Published on March 11th, 2020 | by Jenny0
What Coronavirus means for the peer to peer lending market
Market sentiment in the financial world is something that can be easily swayed, and deciding on what to do as an investor can often be a difficult decision. The recent spread of novel coronavirus Covid-19 has caused a lot of financial disturbance since it started to be spotted more around different parts of the world.
Whilst the peer to peer lending market does not react in the same ways as the stock market, the recent spread of the disease may have some implications for your portfolio. Here are some of the ways that your investment could be affected.
Peer to peer lending could be used to help combat financial impact of Coronavirus
In the wake of the financial crash of 2008, consumer lending fell alongside lending to smaller businesses. This is one of the reasons why the peer to peer lending market grew so much in the aftermath. Some experts believe the same could be true of the financial impact of Coronavirus. If banks tighten up on capital and refuse to use credit to business at an affordable rate it could pave the way for new borrowers on the peer to peer lending market.
Peer to peer lending has remained fairly stable through the market shocks and this has come alongside gold and other unusual investment options. Whilst the boost in other investments is due to fall once fears of the virus die down, the underlying principle behind peer to peer lending is one of the reason why many experts feel the industry will continue to grow in the near future.
Having a diversified portfolio is essential in order to mitigate market fluctuations
Whilst the financial impact of Coronavirus could be very severe indeed, results have shown that those with balanced and diversified portfolios should take less of a hit than ones that are invested too heavily in one asset class or stock. Make sure you consult expert financial advice to ensure your investments accounts are secured.
Check developments periodically to make sure you are up to date
The information shown could be subject to change and further speculation in the market in addition to a potential economic down turn could change the landscape in a short space of time. To give yourself the best chance of properly managing your peer to peer portfolio make sure you are properly informed on all the relevant issues and have sought proper financial advice before making any changes to your portfolio.