Avoid These 7 Investing Mistakes in 2020

Disciplined investing helps you to create wealth over the long term. But without the right information and knowledge, you might lose your money! In the year 2019, the stock market was volatile creating problems for equity investors. The debt market investors too faced huge problems due to rating downgrades and default in repayment by the borrowers.

In the year 2020, we explore the P2P investment option and also analyze the dos and don’ts of investing.

Why is P2P Lending Ideal In 2020?

A new investment option in your horizon is peer-to-peer or P2P lending. P2P lending allows you to lend to individual businesses at various rates of interest depending on the risk background of the individual. You can improve your returns and reduce the associated risk. Here are the benefits of P2P lending:

Higher Returns

Though returns cannot be guaranteed, there are different borrowers who have different risk grades. You will get higher interest rates on the money invested by you.

Investments in conventional avenues like FDs have seen a drastic fall in interest rates. If you take inflation into account, the returns are negative. So if you are looking for investment avenues safer than equity but providing attractive rates of return, then you can consider P2P investing.

Convenient process

Investing in P2P platforms is easy with online registration, easy transfer of funds and low entry cost. You can start investing with as low as Rs. 1000. The entire investment process takes just a few minutes. When the loan matures, you can withdraw the money.

Portfolio Diversification

You can look at the profile of the borrowers and spread your investments over the different risk grades to earn a decent rate of return at a reasonable risk. The credit rating is provided by the P2P platform based on the credit rating of the borrower and past repayment record. The higher the risk, the higher the interest rate payable.


While investing in certain conventional instruments like bonds, you do not have an insight into the instruments themselves. In the case of P2P investing, you will find detailed information about the borrower on the loan to assess the risk. You can allocate funds to the particular borrower accordingly.

7 investing mistakes to be avoided in 2020

  1. Timing the market

You should not wait for the stock market to fall and then start investing. Instead of trying to time the market, you should ensure you spend more time in the market. Equity investment is for the long term and with long term investments, it is imperative that you have a pre-decided goal. You should have a financial goal from which you can work backwards in order to plan your investments wisely.

  1. Impulsive Investing Decisions

Stopping your systematic investment plan or SIP in mutual funds when markets crash is the biggest mistake as you can average your cost of investment. Redeeming your investment in these times is even worse. Since equities are a long-term investment, don’t pay attention to short-term fluctuations instead focus on investing over time. Discipline lies in the centre of investing for the long-term.

  1. Over Diversifying your portfolio

You don’t need more than 5 or 6 funds to have a diversified portfolio. Having more funds in your portfolio adds to the confusion. There are many funds which have the same portfolio of stocks. Mutual funds ensure risk diversification of your investment by investing across various sectors like pharma or financial services and different companies as well.

  1. Depending on past performance

Just relying on past performance means you are exposing yourself to risk. The fund manager might have performed well under a particular market situation which might not be replicated in future. You need to look at the objectives of the fund and see that it matches your goals. The asset management company’s track record is more important. You should also consider the tax benefits you will derive when you invest in that particular fund.

  1. Investing heavily in fixed income products

Allocating a major portion of your portfolio in debt exposes you to inflation risk. While they might be safer than equity, their real rate of return or return adjusted for inflation might be negative. This means that after a point of time you are at risk of not having sufficient funds to meet your expenses, especially post-retirement. The right asset allocation as advised by a qualified financial planner depending on your risk profile to ensure that your portfolio return helps you to combat inflation.

  1. Emergency funds

Emergencies strike without a warning, so you need to set aside at least 3 to 6 months worth of your household expenses. You should incorporate your EMIs and insurance premiums. Not planning for tax savings in advance. When you want to avail of tax deductions under Section 80C through investments in mutual funds or other options, make sure that you plan for them well in advance.

  1. Do not count your insurance as an investment

Although there are some insurance schemes that will provide money-back offers, the insurance should not be considered as an investment option. The objective of insurance schemes is to provide a safety net for you and your family in times of need. Make sure to invest in health insurance and life insurance with the goal to safeguard yourself, and not to build an investment corpus.

Why Choose a Lending platform like i2i?

Peer to Peer lending platforms such as i2i have been providing inflating-beating returns starting from 12% to 36% which depends on the borrower’s risk category.

You get a safe investment option with high returns since the borrowers are screened and the delayed payment rate is just 0.26%. The returns are much higher than bank FDs.

You are investing through a legitimate option as i2i is legally permitted to do business by the Reserve Bank of India. There are 100 parameters used to screen the borrower for 360-degree analysis of the borrower. With good quality borrowers, the delay in EMI payment is also negligible.

Borrowers are classified from Category A to Category F, this provides great opportunities to diversify and reduce your risk. You can match your investment tenure with your financial goal. The maximum tenure at the i2iFunding platform is 36 months. The charges for using this P2P lending platform are very low at just 1%.

You can create a regular flow of income on a monthly basis when the loan given by you is repaid by the borrowers. With high returns and low risk, P2P lending will ensure stable and higher returns in this volatile environment. So if you want to earn a regular monthly income and create wealth on a consistent basis, go for P2P lending.

What are you waiting for? Visit the i2iFunding platform today!

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