In the ever-changing landscape of Indian financial markets, one thing remains constant: uncertainty. The India VIX (Volatility Index) serves as a stark reminder that market swings can happen at any moment, potentially impacting your investment returns in traditional avenues. Whether the VIX rises or falls, these fluctuations can leave investors feeling uneasy about the safety of their hard-earned money.
But what if there was an investment option where you didn’t have to worry about these volatility swings? Enter Peer-to-Peer (P2P) lending, a modern approach to investing that offers refreshing alternative investments.
In this blog post, we’ll explore how P2P lending stands apart from conventional investment methods. We will explore the reasons why your P2P investments can remain stable even if the India VIX is rising or falling. Learn how you might potentially get consistent returns without the exhilarating ride of market volatility with this cutting-edge platform.
Understanding Market Volatility
What is market volatility?
Market volatility describes the frequency of security price movement up or down. Bigger fluctuation refers to more price swings and the more volatile the market is said to be. Often people associate volatility with market price falls.
What causes volatility?
There are several factors that cause volatility in the market as listed below:
- Political and economic factors
- Industry and sector performance
- Company performance
Volatility depends on internal and external factors that go through the period of uptrend and downtrend.
What is India VIX?
India VIX or India Volatility Index is calculated by NSE to measure the market’s anticipation for volatility and fluctuation in near term. It was introduced by NSE in 2003. However, originally it was introduced by the Chicago Board Options Exchange in 1993.
Understanding India VIX in the stock market:
Volatility and India VIX have a positive association, meaning that high volatility corresponds to high values of India VIX. For instance, the India VIX was stable prior to COVID-19, with a major low of under 30 since 2014. However, since the pandemic began, India’s VIX score has risen to 50. The equities index traded at the 8000 level and lost around 40% of its value throughout that time.
How can P2P be a better investment option?
As of August 5, 2024, the Indian stock market experienced significant losses. The two primary market indexes, the Sensex and Nifty, fell precipitously. The Nifty dropped 662.10 points to conclude at 24,055.60, while the Sensex shed 2,222.55 points to close at 56,941.47.
However, investing in P2P can be a better option than losing a large amount of money during a market volatility swing. Entering Peer-to-Peer (P2P) lending is a modern approach to investing that offers refreshing alternative investments. Exploring the world of P2P lending involves understanding the risks and returns – it’s like finding a balance between earning rewards and being cautious about potential challenges.
Understanding P2P lending:
Peer-to-peer (P2P) investing is a modern financial approach that connects borrowers directly with lenders through online platforms, bypassing traditional financial institutions. In this system, individuals or businesses seeking loans apply through P2P websites or apps.
Investors, acting as lenders, can then choose to fund these loans based on their risk tolerance and desired returns. The P2P platform facilitates the entire process, from matching lenders with borrowers to managing loan repayments. This model offers potential benefits for investors, such as higher returns compared to conventional savings accounts and the ability to diversify across multiple loans.
However, it also carries risks, including the possibility of borrower defaults and the lack of government-backed insurance. P2P investments can cover various types of loans, including consumer, business, real estate, and invoice financing. Investors generate returns through interest payments on the loans they fund, with the P2P platform typically taking a small fee for its services.
This innovative approach to lending and borrowing has gained popularity due to its accessibility and the potential for mutually beneficial financial relationships outside the traditional banking system. Monexo stands out from various P2P companies by offering investors the potential to earn returns with interest rates of up to 13%. This high yield potential is significantly above what most traditional savings accounts or even many other investments.
Conclusion:
All people can benefit from investing, but getting good returns on each investment is crucial. People are concentrating on investing in today’s world to live comfortable financial lives. Thus, begin your financial adventure with Monexo to enjoy stress-free finances and excellent returns.
