zero is a comforting feeling while you are learning the ropes of investing in the market.

Play it Safe

Buying traditional stocks is only one way that you can get involved with the market. You can also invest through your 401(k), mutual funds?or a variety of other investment vehicles.

No investment is 100% guaranteed to provide you with a return, and all investments, even those beyond the stock market, should be considered a risk. However, you can take the least-risky options at first to build up a base portfolio before moving on to more advanced methods that provide a higher opportunity for a big return (if you wish).

Instead of thinking of the stock market as a lottery ticket that could make you rich, it is wise to think of it as a long-term strategy to grow your wealth. Making safe and conservative decisions over a long period of time is likely to offer the best results.


Have you ever invested in the stock market? How did you get started investing in the stock market? What is one thing that held you back from investing in the stock market?


Photo courtesy of: FirmBee

5 Investing Excuses You Shouldn’t Give In To

Investing Excuses

graph-163509_1280Everyone knows that it is a good idea to invest your money for the long term. You don?t have to play the stock market actively in order to be invested ? there are plenty of passive, simple ways to allow your money to work for you. Whether you want to take on very little risk, or you would welcome risk in order to aim for a big profit, there are plenty of investing options for everyone.

Many people simply sit on the sidelines and come up with excuse after excuse for why they haven?t yet started investing. Perhaps, you have used some of these excuses yourself. Take a look at the following list of five investing excuses to see if any of them sound familiar. Once you better understand why these are just excuses and not valid reasons, you may be a step closer to investing in the stock market?yourself.

Excuse #1 ? It?s Too Complicated

This might have been a valid excuse twenty years ago, but not today. With the wealth of investing information that is available online today, and much of it for free, ?there is no reason you can?t learn what you need to know. Even if you don?t care to get into the complicated world of advanced trading techniques, you can educate yourself on things like index funds?and mutual funds?so that you can make safe and smart choices.

Excuse #2 ? I Don?t Have Thousands of Dollars Available

You don?t have to invest thousands of dollars right up front to start?investing. It is possible to open an account with as little as a few hundred dollars, and you should be able to add to that account a little bit at a time as you have money become available. The important thing is to just get started, even if the numbers are small to begin with. In fact, you can open an account with Motif Investing for as little as $250?to get you started investing.

Excuse #3 ? I’ll Lose Money

This is an investing excuse I hear nearly every day. Investors see the stock market go down and they fear that they’ll lose all their money. Of course, it’s certainly possible that the you’ll lose everything, it’s not very probable. The market, as a whole, has had a positive return each decade for the past century – aside from The Great Depression. In the case of the Depression the loss was slightly below one percent for the entire decade. The moral…the market goes up and down – don’t let fear paralyze you from growing your money.

Excuse #4 ? I?ll Do It Next Year

This is probably the most common excuse, but it is one that you should ignore. Starting next year will never happen, as you will just continue to put it off. Take a stand against your procrastination and open your investing account right away. Plus, the benefits of investing are even greater the younger you are?when you get started investing.

Excuse #5 ? I?d Rather Keep It in the Bank

You are never going to make the same kind of return by keeping your money in a savings account that you can by engaging in some simple investments. By placing your money in a low interest savings account, you will be missing out on a great opportunity to grow the size of your account passively over the years.



Have you heard any of these investing excuses??What investing excuses have you been guilty of? What are some other reasons why people stay away from investing?



Photo courtesy of: Pixabay


How to Start Investing When You?re Young

start investing

start investingEven if you are 30 years or more away from retirement, it is never too early to start investing. In fact, I think you should start investing when you’re young – the younger the better actually. Keep the following stat in mind; according to the Center for Retirement Research, those who wait until 45 to save for retirement (assuming retirement at age 65) have to save three times as much as those who started at age 25.

With that in mind, if you are able to start investing when you’re young then you should by all means do it. It is also helpful to know that you will very likely have needs later in life that aren’t related to retirement planning?where you will need a sizable amount of money and thus another reason why you should start investing in the stock market when you’re able to.

It goes without saying that there are risks when it comes to investing, but in order to grow your money?some?risk is going to need to be taken. With all of this in mind, here are some tips to help you get started investing when you’re young.

Start Off Small

While you might have big dreams of accumulating significant wealth from your investments, you have to start somewhere ? and that usually means starting out small. There is a good chance you will make a couple mistakes along the way, so don?t expose too much of your money until you are confident that you know what you are doing.

If you’re investing on a limited budget?you might feel like you don’t have the money to invest. This, however, is a myth in my opinion. There are many brokerages out there, such as Motif Investing, where you can open accounts for as little as $250. If you can put away $25 or $50 per month you can reach that amount in under a year. If you’re looking for other options, make sure to check out my best online brokerages?page to see what else is out there to choose from.

