Investing in 2023: Fighting Inflation, Volatile Stock Market, and Unregulated Products vs. Regulated Products

Inflation will continue to be a significant concern for investors in 2023. The annual inflation rate in the eurozone has increased to 10.0%. In response, the European Central Bank (ECB) has kept raising the key interest rate to counter the euro’s depreciation and give consumers some relief. This increase in interest rates does lead to a rise in the yields of government bonds, which reflects the cost of borrowing for the government. 

Income has also raised interest rates on the platform to help investors combat the inflation. Additionally, Income is developing a feature where longer maturity loans will yield higher, similar to the Par Yield Curve in government bonds, to reward for the uncertainty of the inflation in the future.

The bear market on the stock exchange is another area of concern for investors. While there have been signs of the bear market end, capital markets remain volatile. Investing in assets uncorrelated with other markets, like loans on Income, is a great way to keep excess cash. 

Loans on Income provide a monthly cash flow. As the loans get repaid, so does the investment. The repayments and earned interest can be quickly re-invested or withdrawn if other investment opportunities arise.

The collapse of the crypto exchange FTX and the multiple stablecoins slipping their pegs in 2022 triggered a regulatory and legal backlash that has only begun impacting the market. The European Council approved the Markets in Crypto-Assets (MiCA) Regulation, one of the first attempts globally at comprehensive regulation of cryptocurrency markets. It can be speculated that investors will start to choose regulated assets over unregulated ones in 2023. ETFs and government bonds are becoming more popular because they are regulated and safe despite comparatively low yields. 

As mentioned in our P2P Regulation Update – Estonia Income hopes to get regulated in 2023 but, while waiting, still strives to offer investors products from Loan Originators already regulated in their established countries. 

Bulgarian-regulated ITF Group offers loans with up to 15% yield on the Income platform. They also had a successful IPO on The Bulgarian Stock exchange last year. Another regulated Loan Originator is DanaRupiah, which offers loans with up to 15% yield p.a. DanaRupiah is regulated by the OJK and operates under the P2P Lending Provider regulation.

In conclusion, 2023 continues to pose challenges for investors in terms of inflation, the bear market on the stock exchange, and choosing between regulated and unregulated products. Income is dedicated to helping investors combat these challenges by developing new features with higher yields and providing access to regulated Loan Originators. 

By staying informed and taking advantage of opportunities in assets that don’t correlate with other markets, investors can navigate these challenges and make profitable investments in 2023.

The first platform with secured investments in loans with yield up to 15% annually.