Hello Comrades! Its been a while since I last wrote. The reason is that I am not so interested in posting a month-over-month report, but mostly to document the larger moves that I do. Lets see what has been going on at the Command Center since May.
In the last post I described the assets and amounts that I want to allocate my current net worth at. Since then, I took a few steps towards that goal.
P2P
I have done a lot of research over the available p2p European platforms. I discovered that the p2p scene is widely developed in the UK, but not so much in mainland Europe. I am not willing to take the currency risk of investing in GBT, so I decided to stick with EU platforms.
In the mainland, the scene is blooming in the Baltics. Estonia, Latvia, Lithuania have a lot of platforms offering very attractive 9-14% returns. There are also a few platforms in Spain, Germany, Italy, and France, but most of them do not have English version of their pages, and also offer quite low returns, in the range of 5-6%.
Many platforms were researched and most of them eliminated because of one or more of these reasons:
- No English page
- Requiring a bank account in the respective country
- Low returns (5-6-7%)
- No auto-invest function
- No buyback guarantee in case of loan default
- Not offering short-term loans (1-3 months). I want my money liquid
- Not allowing to see available loans upon registering and before transferring funds
- Bad reviews / negative sentiment in p2p forums
The ones that made it were:
- Mintos. Young platform but very attractive returns, a lot of short-term loans, a lot of loan originators to diversify to. I deposited 3600 €. Sometimes, especially during weekends when no new loans are added to the platform, I experience my money not being re-invested, but in general I am happy with the way the platform works. It makes me feel safe.
- Viainvest. Even younger platform, but looks quite professional, 10% return, only short term loans, no negative sentiment in forums. I deposited 2600 €. They have a bunch of available loans, and their platform works very smoothly too
- Robocash. New platform as well, but offering a 14%. That one is even riskier than any p2p investment is, but I decided to try them. I deposited 2000 €. Their platform has iffy translations to English and it could be more polished/professional. I hope they will invest into that.
- Viventor. Young platform, but it looks very professional. I decided to not invest with them yet, because they offer short-term loans only from one originator (concentrated risk) and I am already too exposed to the Baltics p2p platforms (more concentrated risk)
- An honorable mention must be Klear, a Bulgarian platform that looks extremely professional. As a software developer I applaud these frontend developers. Also, the way they express and present themselves builds trust, but I am not willing to expose myself to the risk that Lev will be untied from the Euro at some point.
Also, I wanted to diversify a bit from the payday type of loans that I invest in the aforementioned platforms. I think the idea of invoice financing is very interesting, so I did my research on p2p invoice financing too. Unfortunately, this sector is not developed at all in Europe. There are very very few p2p platforms, and most of them didn’t make it because:
- Only accepting institutional investors, or super wealthy private investors
- Only available in local languages
- Requiring some extra work (Lenndy, PAYSERA managed account)
- Not having enough invoices (Viventor)
- Being already invested in the platform (Mintos)
I concluded in Investly. They are a young platform, but they have already a good history of financed invoices. They seem to be posting new invoices quite often. I deposited 2500 € and in 3 days I already purchased parts of 2 invoices. In all honesty, I was surprised to find that there is no other invoice financing platform out there that satisfies my above mentioned criteria.
So, as you can see, in the p2p sphere I am invested fully in platforms from the Baltics, that offer a selection of loans from multiple countries, including the Baltics, so my risk is really concentrated in the region. I wont make more investments in that region for now.
Crypto
I suck at trading. I registered at Kraken at May, transfered 3000€, and started trading crypto. I also bought a couple of ICOs. From May to August all the major coins have increased in value many-fold, and yet, despite using countless hours and mental resources/stress on it, I managed to lose money. Why? Because trading requires discipline and knowledge.
My faults were: Not following the markets at set intervals (e.g every 4 hours) but sporadically; Not having enough technical knowledge to identify entry-exit points; Letting my fear and greed guide me, leading to getting out of successful trades to soon, and letting failed trades run for too long.