Get Some Help

Unless you have an education in investment-related topics, it could be a good idea to get help from someone to help get you started. That can range from getting assistance from a friend or family member who is an experienced investor to using resources made available by your 401(k) plan provider.

The one caution I’d give is to not run out and hire a financial advisor when you’re first starting out investing. There are some good ones that do help those just starting out,?but you also need to be careful as there are also many out there who are compensated by directing you towards one investment or the other. The point being to do your homework before potentially hiring someone.

Read Plenty When You Start Investing

While professional help can be helpful that doesn’t free you of responsibility. One great way to educate yourself as you start investing is to read as much as you can about investing. There are quite a few investing books for beginners?out there, though I tend to direct most to [easyazon_link asin=”0393340740″ locale=”US” new_window=”default” nofollow=”default” tag=”wisedollar-20″ add_to_cart=”yes” cloaking=”default” localization=”default” popups=”yes”]A Random Walk Down Wall Street[/easyazon_link] as it’s the best book out there (in my opinion) that helps boil down some very complex topics and make them simple to understand.

I know that reading about investing might seem overwhelming or boring, but don’t let that hold you back. You want to be able to educate yourself as to the basics so you can get started investing more effectively.

Have a Long Term Plan

Investing should almost always be done with a long term goal or vision in mind, so try to map that out for yourself as soon as possible. That vision doesn?t necessarily have to be a grand one, either ? it could be as simple as trying to accumulate enough money to send your kids to college when the time comes, or to help you purchase a vacation home as you get closer to retirement.

Whatever kind of goals you have for you and your family later in life, starting investing when you are young is a great way to bring them within reach. Start small, ask for help, and educate yourself as much as possible to make your investing experience a good one.


How did you start investing when you were young? Do you have any regrets when it comes to investing??What motivated you to start investing in the stock market?



Photo courtesy of: Michael Daddino

Investing Beyond the Stock Market: Alternatives to Consider

stock market

stock marketWhen you ask many, they consider investing as only dealing with things like stocks and bonds. While they may not invest directly in them, they do so through a 401(k) plan or in various ETFs or Mutual Funds. Those are great ways to invest in the stock market, and do quite well for the large majority of individuals out there. However, there are several other alternatives to consider to the traditional investing model. Depending on your risk tolerance, these can provide opportunity to build on what you’re already doing to further maximize your wealth building.

Before I go on with some of these alternative investments, I will point out that they can be incredibly risky if you’re not educated as to how they work. Even then, they can carry significant risk. Risk isn’t?bad,?per se, but it can be if you’re not fully educated as to how different investment vehicles work. With that out of the way, we’ll take a look at some of the alternatives to strict investing in the stock market.

Investing in Options

Options investing is likely my favorite alternative to the traditional model of investing in the stock market. In fact, there are people that only trade options. What I like about options trading is you have a choice between going ?more conservative vs. going more risky. The other thing I like about options is that it can require little in terms of cash outlay in order to invest in them. Why is this? It’s because you’re not investing directly in a stock, but the right to buy or sell a given stock.

You might be asking why you’d invest in something like an option. One of the main reasons people do is because it gives them access to a stock that trades too high for them to purchase. I did this several years ago with Apple. I bought the right to buy 100 shares at $650. The stock was around $400 at the time, but I had a feeling it would go up. The stock went over $650 and I turned around to sell the option. This allowed me to net a little under $4,000 on the trade! That is definitely not the norm, but was a nice gain nonetheless.

Spread Betting

Another option to the stock market to consider is spread betting. Through spread betting, you’re not buying a holding rather you’re betting on whether or not a given product will fluctuate in value. This method of investing has grown in popularity over the past few decades, though like options trading is not really for the weak of heart. There are a number of reasons for that, largely going back to the speculative nature of it.

What I like about the idea of pursuing this route as an option is that you can use leverage to speculate on a number of investment products like indices, commodities, treasuries, etc. If you’re advanced enough in your investing knowledge, this can be a nice way to grow out a small part of your portfolio. As with any investments you pursue, you will want to make sure you pick the right platform for you in order to find one you’re comfortable with.

Forex Trading

The other alternative to traditional investing in the stock market is forex trading. With forex trading you’re trading in currencies from around the world. If that sounds somewhat risky to you, that’s because it is. 🙂 However, I’ve seen many people do quite well at it. One major reason why investors choose to trade forex is that currencies trade nearly 24/7 and can do so from around the world.

Like with the previous two alternatives, there can be considerable risk associated with forex trading, but there can also be decent reward. If you’re looking to do some forex trading, I would recommend finding an online brokerage which offers paper trading of forex. There are a number that do and can be a great way to try it first without the fear of losing your shirt.


Investing in the stock market, or anything else for that matter, can carry great risk but can also provide great return. Before you choose an investment vehicle make sure you educate yourself as to how it works in order to make sure it fits with your risk tolerance.



Photo courtesy of: Perpetual Tourist