November 2, 2023 For investors | Tips and advice
On the platform BONDSTER, you can easily set your own rules for investing in loans. Create your own investment strategy and simplify your portfolio management. We will show you a model example of setting up a custom strategy.
On the platform BONDSTER, investments in loans from over three dozen verified providers from across the world are available. The range of investment opportunities is wide and individual loans differ not only in the amount of the fixed return but also, for example, in the maturity period or the method of collateral.
There are three ways you can select loans for your investment portfolio – manually or automatically through a pre-set or custom investment strategy. The last-mentioned option offers the highest flexibility. Only you decide, which loans you are interested in. It is simple. You can tailor your investment strategy to fit your investment approach and goals completely.
Creating a custom strategy
We will take you step by step. First, log in to your investor account and click on the STRATEGY tab at the top menu of the page.
If you don’t have an account yet, you can easily create one here.
Create an accountYou will see a page with a list of available strategies for investing in Czech crowns and euros. In our guide, we will focus on investing in euros, so select the EUR option. Next, four strategies will appear, the first three of which are pre-set and the fourth is yours to customize.
You can choose a custom investment strategy by clicking the yellow SELECT button. Now you can start setting specific parameters of your own strategy.
Setting up a custom strategy
The online form for setting up your own strategy contains a number of parameters. It is a good idea to fill in the Name of the strategy field on the left in the header of the strategy settings. This will help you navigate your individual strategies better in case you have multiple strategies.
Next, you need to fill in the target amount, which is the maximum amount you plan to invest within the strategy. You also need to choose the maximum investment in one loan. On the platform BONDSTER, one can start investing with as little as 100 Czech crowns or 5 euros. Thanks to the low minimum investment, it is possible to diversify the portfolio very thoroughly, both at the level of individual loans and providers.
For a custom strategy, you will also need to choose whether you would like to invest in loans on the Primary or Secondary Market, which providers you are interested in and what interest rate or loan maturity you require.
Loans can also be chosen by how they are secured (e.g. real estate, cryptocurrency, car, etc.). Loan providers may also offer the so-called buyback guarantee or allow early withdrawal from an investment.
Don’t forget about reinvesting the principal and interest payments received
In the strategy settings, ticking the box to reinvest principal and interest is very important. Once you check this option, the money credited to you is quickly reinvested, earning you additional interest on the interest earned and thus maximizing your interest income.
The possibility of automatically diversifying the portfolio by providers is also useful. You decide for yourself what percentage of your total free funds available for investment you want to invest in loans from individual providers.
Finally, you need to save and run the created custom strategy. You can modify the set strategies at any time by pressing the EDIT button.
It is also possible to create multiple strategies. Just remember that the order of the strategy in the strategy overview is very important as it determines the priority of selection (strategies are executed from top to bottom).
Creating a model custom strategy
Now, we will show you a possible setting of a custom investment strategy. The model strategy presented here only serves as an example. In total, we will create four custom strategies.
Imagine a situation where you have three favourite loan providers. In our model case, these will be Alende and Lendo. We will set up a separate strategy for each of them. The last, fourth strategy named Custom Strategy 1 is for the case when none of the above-mentioned providers have free loans to invest in.
The order of individual strategies determines their priority. In our case, loans from the provider Alende are selected first, then loans from Lendo and only then loans that match Custom Strategy 1 are chosen.
Now, we will show you how one could set up a strategy for the provider Alende.
Strategy for the provider Alende
In the name of the strategy, we simply indicate the provider’s name, i.e. Alende. We set the target amount to EUR 250 and the maximum investment in one loan to EUR 5, for example.
From the loans issued by Alende, we select, for example, loans with an interest rate of 15 to 16 per cent, and a maximum of 12 months remaining until maturity.
We check Alende in the list of providers. Since we are setting a strategy for selecting loans from one provider, diversification by providers does not make sense and therefore we check the NO option.
We would like the credited principal and interest to be reinvested as soon as possible, so for Reinvest principal and interest, we check the YES option.
Finally, we save the settings with the SAVE button.
Similarly, we have set up strategies for the providers Alende and Lendo.
Strategies for selecting loans from multiple providers
The fourth strategy, which we will name Custom Strategy 1, contains providers whose loans should be chosen automatically if there are no loans from the providers Alende and Lendo available.
As other providers, we have chosen Ibancar, ITF, Juanchotepresta, Autofino and Nordcard. The desired interest rate of loans is set between 15 to 20%, the maturity period is a maximum of 12 months, and the provider is required to offer a loan buyback guarantee.
Benefits of using a custom investment strategy
By setting up your own investment strategy, you can save a lot of time. Compared to manual investing, you do not have to constantly monitor the offer of loans and choose the most suitable ones for you, and if necessary, you can modify or cancel the settings of individual custom strategies at any time.
Autor of the article: Roman Muller
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