admin Dec 26, 2018
As one of the founders and shareholders of the Crowd4Cash Platform, I am often asked if I invest on our platform. The answer is quite simple: "Of course, I also invested in credit projects and thus built up a diversified portfolio".
About 20 months ago, I started investing in Crowdlending and was an early investor on the platform. In retrospect, this allows me to compare my investments made with other investment opportunities. Be it with my own bank account or equity or bond investments.
Crowdlending investments
Between April and October 2017, I built up a diversified portfolio with a total value of CHF 44'725.- and achieved the following ratios:
- Repayments: CHF 23'700.-
- Reinvestments: none
- Portfolio defaults: none
- Interest net: CHF 2'628.-, which corresponds to a previous yield of 5.8%
In the meantime, I have already received back more than half of my invested capital. Due to deliberately not made reinvestment, the return has been slightly lower than if I had consistently reinvested the amounts consistently.
Comparison to the savings accountA savings account today earns an average of 0.10% interest (Source K-Tipp). This would have resulted in interest income of CHF 71.60. To replicate the interest income of the crowd lending assets, a capital of more than CHF 1.6 million would have been necessary.
Even with the best-discounted Swiss savings account with special conditions, no more than 0.30% can be expected. However, this interest rate is generally associated with a longer withdrawal period. Also with this account a capital of more than CHF 0.5 million would have been bound to replicate the interest income of the Crowdlending investment.
Stock market developments (see graphic below)
The comparison to the SMI, Swiss Market Index (as of 21.12.2018, 8'417.29 points) does not have to shy away from my investment. The SMI was in negative territory not only for the year 2018, but also in comparison to the investment period (May 17 - Dec. 18) the SMI lost around 5% (-3.08 pa). This would have resulted in a theoretical loss in value of CHF 2'230.- (plus any custody fees). Although this is only a comparatively small comparative period and ignores the previous positive stock-years, it nevertheless proves that an equity portfolio enriched with Crowdlending assets would have achieved a better result in the analyzed period.
The comparison with the bond markets (Swiss Bond Index DomGov SBIDGT) is not surprisingly positive either, as the 3-month Libor has been in negative territory for around 4 years now and the forecasts for the near future do not suggest any major changes.
Quelle: Swissquote.ch
We can conclude that crowd lending investments have outperformed traditional performance asset classes in the last 1 ½ years. And if you give credit to the market commentators, the situation in the markets will not improve substantially in the coming months, since the framework conditions, the US-China trade dispute, Brexit and budget problems in Italy, are not very promising. In this scenario, Crowdlending brings a significant additional return thanks to its monthly repayments and stable interest rates, along with low volatility and low risk. Thus, it represents a profitable portfolio admixture for almost every risk profile.
Conclusion: Crowdlending a valuable addition to the portfolio
As with all attachments, the rule for Crowdlending is: "Do not put all the eggs in the same basket". If these basic rules of investing are complied with, the view into the Investors Dashboard of Crowd4Cash always brings great joy. That's why Crowd4Cash recommends Crowdlending assets as a stable and high-yielding addition to diversified portfolios.
I wish you a lot of success with your investments and I, like the whole Crowd4Cash team, is looking forward to welcoming you as an investor on Crowd4Cash.
Author: Roger Bossard
