For two weeks now no one is talking about P2P investments. Everything and everyone here in Germany has been revolving around Corona. The virus that dominates the media is ravaging Europe. It’s dangerous for everyone. And if you feel young and fit, you have parents or grandparents for whom the virus can be dangerous.

I joined our company task force two weeks ago. Together with a colleague, it is my job to assess the risk. And if we can identify and describe a risk, we should find a way to minimize this risk. Both for us as a company and for us as employees and colleagues.

Is the Corona virus really what the media make of it?

I lack the knowledge to say that the corona virus is worse or less bad than other diseases. I simply have no idea. And to compare the virus and its effects with anything else today is simply wrong.

My thoughts go out to all those who suffer directly or indirectly from the virus. People who have to endure the disease but also the many relatives and children who have to spend this time in quarantine.

After Italy, France, Denmark, Poland, Austria and many other countries, Germany has also decided to restrict public life. As of today the children are at home and are no longer allowed to go to school. From Wednesday at the latest, swimming pools, cinemas and much more are closed. This is mainly to minimize contacts. And this way we manage to slow down the infections considerably.

But is the Corona virus really that bad? Yes, without a doubt, it appears to be a very aggressive form of the virus. And so far it has killed over 7,000 people worldwide. But I don’t know anything about it and I can’t evaluate it.

I see opportunities above all

Since I have been dealing with the topic intensively every day for 10 hours through the task force, I have been trying to grasp the opportunity in it. Even if the typical German looks for the chance mainly in toilet paper and noodles, I believe that it lies elsewhere.

Warren Buffet once said, “Buy greedy when everyone else is panicking”

And so I see above all the huge opportunity to buy good companies with high dividends at a very favourable price on the stock exchange. In some cases, share prices are already at the level of the financial crisis of 2008, and it is not yet clear whether it will not go down a little further.

So why not just take chances? That’s especially hard because so few people do it. We’d rather worry and hide. It’s easy to sit in a corner somewhere and complain about our own suffering. Waaah, I have – 50% in my deposit. I am ruined.

Yeah, it looks like it. I’m pretty sure it’s not like that with me. My portfolio’s deep in the red, too. But I’m absolutely sure that in five years it will look very different. In five years we might be talking about a worldwide corona crisis. But above all we will be talking about a crisis that we have overcome.

And what is the P2P market doing in the crisis?

Somehow we have to say in the meantime that we have a kind of crisis. The rebound to the last stock market prices is not successful. Instead, the S&P 500, the Dow, the London Stock Exchange and also the German Dax continue to be deeply in the red. Is the P2P market crashing accordingly?

No, he doesn’t. After my last article on the financial crisis and the results of 2008, that is hardly surprising. Apparently there are only few connections between the P2P market and the stock exchange.

But in my eyes, this crash creates a special situation. On the one hand, a small percentage of people believe that the loans on the P2P market can no longer be serviced. That may well be, but I don’t think that the percentage is higher than it has been so far. On the other hand, some investors see the opportunities in the stock market and withdraw their money from the P2P market. They prefer to invest it in the stock market, because it promises maybe even more than the 11-12% return for the next months and years?

And here I see a bit of a chance. An opportunity for any P2P investor. But it does not consist of dissolving your own P2P investments. Rather, the free money can currently be invested in very attractive loans. Because if others want to get rid of their loans, they are even willing to accept a discount.

New opportunities for P2P investors on the platforms

At present, for example, you can find many loans on the secondary market, some at very high discounts. If you buy such a loan, which then perhaps still has the status “current” and has already paid some installments reliably, you buy the cash cow into your portfolio.

Why?

Someone else needs the money. And you give it to him. But in order for him to get the money, he’s willing to take a cut. In the Mintos secondary market, that’s often around 10% off or more these days.

If the loan is rated as good and has paid reliably so far, you will immediately get a return of 10% if you buy it. Of course, it depends on the future how good the return really is. But a loan that has been reliably paid in the past should probably be reliably paid in the future.

And that is exactly why I currently believe that the P2P market offers great opportunities for everyone.

How can you use the chances on the P2P market?

Let’s stick with mintos, for example. Here you can simply create a second Auto Invest. As a default you give him that you only want to invest in credits that have the status “current”. And then please let them earn at least 15% interest.

Why don’t you try this and see in a few days if the Auto-Invest has found something. Of course you have to give priority 1 to the Auto-Invest and a higher priority to everyone else. This way you make sure that he gets these credits first before he invests in other credits.

Other platforms such as DoFinance currently offer interesting bonus interest rates. If you invest your money there, you get an additional 1% or 2% on top for your investment. Does that sound interesting? With DoFinance and the VIP programme together, this would be 13%. Not so bad, is it? I find it outstanding.

Why do the P2P platforms offer such good conditions?

I can’t answer that question. But I have two theories. Maybe they both fit a little bit. I spoke to Lars this weekend. He said that the platforms are actually very happy about the crisis because they see great opportunities in it. Opportunities for themselves and the P2P market.

And that’s a lot like me!

My first thesis: money is lured onto the platforms with special conditions.

As already mentioned, one or the other investor withdraws his money to invest it in the stock market. No question, the chance there is historically favourable and huge. Also I have already bought one or the other share from my cash stock.

But dissolve my P2P investments? Never. My P2P investments are first and foremost an antipole to the stock market. Since there are apparently few connections between the P2P market and the stock market, both in the crisis of 2008 and now, the investments function more as a balance.

My second thesis: Better interest rates than the stock market!

If you look at the world’s stock markets, they are currently very volatile. Sometimes eight percent up, then twelve percent down. Then another eight percent down, then three percent up again. As an investor, you have to be able to stand that for a while.

For particularly stressed investors, the 10-11% in the P2P market seems much easier and more attractive. And above all they are less stressful to reach. The capital market is currently very irrational – the P2P market continues to follow its current route and provides passive income.

My investments in March 2020

So far in March I have both bought on the stock market and invested in the P2P market. But since I did not liquidate any P2P investments, I mainly took special offers there. You can find these at the end of this article!

On the stock market I bought a dividend shares into my portfolio. Among others Exxon Mobile, Vodafone and BP. Was that right? I don’t know, let’s talk about that in five years, but not today.

I don’t know anything about right or wrong. And I want to encourage everyone to make up their own mind. But most of all I want to show with my article today that the Corona crisis is not just a crisis. There is no question that it is bad and people are dying. But it also offers opportunities. And unfortunately these chances are far too often not shown.

For this reason, I wanted to present today what opportunities I see and which I have taken or will take. Maybe you also have the time and desire to think about it. Thoughts to look at the crisis from a different angle and to see it with different eyes!

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