8 Reasons to Consider Automated Investing
If you hadn’t already heard, the future is now. No, we’re not talking about Waitrose’s new range of Christmas inspired party food (we’ll save that for another blog), we’re talking about the future of investing.
Our IF ISA and Auto-Invest products have revolutionised the way that you can invest in property with The House Crowd. No longer do you have to do all the heavy lifting (unless you want to) and pour through each loan’s specific criteria before deciding whether to make an investment or not. Thanks to our automated investment products, you can now automatically diversify your capital, without having to lift a finger.
Why Consider Investing Through an Automated House Crowd Investment Product?
1.Regular Interest Payments
You don’t have to wait like you would have to wait for an individual investment to mature before getting a return. For example, for those who invest in The House Crowd’s automated products, we pay interest twice yearly, once in October and once in April.*
2. Ability to Roll Up and Compound Your Interest
You can choose to compound your interest, or have it paid to your bank account. By compounding your interest, you are continuing to build upon the return that you’ve already earned. Think of it as a sort of snowball effect, only the snow in this scenario is cold hard cash. However, because it is reinvested the money earned as interest is ‘at risk’ alongside the capital from your initial investment.
Rather than all your money being subject to the risk of being invested in one investment, your capital is spread across a number of investments. It’s basic common sense to diversify your capital and mitigate the risk of any one investment going bad. Whilst you’re not immune to risk, it does diminish your chances of something going wrong.
4. Defined Exits
Both products have a minimum term where you can define your exit – Auto Invest: 12 Months and the IF ISA: 3 Years. After which you can provide notice to have your capital returned. This allows for you to make tailor your investment to fit into your overall financial goal. However, this is subject to sufficient availability of funds. In some cases, it may not be possible to return an investor’s money until a loan is redeemed or new investment is received. If a loan is in default you will not be able to recover the part of your investment allocated to that loan until the borrower repays. See product T & Cs for full details.
If you’re one of those people who find themselves short on time (especially with regards to managing your investment portfolio) using an automated investment product will save you valuable time.
6. Reduce Costs
By investing in either Auto Invest or our Innovative Finance ISA, you can remove the need to pay financial advisers or other intermediaries as the investments are made on your behalf in accordance with set criteria.
If organization isn’t your strong suit, automated investing is ideal in the sense that it systematically manages your portfolio and keeps your investments in line with your predetermined goals.
8. Tax-Free Innovative Finance ISA
Innovative Finance ISAs allow you to invest up to £20,000 per year and earn tax-free returns. At The House Crowd you can now transfer any of your existing ISAs that you do not feel are performing well free of charge.**
The Future of Investing?
As many financial commentators will tell you, automated investing is shaping up to replace more traditional means of investment. Whilst automated investing is by no means immune to risk, it does remove the element of error on behalf of the investor. This is especially ideal for those who may be less experienced in investing and may not be as savvy identifying loans that could prove more suitable to their outlined criteria. According to Investopedia, up to 51% of baby boomers felt that technology had given them “peace of mind” with their investments. Younger generations take this statistic even further, with up to 75% saying that technology has helped them to “achieve their financial goals”.
In a broader reference to industry general, a recent study concluded that over as of next year, 40% of US companies will employ more digital workers than human ones. That’s all well and good…but have we learned nothing from Terminator? Skynet anxiety aside, technology is proving to be a way in which we can efficiently and accurately complete the tasks that require these values most. Forrester research (who conducted the study) envisaged that automated services would have a largely positive impact within the working world, demonstrating much higher levels of precision than the average human worker.