P2P investments heading in the top assets 2023 again
To determine the most favorable assets for 2023, platform analysts took the following instruments: stocks, bonds, commodity market, currency, cryptocurrency, real estate, deposits and European P2P lending (consumer and business).
For a more accurate forecast, they evaluated the assets on the following factors: simplicity, entry threshold, growth forecast, returns over the past 5 years, and risk assessment. The market was analyzed using an index approach.
*The rating scale from 1 to 8 was used as the basis for the input data (since 8 assets were studied). For example, the higher the return, the higher the score, or the lower the risk, the higher the score. Each criterion is assigned importance coefficients: 1 for entry threshold and simplicity, 2 for 5-year historical returns, 3 - for growth forecast (as of December 2023) and risk assessment from October 2018 to December 2023.
First place in the current reality is occupied by the traditional currency, expressed by the DXY dollar index. “When markets fall, investors sell their assets and “go into cash”, thereby pushing the currency price up,” analysts comment on the results. “From March 2020 to February 2022, the balance sheets of central banks increased by 80%, after which the process of their curtailing began. In this regard, the indices of stocks, bonds and other assets in proportion to the balance sheets also began to fall." Last year, according to a similar study, the currency also ranked first in the top promising assets.
Second place went to business and consumer P2P lending in Europe. It loses to the top leader in terms of the risk component. “As practice shows, P2P investors are very sensitive to external unrest and reduce their assets, despite the presence of various protective investment functions. However, the return on such investments in Europe is obviously higher than similar fixed income instruments. The market itself is also steadily getting stronger,” experts add.
The last place in the ranking is occupied by the most controversial asset - cryptocurrency. The entry of new players into the crypto market is complicated by its strong monopolization. Moreover, the recent news about the collapse of the largest cryptocurrency exchange FTX pulled it even lower, which also decreased investor confidence in the crypto.
According to last year's study, metals were the least promising asset due to their low yield and high risk-volatility index.