Highly Diversified Investment Strategy
A Guide to Diversify Investments
Diversification is an investment approach that involves spreading investments across various asset classes, industries, and geographical regions to minimize risk and optimize returns.
This Guide to Diversify Investments focuses on increasing safety, reducing risk, and optimizing profits.
In this diversified investment strategy all the platforms have licenses and a trustworthy history. Additionally, they provide a broad range of diversity, and the interest rates are high.
If the EUR is not your local currency, I recommend using Revolut Bank for zero-fee exchange.
Please note:
- All the auto-invest settings below are configured in the desktop versions, not in the app.
- The suggested investment amount is based on every €10,000 totally invested.
- If you want to automatically increase your investment every month and maintain a balance between diversification, liquidity, and safety, you should take a look at the Automatic Investment Strategy.
Table of contents
The investment platforms
Mintos
Mintos is the largest crowdlending marketplace, featuring a vast number of loan originators, countries, and loan types, providing the very best diversity in this strategy.
Aditionally Mintos offers fractional bonds and ETFs for €50 each
If you only want to invest in one platform, your best choice would be Mintos
Investments:
- Deposit: €3,000
Choose between
Core loans (recommend)
And
Ordinary loans
Autoinvest settings for ordinary loans
- Currency: EUR
- Market: Primary
Right below on the right: - Mintos Risk Score: 7-10
In the same line to the left: - Company: Select All in the check box above
Scroll down to: - Interest Rate: 9-30%
- Remaining term: 0-24 months
- Diversification: Keep the dynamic setting
- Portfolio target: €3.000
- Finish with: Save and activate
Manual Investing
Mintos Core ETF
- Invest about €500
- Mintos Core ETF is a single ETF that contains a package of about 7 ETFs, each comprising many shares or bonds. Investing in this single ETF offers high diversification
- Since prices can fluctuate, it is recommended to invest gradually to mitigate the risk of buying when prices are too high. Ideally, invest €50 every month. If you prefer an annual investment, consider autumn when prices are typically lower than around December and January.
Mintos Fractional Bonds
- Purchase a few Fractional bonds for €50 each
- ATTENTION: If fractional bonds are unavailable on the Primary Market, don’t be tempted to purchase on the Secondary Market as prices tend to be excessively high. Instead, await new offers on the Primary Market.
- Additionally, purchase new bonds when existing bonds mature after a few years.
+ General information –
- Security level: High compared to average crowdlending platforms
- Diversity: The very best
- Loan types: Business, Personal, car rental and loans,
- Average interest rate: Approximately 9%-12%
- Loan term: 0 – 24 months.
+ Withdrawal –
- Stop your autoinvest portfolio:
- Choose Loans in the top menu
- Scroll down to your portfolio
- Click on the 3 dots to the right and choose Stop Investing
- Increase your available balance in these ways:
- Wait for loans to be paid back
- Sell some of your loans on the Secondary Market with a slight discount.
- Then, withdraw the desired amount from your available balance:
- Click on your available balance at the top right of the page.
- Choose Withdraw Money
- Restart your autoinvest
Visit Mintos here (affiliate link)
Peerberry
Peerberry offers auto-invest in real estate, which is challenging to find elsewhere. It’s one of the highest-rated crowdlending platforms available.
Settings
- Deposit: €2,000
- Autoinvest 1: Real estate
- Choose: Create new auto invest strategy – Peerberry plan – Real-estate portfolio
- Strategy size: €1.500
- Click Invest
- Autoinvest 2: Backup in case there are no Real estate loans.
- Choose: Create new auto invest strategy – Peerberry plan – Short-term portfolio
- Strategy size: €1.000
- Click Invest
- Autoinvest 3: Backup in case there are no short-term loans.
- Choose: Create new auto invest strategy – Peerberry plan – Long-term portfolio
- Strategy size: €1.000
- Click Invest
+ General information –
- Security level: Above average
- Diversity: High
- Loan types:
Long-term: Real estate, Leasing & Business loans.
Short-term: Personal loans - Average interest rate: Approximately 9% – 10%
- Loan Term: 1-60 months
+ Withdrawal –
- Stop your autoinvest portfolio:
- Wait until some of your loans has been paid back
- Then withdraw the amount you want:
- Click on your available balance at the top right of the page
- Choose Withdrawal in the right side in the top menu
- Restart your autoinvest
Visit Peerberry here (affiliate link)
Debitum
In Debitum you can increase your diversity and safety by investing in business loans. On top of that you can contribute fighting the climate change by investing in sustainable loans.
Settings
- Deposit: €2,000
- Autoinvest settings:
- Maximum investment amount: 20% (= €20)
- Loan originators: All (Sandbox provides sustainable loans in Electricity, Forestry and agriculture)
- Enable auto invest?: Yes
- Auto invest 1h/day?: No
- Finish with: Save
+ General information –
- Security level: High compared to average crowdlending platforms
- Diversity: Limited to 5 loan originators, but all loans are bundled with several loans, increasing diversity.
- Loan types: Business loans including sustainable investments
- Average interest rate: Approximately 11%-14.5%
- Loan term: 5 – 24 months.
+ Withdrawal –
- Stop your autoinvest portfolio:
- Wait until some of your loans have been paid back.
