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It gives the possibility to any investor to activate an Auto Invest strategy in 1 click without the burden of selecting the parameters.
This strategy has no filters and dynamically adjusts the maximum invested amount per loan to ensure a high diversification level while limiting the idle money on the wallet.
Why?
There are 2 main reasons for that.
First, we have more and more new investors who open an account with Klear for regular saving, for example by sending each month money through their Re:Benefit account. Most of them don’t want to do anything when they start. They just want to be sure that their money is invested, and they look for the average return. Hands off!
We also noticed a few suboptimal patterns among investors using Auto Invest. For example, some start with a low diversification by setting up a too high “Maximum Outstanding per loan” value. Another situation is when someone forgets to adjust this value over time and that leads to a progressive accumulation of idle money on the wallet which does not bring any return.
How does it work?
We have built an algorithm that takes into account the supply and the demand of loans, now and in the future, to dynamically adjust for each investor the maximum amount per loan every hour before the Auto Invest batch runs or when a new deposit arrives on the wallet.
The calculation uses the overall number of loans available on the Primary Market, the forecast of the newly financed loans in the next 30 days and, for each investor, various KPIs like the expected amount to be repaid in his wallet in the next 30 days, the number of loans available on the Primary Market in which he has not yet invested in, his outstanding and the money in his wallet.
With these parameters, we have a formula that optimizes all the situations: an investor starting from scratch the first time he receives money on his wallet, an investor with a stable portfolio simply reinvesting his regular proceeds and an investor who is topping up on an existing active portfolio.
Can I keep using my custom strategy?
Of course, this Standard strategy is simply a new option. You can keep using your own custom Auto Invest strategy or create a new one. And you can also simply do manual investment by picking up yourself the loans on the markets.
At any time, you can switch between Standard and Custom, activate or stop any of them!
Can I put filters on this Standard strategy?
No. We thought about that, but we abandoned as it would be too complex and unstable. The algorithm would require the forecasts to consider the filters. In many cases, we’ll end up with too small numbers for reliable statistics and forecasts.
Is it the best possible strategy?
Well, the best strategy is obviously different for each investor, so the best is yours!
Joke aside, this standard strategy does not pretend to be perfect. But we believe it is a very good no-brainer solution for anyone who wants to start investing without making mistakes and with the comfort of making the most out of his money.
