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Automate your investments, making all the decisions about the products you want to acquire and contributing to financing companies in the real economy
When the human being invented the plow, he was able to revolutionize the way of harvesting and light up agriculture as a basic economic activity for people’s food and survival. The same happened when the automobile was invented and forever transformed the way we move around the world. The digital revolution has brought with it a new paradigm shift. Software, web applications, smartphones, IoT… Today we can automate thousands of basic actions and focus on what is important.
Both traditional banking entities and FinTech have implemented the benefits of digitalization in the financial sector. Thus, in platforms such as Inversa Invoice Market, you can automate your investments, taking full advantage of your knowledge and benefiting from a technological development that allows you to decide precisely what you invest in.
In such a way that online alternative finance FinTechs manage to merge sophisticated software and marketplaces with the investment desires of small savers and the financing needs of companies in the real economy.
Automating investments thus becomes a purely human action. And in a way to facilitate the work of people who want to invest their money to achieve a return on their savings and, incidentally, to support companies to obtain liquidity to meet their expenses and undertake investments.
1. You have all the information and the power to decide
Many people when they hear the word automate think of robots from futuristic dystopias such as those written by Isaac Asimov or Philip K. Dick. However, the reality is far from these fantasies.
Automation has been implemented for centuries and it aims to use machines to perform purely functional actions, based on people’s commands.
When we use a food processor to make lentils, we decide on the dish, buy the ingredients, pour them into the processor, and select the right program to make the lentils perfect.
Automating your investments in a crowdfactoring marketplace works similarly. You do not cede the decision-making capacity to a machine, but rather, based on your knowledge and the extensive information offered by the platform, you establish how you want your investments to be.
Thus, all the investments made with your money will respond with absolute accuracy to the parameters you have previously established. Just as you tell the robot how to cook, in a crowdfactoring marketplace you can tell the platform how to invest.
The decision-making is still yours, the only thing you automate is the click.
2. Establish the requirements to automate your investments
How does the platform know which investments you want to make? In a very simple way. Before activating the option that automates your investments, you must indicate the amount and the requirements that the system must meet when investing in invoices.
All this is possible thanks to the powerful technological development behind alternative financing marketplaces such as Inversa Invoice Market, which not only facilitates access to investment products but also makes it possible to automate investments.
Bearing in mind what we have just explained, let us now analyze the parameters that a saver can set so that the system can manage his investments according to his interests and knowledge.
The first parameter is, logically, the amount of money to be invested. All savers can set the amount of money they wish to invest at any given time.
So you can plan your investments and finances with total freedom. The system will never invest more money than you have stipulated when you activate the automation of your investments. This guarantees you full autonomy and decision-making capacity over the amount of money you invest.
The main motivation of every investor is, without any doubt, to obtain profitability. To use your money to generate more economic resources. Since the beginning of time, profitability has played a fundamental role in investments.
With the automation of investments, this fact has not changed.
In the Inversa marketplace, before activating this functionality, you can establish the minimum profitability you wish to obtain when investing in an invoice.
Let’s imagine, for example, that a small saver indicates that he wants to invest 500 euros and that the minimum return he expects for his investment is 6%. The system will automatically discard all bills that provide a return lower than this figure.
In crowdfactoring platforms such as Inversa, invoices have a payment term. Although the investor receives the return in advance, he will not recover his investment until the due date of the invoice in which he has invested.
Well, any investor can indicate to the program the maximum period of maturity that the invoices in which he wishes to invest must have.
So if, for example, you stipulate that you do not wish to invest your money in invoices with a maturity date of more than 100 days, the system will never invest in an invoice with a maturity of 180 days.
2.4. Risk level
Along with the R for profitability, we find the R for risk. Every investment involves a level of risk, which fluctuates according to the credit rating of the company in which the investment is to be made.
In the case of Inversa, Rating INFORMA gives a credit rating to each company obligated to pay the invoices. This rating moves on a scale ranging from 0 to 20, with 0 being the worst credit quality. Thus, five types of risk levels are established:
- From 0 to 6. Invoices from companies with this rating cannot be marketed.
- From 7 to 10. The investment risk is medium-high.
- From 11 to 15. The company presents a medium-low risk.
- From 16 to 20. The risk of the operation is low.
- AP. The obligor of the invoice is a Public Administration and, therefore, does not fall within the scale.
Given these risk levels, the investor can establish that the maximum level of risk he wishes to face is medium-low. Thus, the system will not invest in any invoice above this level.