- Then, withdraw the desired amount from your available balance:
- On the Overview page, scroll down and choose Withdraw on the left.
- Restart your autoinvest
Bonus:
- 25€ to both you and me when you have invested 1.000€ or more
- Get your bonus.
Or Visit Debitum here (affiliate link)
Read about sustainable investments at Debitum here
IuvoSave
On the crowdlending platform Iuvo, you can earn an interest rate of 5, 6 or 7% for terms of 3, 6, or 12 months when using their High-Yield Savings Account called IuvoSave.
Settings
- Deposit: €2,000
- Choose Save in the left menu
- Then choose 3, 6 or 12 month maturity term
- Choose Invest maximum
+ General information –
- Security level: Above average
- Loan types: High-yield savings account
- Interest rate: 5, 6 or 7%
+ Withdrawal –
- You can withdraw at any time for a fee of 1%
- When the maturity term has ended, your deposit and interests will be returned to your Iuvo account as Available Funds
- You can then choose Withdraw in the menu at the top right.
- Or you can choose to restart your savings account – or choose another maturity term
Bonus offered by Iuvo
- When you invest €100 or more within 3 months, both of us receive a 2% bonus on your investment.
- Send an email to safeinvest@clearit.dk, including your name and indicating that you would like a bonus in Iuvo.
Read about the crowdlending part of IUVO
Profitus
Profitus provides loans in real estate in the three Baltic countries, with the majority in Lithuania. I have been investing since June 2023, and everything has been running smoothly.
Investment
- Deposit: €1,000
- Manually invest the minimum amount of €100 in each available project.
- If there are too few projects available, you can consider investing in real estate at CrowdPear or Fintown.
- Additionally, at least once a year, reinvest the repaid loans. (An auto-invest feature is planned by the end of 2024.)
+ General information –
- Security level: High compared to average crowdlending platforms
- Diversity: Many different loan providers. But only real estate an three different countries
- Loan types: Real Estate
- Average interest rate: Approximately 7%-13%
- Loan term: 12 months and sometimes less.
+ Withdrawal –
- Wait until some of your loans have been paid back.
- Then, withdraw the desired amount from your available balance:
- On the Account Overview page, choose Withdraw to the left.
Summary: Diversity and Safety
This investment strategy offers a wide range of diversification, significantly enhancing the overall safety of your total investment.
Various assets may perform differently under different circumstances. A mix of assets reduces your risk and increases your overall profit potential.
Investment types (assets)
- Personal consumer loans
- Car and leasing loans
- Business loans
- Sustainable loans
- Real estate loans
- High-yield savings account
- Fractional bonds
- ETF’s
Number of investments
- Crowdlending: You invest in different loans every month, spreading your risk across a large number of small loans ranging from €10 to €50 each.
- Each ETF comprises a variety of different shares, spreading your risk across a large number of shares.
- Investing in a whole bond can be expensive. When you invest in fractional bonds, you acquire minor parts of many different bonds, helping you spread your risk.
Investment Platforms and Countries
- Investing in several different platforms spreads your risk in case one of the platforms underperforms.
- Investing in many different countries reduces the risk in case some countries encounter economic problems.
FAQ
What is crowdlending?
Crowdlending presents an opportunity for private individuals to invest in smaller portions of loans provided by lending companies. In crowdlending, you can invest as little as €10 in various types of loans. The significant diversification offered, along with interest rates ranging from 10% to 14%, helps offset the risk of defaults.
What are fractional bonds?
Fractional bonds are smaller portions or fractions of bonds. Investing in a whole bond can be costly. However, when you invest in fractional bonds, you acquire a smaller portion or fraction of a bond. This allows you to spread your risk by investing in several different bonds.
What are ETFs?
ETFs are packages comprised of several shares. This allows you to invest in smaller portions of each share. When you invest in individual shares, there is a chance of achieving a good profit, but there’s also the risk of loss. However, when you invest in ETFs, some shares may perform well while others may perform poorly. By spreading your investment over many different shares, the risk and potential profit are also spread across numerous shares. Thus, the risk and potential for profit are equalized.
What is a diversified investment
A diversified investment involves spreading your investment across different assets, multiple countries, and various platforms. Under different circumstances, different assets, countries, and platforms may perform differently. When you diversify your investment, you mitigate the risk of poor performance and optimize your chances for a good profit.
What are assets?
Assets are various categories in which individuals can invest their money. These categories include a wide range of financial instruments and opportunities, each with its own characteristics, risks, and potential returns. Some common investment types/assets include:
– Stocks (Equities): Ownership shares in publicly traded companies, representing a proportional stake in the company’s assets and earnings.
– Exchange-Traded Funds (ETFs): Investment funds traded on stock exchanges, representing a diversified portfolio of assets such as stocks, bonds, commodities, or real estate.
– Bonds: Debt securities issued by governments, municipalities, or corporations, typically offering fixed interest payments over a specified period, with the principal repaid at maturity.
– Real Estate: Physical properties such as residential, commercial, or industrial real estate, which can generate rental income and appreciate in value over time.
– Alternative Investments: Non-traditional assets such as crowdlending, offering unique risk-return profiles and investment opportunities.
– Retirement Accounts: Tax-advantaged investment accounts such as 401(k), IRA (Individual Retirement Account), or pension plans, designed to save for retirement by investing in various asset classes.