Investment Risk Management on Crowdfunding platforms

What is risk management?

Risk management is one of the most important steps when establishing your investment strategy. Given the current climate of low-interest rates and uncertainty around stock markets, interest in private equity is on the rise, especially via online platforms.

As more investors seek to diversify their portfolio, the possibilities made available by online crowdfunding and investing platforms are ever increasing. As with every investment method, you should consider risk management before starting with crowdfunding and crowdinvesting.

Speculation across world markets

Speculation over investment and the guarantee of return has long been the game of investors and business owners. The difference between those who choose to invest with the successful return and those who choose to invest and fail, is the projection they have set forth for themselves. Without a strategy, investment can be risky and disconcerting. However, if the investment is played right, like the great historical minds, which now yield profits one can only dream of, the notion of strategy and investment go hand in hand. With the increasing amount of opportunity created in today’s financial world with thanks to the fluctuating economy of today, investing has never been easier, but with the strategy of course.

・Speculation

If you buy a stock or stock mutual fund when the market is hot, and prices are high, you will have greater losses if the price drops for any reason compared with an investor who bought at a lower price.

・Long Term investment

Investors should also understand that holding a portfolio of stocks even for an extended period could result in potential negative returns. Investors holding individual stocks for a long period also face the risk that the company they are invested in could enter a state of permanent decline or go bankrupt.

Related article:Real Estate Investment for the Long Term and Crowdfunding

・Set Alerts

An online platform, such as CrowdfundUP, will allow you to set up alerts for notifications. An alert allows you to be notified when a particular event occurs - for example, what your specific investment opportunities are doing, or if there's an opportunity that would be a good fit for your portfolio.

・Interest and Calculating

Historically in Australia, investing in real estate has shown to be one of the most profitable investments. The CrowdfundUP real estate crowd investing platform averages returns from 10% to 15%+ (depending on the timeframe, local market and type of investment)

In Conclusion

Crowdfunding for real estate, for example via CrowdfundUP, has grown in popularity, along with Peer to Peer (P2P) lending models. These investing models are now competing with traditional investing and trade services. It also means that platforms must give much more information to Investors and also report throughout the investment period.

It also requires the platforms or 3rd parties to complete a proper due diligence process for the property groups and projects being put forward, something that is completed by CrowdfundUP's Credit Committee. On the CrowdfundUP platform, Investors are able to access their personalised Investor Dashboard, which keeps them up to date with their investments in real time via reports and contact with the Property Groups involved in the Investment.

The information in this article is general in nature. Any advice it contains is general advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person.
The article content is not intended to be a substitute for professional advice and readers are urged to seek their own appropriate advice before making decisions.
Any reference to a particular investment is not a recommendation to buy, sell or hold the investment.

   Sep 14. 2017 CrowdfundUP