Published on June 9th, 2020 | by Jenny0
Has the Peer to Peer Lending Market Turned a Corner?
Peer to peer lending has had a pretty torrid time of it lately and with a rise in defaults having an impact on lenders returns, many have been looking to pull their money out of the industry. Whilst this has had an impact on lenders, it does not appear to have been as severe as at first feared. Many peer to peer lending companies have taken the necessary precautions to try and keep their lenders capital safe and this has led to pretty good security across the board in what many consider to be a very risky industry. With the stock market appearing to have turned a corner, could this be the time for peer to peer lending to pick up its dragging feet?
S&P 500 Hits new highs (briefly)
President Trump’s announcement that the US does not appear to be doing as badly as at first feared in terms of the job market had a very positive impact on the stock market over the past couple of weeks. Many feel that this could be the sign of a corner being turned and coupled with the gradual reopening of the world’s economy, we could start on the road to recovery.
Whilst this may very well be true, others fear that it could simply be a ‘bear rally’ in which investors open up more positions in the market for hopes of a fast economic recovery. Whatever the scenario, this is going to have an impact on peer to peer lending.
The Peer to Peer market could see increased demand in the summer
It makes sense that given the general move of fiscal policy towards spending stimulation, that the peer to peer lenders would find increased demand for their finances. It ultimately comes down to the sentiment of the investors, however, it is looking bright.
Indications from Google Trends showed that the general appetite for peer to peer investments fell considerably throughout March and April however demand has slowly started to recover in May. This may also be due to the general view that the economic outlook may be somewhat more positive than we at first thought.
Despite the changing outlook, the advice of this platform remains the same. If you are making any changes to your portfolio, make sure you seek out the relevant advice to make sure you do not find yourself out of pocket.
Peer to Peer lending is still attractive for those looking to diversify their portfolio
Creating a diversified portfolio is essential when it comes to mitigating short term changes in the market and keeping your savings intact. Our article on market turbulence gives you advice on how you can survive through periods of uncertainty.