I managed to lose 1/3 of my initial investment, until I decided to pull out for now. I have a plan for re-entry when I streamline my other investments, and therefore have mental capacity to enter again with discipline.
My plans for crypto are to divide my crypto allocation in 3 parts:
- A crypto index. Prime canfidates are The Token Fund and Crypto20. So it is a bet that the total market will keep going up.
- A trading bot that runs at the end of a trading day, hooks up to the Bittrex API and places buy/sell orders. The signals for these orders is the crossover of 2 moving averages. I have written that bot, and it is currently collecting market close price data. Once 30 days are filled, it will be ready to run against Bittrex. I have backtested this moving average crossover strategy in historic data via Tradingview and it seems that it only generated profits when the market is moving upwards. If it is trading even sideways, there are a few false signals that end up in losing trades. So again, it is a bet that the markets will go up.
- A part reserved for me to invest manually. Here, great discipline is needed: Monitoring the charts every 4 hours (except of the time that I am sleeping), using technical indicators, and placing manual orders.
There is a lot of contradictory views on the crypto market. Some believe we are in a bubble, other that this rise in valuation is reasonable as it reflects the expectation that the future will utilize blockchain technology. From my point of view, I think these coins are overpriced, as most of them are not really used for anything meaningful today. Yes, blockchain technology will certainly be more mainstream in the near future, but their current valuation is based on these expectations instead of tangible present utility. Nevertheless, huge profits have been made, and huge profits might be made still. I cannot tell if the bull run is over yet. I guess when I enter again I will enter with some small funds, and keep buying periodically if the situation seems ripe.
Home
The repayment of our apartment loan continues normally. Yesterday the third installment was made, and, after recalculating my percentage of house ownership, the current market price of the apartment, and the remaining loan principal, the current value of my share of the apartment is 443566 DKK, or 59602 €. The calculation is the following:
my value = (current market value – remaining principal) * my ownership percentage
The rationale is that these are the money that I would end up with if today me and my girlfriend decided to sell the apartment, repay the rest of the loan, and share whatever remains between us. It is easily written than done, but I still want a number that represents the monetary value of this asset.
On a side-note, we decided to rent a room in our apartment to a lovely Dutch girl. She pays 4500 DKK (600 €) a month, and today we received the second rent from her. This will increase our cash flow, but I do not consider it a return of investment. Our home is not a per profit investment, it is a place to live our life, so I do not book-keep it/take it into account into any house ROI calculations.
Girlfriend
My girlfriend’s repayment of her loan to me progresses steadily. She actually just graduated and was offered a temporary (few months) position at the place of her internship, so, combined with the fact that she will have extra income from the rented room, means she will be able to repay more rapidly from now on. I am really proud of her. If you by the way happen to live in Copenhagen and know of any secretary/office work positions, drop me a line 🙂
Parents
As mentioned in the previous post, my parents are giving me an advance of my inheritance to help me pay off the loan faster. At May they gave me a part, and at August another one, totaling a sum of 135963 DKK or 18269 €. In the next loan repayment, I need to inform the bank that I will be repaying a part of the principal.
Stock market
I did not have time to research different investment options in that area. But I soon will, and I stick with my idea of investing in index funds / ETFs (after I understand the difference between these 2!). Maybe an appointment with my bank adviser is in order…
A snapshot of now
Alright, so that was a summary of what has been going on in different areas of my economics since May. I mostly have been getting my feet wet and trying out new things. If any of you get off from seeing numbers and charts, as I do, I am sorry that I haven’t included any, but my current investments are too young to be able to provide any of these metrics. Buuuuut……….
Last week I took some hours to re-structure and back-fill my book-keeping spreadsheet. This allowed me to make charts showing the allocation of my assets month-over-month:
Until next time
Until my next post, I will be working on:
- Researching stock market investment options
- Monitoring my p2p investmets
- Following the crypto market
- Re-think the ideal asset allocation I posted previously, and move towards it
- Think if I want to post an update every end of month instead of sporadically
My financial journal 