The box of Bondora

My first loan Bondora was bought in May 2013, back then it was called Isepankur. Interest rates were insanely high in comparison to the German platform I knew, ranging around 20-35%.Auto Invest and G&G did not exist and solid profit was possible. Lucky times!

My first Bondora Investment

I have stopped to invest on the primary market more than 2 Years ago. I do not consider the primary market attractive and the portfolio manager is garbage. From time to time I buy stakes on the secondary market with large discounts, the rest running out loans and G&G.

I doubt that many investor had + profit within the last few years investing in the primary market. I see a lot of Finance Influencers and Bloggers who present their Bondora numbers with monthly losses. Of course there are exceptions,like Oktaeder, who´s blog I can highly recommend if you want to think out of the box.

He even has developed an own Invest API and drives exceptional secondary market strategies.

My Experience:

As already mentioned I was very lucky to join on the right time and those years it was possible to make solid profits.

What is happening since COVID19 ?

As you invest in projects directly and Bondora does not do any buyback guarantees COVID19 has not changed much on the primary market. Of course the risk of loan defaults for the investor has risen and I expect higher interest rates.

The exciting part is Go & Grow: There has always been doubts if Go & Grow is profitable for Bondora in tough markets times. On the German P2P Board a user has even replicated the G&G Portfolio. The board is only in German but I´ll try to summarize. What did he do ? He build a portfolio with the same loan mix as G&G and observed it for almost 2 years. The last months showed that the 6,75% are not sustainable, especially if you consider the liquidity reserve Bondora has to keep.

The second part of the story is the following announcement. Bondora limits the maximum amount which you can transfer to G&G per month to 1000€. Seems as Bondora came to a similar conclusion regarding G&G profitability.

My takeaways:

For the random investor do not touch the primary market or portfolio invest.

If you want to spent time with loan picking, go for the secondary market

If you just want to park your money short time, go for G&G but keep the last paragraph in mind.

Have a great week! Learn from my mistakes 🙂

Matt

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