In this section, the investor can determine whether he is willing to acquire the rights of a company, a public administration, or both.
Public administrations are risk-free so that the return on their invoices is lower.
While companies, as indicated in the previous subsection, have different credit ratings, depending on the analysis of their solvency.
2.6. Credit Insurance
The Inversa platform offers an option that can be very interesting for less daring investors who prefer to sacrifice profitability to reduce the risk of their investments. We are talking about credit insurance.
In some cases, the solvency of the drawee is analyzed by an insurance company. In such a way that this company is responsible for the payment of the invested money in case of insolvency of the drawee or debtor. These invoices are presented on the Inversa marketplace as insured invoices.
Investors who wish to invest only in these insured invoices can indicate this when setting the investment parameters.
3. Draw a precise portrait of the investments you wish to make
The sum of these parameters allows the system to draw up a robot portrait of the investments that the saver wishes to make.
Let’s see it better with an example.
Let’s imagine that an investor sets out that he wants to invest 500 euros in invoices whose drawees are companies. With a minimum yield of 6%, a medium-high maximum risk level, and no need for them to be insured.
The system finds these three invoices:
- Invoice 1. The drawee is a company, the risk level is medium-low, the return of 5%, and the invoice is insured.
- Invoice 2. The drawee is a public administration, the risk level is, therefore, AP, and the profitability is 4%.
- Invoice 3. The drawee is a company, the risk level is medium-high, the return offered is 8% and the invoice is not insured.
In which of these will you invest? In invoice number 3. Since invoice 2 is from a Public Administration and invoice 1 has a profitability that is too low.
This example allows us to see how automating investments does not mean giving up decision-making power, but rather exercising it efficiently and without having to be constantly aware of the investment products that appear on the marketplace.
4. Do not arrive late for the products that best suit your interests
Precisely, one of the great benefits of automating investments is that savers do not have to constantly enter the marketplace in search of investments that fit their desires and demands.
This functionality allows investors who do not have much time to study the market not only to be able to invest but also to decide precisely how they want to do so.
But it is also key in preventing an investor from missing out on an investment that perfectly matches what he or she is looking for.
Let’s see it better through a practical case.
A ceding company uploads an invoice it has issued to a crowdfactoring platform such as Inversa Invoice Market. The drawee of this invoice is a company with an excellent credit rating, which implies that the risk of the transaction is low. The return is fixed at 5%.
An investor accustomed to using the platform always opts to invest in invoices with a low level of risk, as she prefers not to opt for a higher return, but to invest on the safe side. The invoice that has been uploaded fits in perfectly with her investment strategy.
Unfortunately, she is not the only investor who feels the same way. So when she accesses the marketplace, the financing process for this invoice has already been completed.
If she had activated the option to automate investments and set the parameters of the investments she is looking for, she would not have been unable to invest in this bill.
5. Choose invoices based on drawees
In addition to the parameters described above, investors can also establish which drawees they wish to invest in.
In other words, the investor selects a drawee he trusts, either because of his reputation or because his invoices are published regularly and he has never had any problems. And the system proceeds to invest only in the selected drawee.
In addition, the investor can set two limits to these investments:
- The amount he wishes to invest for each invoice of the drawee.
- The maximum amount he intends to invest in that drawee.
What happens if there is a drawee on the platform that we do not want to invest in, even if the investment conditions meet the parameters we want? Will the system still invest in him? No. All you have to do is select on the platform that you want to invest 0 euros in a drawee. And the system will not make any investment linked to it.
In this way, the investor controls each aspect of the automation of his investments. Not only the conditions of the product he purchases, but he can also control precisely with whom he enters into a relationship. And, in addition, he makes sure that he does not miss out on an investment he is interested in making.
6. People investing in people… automated
Automating investments does not detract in the least from the essence of alternative financing platforms like Inversa: being vehicles for enabling people to invest in other people.
It simply automates these more humane investments, which combine the search for profitability with support for companies in the real economy.
Automation does not take away our ability to make decisions about our investments. On the contrary, it allows us to control the entire process of investing with the utmost precision.
The system does not invest for us but executes the investments we have planned based on the information in the platform, our knowledge, and objectives.
It only frees us from being aware of the publication of each invoice. The investor decides what and who to invest in. The system just executes his decisions.
When we taste the lentils we have prepared using the cooking robot, it is clear to us that, although this appliance has made the task easier, we are the chefs. The automation of investments transfers this dynamic to the financial sphere. And, in the case of alternative financing, it does so by delving into the most human aspect of investments:
People investing in people…in an automated way.