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The purchase of invoices from companies in the real economy is an excellent complement to the investment strategies of savers
Everyone is familiar with the concept of strategy. In our daily lives, we hear about business strategies, political strategies… even sports strategies! And even if we don’t call it that, most of our decisions respond to a vital strategy. In finance and savings management, investment strategies are a concept of enormous relevance. All people who wish to invest their money to achieve a return in return must have investment strategies, either because they design them themselves or delegate this task to financial advisors.
Today, savers have a wide variety of investment mechanisms at their disposal, from conventional products such as stock market shares or treasury bills to innovative investment vehicles such as crowdlending or crowdfactoring. These alternative financing mechanisms can be a fantastic complement to investment strategies.
In this article, we are going to tell you how you can design your investment strategies, decide how, when, and in what you want to invest your savings and bet on crowdfactoring as a complement to investment strategies that allows you to earn money and support companies in the real economy.
Do not delegate the design of your investment strategies
Until recently, many people felt alienated from the investment arena. This was because, to make investments, it was essential to go to a financial institution, buy a product and delegate the decision-making around what to invest the money in. To be prosaic, investors only decided to invest.
However, digitalization and the rise of concepts such as impact investing or socially responsible investing have forever upended this understanding of investing, in which small investors used to play a passive role.
Today, people want to be empowered and decide how their money is invested. The main objective of investments is still to obtain a return. Still, it has been complemented by other, increasingly essential aspects, such as the environmental and social commitment of the companies financed through the investment.
As a result, investment products that are accessible to all types of investors are making their way into the financial sector. Largely thanks to the push from FinTech and alternative financing platforms.
Nowadays, you can plan your investments by combining products from traditional banking institutions with complementary investment strategies such as crowdfactoring.
Diversify your investment strategies
The emergence of new players in the financial sector has made it possible for investors to diversify their investment strategies more efficiently.
You can have part of your money in an interest-bearing account or deposit in a bank, invest in Treasury bills or bonds, bet on ethical banking, or invest in an invoice through crowdfactoring. There are multiple investment options.
Why is it convenient to diversify investment strategies? First, the other key R in the investment arena is that you reduce risk. If you put all your money into the same investment and it goes wrong, you risk losing it. Diversification, on the other hand, reduces the risk you take in designing your investment strategies. Secondly, as mothers say, “Variety is the spice of life”. Why not combine short-term investments with long-term investments or fixed-income investments with equity investments?
If you design your investment strategies, you can set your objectives and combine different products to achieve them, including an easy-to-understand and manage complement to investment strategies such as the one offered by Inversa Invoice Market’s crowdfactoring platform.
Understand the products you invest in
Understanding the product is essential when planning investments and choosing a complement to investment strategies that suits your needs and goals.
In the past, some small investors have relied on complex investment vehicles such as derivatives. While perfectly legal, these investment vehicles carry a level of complexity that makes them suitable only for investors with extensive knowledge of the subject matter.
As some of the greatest investors in history, such as Warren Buffett, have told us time and again, when investing, it is crucial to have a perfect understanding of the product you are investing in.
That is why crowdfactoring is a fantastic complement to investment strategies. Why? It is a simple-to-understand and managed investment vehicle:
- A company assigns an invoice it has issued but has yet to collect.
- Investors acquire the rights to collect the invoice in exchange for a return on the transaction.
- When the company paying the invoice pays the money, the investors get their investment back.
Know the companies you invest in
As we pointed out earlier, one of the issues that kept small savers away from the investment arena was the destination of their money. Investors took out an investment product but needed to know precisely what their savings would be used for or which companies they would finance with them.
In contrast to this more opaque model, online alternative financing emphasizes the destination of the money. Through platforms such as Inversa, a saver can know precisely who he is financing with his investment. This fact is not trivial considering the role played by social and environmental concerns and worries.
Today, many people want to know the companies they are helping to finance. Financing businesses in the real economy, which generate wealth and employment locally or are committed to sustainability, is very attractive to thousands of people.
Can you get a return on your money and, at the same time, support socially and environmentally responsible companies? If you plan your investments and bet on a complement to investment strategies such as crowdfactoring, yes.
Providing transparency in the management of investments and facilitating access to all kinds of products to thousands and thousands of small investors is already making a difference not only in finance but also in society as a whole and the productive fabric.
Automate the management of your investments.
Another reason to rely on crowdfactoring platforms as a complement to investment strategies is the possibility of automating management without delegating decision-making at any time.
Inversa Invoice Market’s marketplace has functionality that automates investments. Savers design their investment strategies, establishing the aspects to be fulfilled: money to be invested, profitability to be obtained, the credit rating of the company, repayment term, and type of company to be invested in… The platform stores this information and makes investments according to the strategy designed by the saver.
This functionality is handy because it allows savers to invest in the invoices that fit their interests, needs, and objectives without entering the marketplace daily, thus avoiding being left without an invoice that includes their investment strategies.
Planning investments and acquiring a complement to investment strategies do not have to be a complex and time-consuming task. Not at all. Digitalization not only makes it easier to access the financial sector but also to manage investments autonomously.
A complement to investment strategies from just 20 euros
Another aspect that has traditionally kept savers away from the investment arena is the amount of money needed to be able to invest. For example, to invest in an investment fund, sometimes large sums of money are required that a potential small investor cannot afford to use.
In this sense, crowdfactoring is also an excellent option to complement investment strategies. Without going any further, in the Inversa marketplace, you can start investing from as little as 20 euros.
This means there are no barriers to accessing the investment marketplace, and small savers can allocate 500 euros, 1000 euros, or 20 euros to invest in companies’ invoices in the real economy.
Moreover, as the payback periods are short, this complement to investment strategies allows savers to adapt these strategies to their circumstances with great agility. Take, for example, a professional who wants to invest around 500 euros every month. However, one particular month she needs to purchase equipment for her work and decides to support only 100 euros. With a complement to investment strategies such as crowdfactoring, this is possible.
In short, digitalization has wholly transformed the financial sector. Today, if you have savings, even if it is a modest amount, you can design and implement your investment strategies to make your hard-earned money profitable. And, at the same time, produce a positive impact on society and the productive fabric.
Plan your investments and consider a complement to investment strategies such as crowdfactoring, which allows you to make your own decisions and invest in companies in the real economy.