Are you investing in stocks or choosing alternative investing like hive5? Or are you still thinking about it? The investment decisions should always be well-considered. Hence, we'll compare two investment options: P2P platforms (like hive5) and stock market.
Regularity of Income
P2P Platforms:
Unlike stocks, investors on P2P platforms typically start earning returns from the first month. Monthly repayments could provide a steady income stream.
Stocks:
Investors in stocks often don't receive instant income. Dividends, if any, are periodic but ar usually not as consistent as P2P platforms suggest.
Return on Investment
Stocks:
By investing in stocks, if you get lucky, you can earn double, triple or even more, but in many cases, you can lose a large amount of investment; however, over the past 30 years, stocks have returned an average of 11% annually.* Investors with a lower risk tolerance may find it difficult to sleep at night when the stock market is volatile.** You should get used to the market’s instability.
P2P Platforms:
For example, on hive5, currently, the average interest rate stands at an impressive 15.05%, potentially offering higher returns. Undoubtedly it is a more predictable and consistent return than the stock market could suggest.
Security and Control
P2P Platforms:
The most considerable risk in P2P lending is the risk of default. Depending on the P2P platform you invest in, you can have some security of your funds. It ranges from none to buyback, mortgage, or collateral. Hive5 provides a buyback guarantee in case payments are delayed for more than 60 days, offering added security to investors.
Stocks:
Stocks naturally come with higher risk due to market volatility, with the potential for substantial gains and significant losses. Individual stock investors have less control over external factors affecting a company's performance than P2P investors, who have more influence over their chosen loans.
To Sum Up
It goes without saying that all investments involve some degree of risk. While both P2P platforms and stocks have their worth, hive5 offers distinct advantages for investors seeking regular income and greater control over their investments. The stock market could be more enjoyable for investors who like risky investments. Ultimately, the choice between P2P platforms and stocks depends on individual risk tolerance, investment goals, and preferences. It is important to note that diversifying across different asset classes is a mindful approach to building a broad portfolio of investments.
Sources:
* https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
**https://time.com/personal-finance/article/mutual-funds-vs-stocks/
