In the recent years, Bitcoin has captured the attention of many Singaporeans. We are gradually embracing the new wave of modern transactions – the rise of cryptocurrency! Despite its exposure, you may still be wondering what exactly it is.
BITCOIN DEFINITION
In its core, bitcoin belongs to an alternative type of payment system called cryptocurrency. It is a digital asset that enables you to conduct transactions outside of the mainstream financial infrastructures. Balances are securely stored using private and public keys. I am not referring to the metal keys that help open doors! Instead, these keys are linked through the mathematical encryption algorithms.
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One of the most challenging parts of sustaining a digital transaction is ensuring that nobody spends the “same bitcoin” more than once. As you can imagine, almost anything digital can be copied over and over again! Regulation is crucial to cryptocurrency. Traditionally, verification was done thru trusted central authorities (e.g., PayPal). What makes bitcoin special is its utilization of a huge peer-to-peer network to verify transactions. Bitcoin payments are non-reversible, transaction fees are significantly lower, and its corresponding accounts cannot be frozen.
BITCOIN FUNDAMENTALS
1. History: Its origin dates back to 2008 when it was created by developer Satoshi Nakamoto.
2. Operations: Transactions are fully transparent due to the publicly available ledge known as the “blockchain”.
3. Security: As mentioned above, a bitcoin transaction consists of a public key (i.e., known to everyone) and a private key (i.e., exclusive to the bitcoin user). You cannot spend coins without knowing its private key.
4. Purpose: Bitcoin provides a viable alternative to the dealings within mainstream financial infrastructures. It eliminates the hefty transaction fees and the transportation expenses.
BITCOIN MINING
The bitcoin network is only as strong as the people and institutions supporting it. It is not created by the simple copy and paste tool! Instead, you need to mine for the digital assets using extensive computers that solve complex equations. Bitcoin miners are crucial to the completion of transactions and the validation of genuine bitcoins.
Without bitcoin miners, no new coins will be brought into the circulation as no rewards would be given.
With Funding Societies, you can invest into the following 2 products:
Business Term Loans – Loan given to SMEs for working capital, fulfilment of contracts, acquiring new contracts etc. with tenors ranging from 1 month to 12 months. As an investor, you receive principal and interest on a monthly basis thus unlocking the cash and allowing you to reinvest the monies into new loans.
Invoice Financing (Accounts Receivables Purchase) – Funding provided to SMEs against the invoices issued to their buyers/debtors/clients with tenors ranging from 30 days to 90 days depending on the invoice credit period terms. Investors receive repayment at the end of 30/60/90 days along with interest.
Every deal could have a few hundred investors investing alongside you and thus you fund a small part of each loan/invoice and therefore also bear the same small part of the risk.
Receive your subscription agreement and e-sign it! (Fun fact: Funding Societies is the first P2P lending platform that has e-signing of contract so that their investors can do it on their computer or mobile anytime, anywhere)
Make your first deposit of minimum $1,000
Browse for opportunities on web or app platform
Start investing from as little as $100
Turn on Auto-Invest to let the system allocate investments based on your pre-set criteria
How do I choose which investments to go for?
Before every crowdfunding opportunity, you’ll receive an email alert for the deal. There is a detailed fact sheet that you can review hours before deciding to put your money in the loan.
Some of the investors on Funding Societies platform have placed their monies on every loan by either (i) manually investing when the crowdfunding period starts, or (ii) auto-investing (see point #6 above). For every auto-invested loan, you always have a choice to opt out from the investment before the crowdfunding starts.
However, different investors have different risk appetite, so it is common practice, and also a good one, to explore the platform and view the various opportunities before making your investment decision.
How do I track the repayments and performance of the investments?
When you invest on Funding Societies platform, the repayments are on a monthly basis.
As an investor, you will also receive late repayment fees from SMEs who did not make the repayment on time – but hey, when you share the risk, it’s only fair that you share the returns right?
Common strategies to invest in P2P lending
While there is no one-size-fits-all formula for any type of investment, Funding Societies shares three ways you can explore for your investment portfolio with them:
Diversify, Diversify, Diversify
As a matter of fact, investing in P2P lending is already one way to diversify your investment portfolio. However, within P2P lending, it makes sense to diversify your portfolio into different loans – by industries, amounts, tenure – to minimize the default risk.
Create compounding effect by re-investing
Funding Societies’ repayment schedule is on a monthly basis, that means you get your original invested amount + pro-rated interests back every month based on the stated dates. While you can hold the money in the account, a smart thing to do is to use this for other investments on the platform to create a compounding effect.
Free your time with Auto-Invest
As mentioned, Auto-Invest is a feature Funding Societies created to allow their investors to put in their money for loans based on their preferred criteria. Here, you can choose a range of interest rates, tenure, industries. Once it’s set up and switched on, the algorithm sets in to auto-allocate your preferred amount for the loans that fall within your criteria.
Start exploring P2P lending as an alternative investment now with Funding Societies. Sign up now by clicking here.
Disclaimers
This article is contributed by Funding Societies.
It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.
Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.
What is crucial in trading? Is it trading? Definitely, it is not trading. There are many other things which should be considered as crucial. As examples, selecting a broker is crucial, selecting a platform is crucial, selecting a trading method is crucial, and there are many other things which are crucial. Sadly, most of the traders give less attention to the crucial parts. If you consider the Singaporean traders they are not as the ones we have mentioned above. They have given 100% attention to the crucial part of trading as they knew that the platform plays the major role in Forex. So if you want to trade the market as a successful trader you should learn to take the important decisions. How do you make the right decision? What will a naïve trader do? What are the key factors to be considered? If you read the article you will definitely understand the importance of a platform and you will understand the ways to make a decision.
As we said above platform is one of the crucial things in your trading career so you should give the necessary attention to it. If the platform does not suit your trading style then it will be difficult for you trade the market. When you are not comfortable with the platform you cannot trade successfully so you should make sure that the platform is comfortable enough. You should not consider the decision of selecting a platform as a minor thing because it is not. Read the article to understand better.
Wider accessibility
You know that mobile phones are something which everyone one of us carry anywhere we go so it’s important to find a platform which can be accessed through your mobile phone. From booking a hotel to reserving tickets to movies will be done through the mobile phones so why not the platform? If the platforms are accessible through the mobile phones it is a great exposure for the traders. In fact, it will enable you to trade online meaning you can place trades online. Every professional trader takes the time to select the best platform as they need a platform which offers the wider accessibility. If the platform offers wider accessibility it is advantageous for the trader’s career and knowledge.
Essential Information
The essential information should be obtained from the platform so it can be called as the best trading platform. So keep in mind when you are searching for a platform it should be something which offers you standard experience and essential information. If you want to know the price-earnings ratio, income statement, stock quote, dividend yield, or anything you should be able to obtain it from the platform itself. If you are able to get hold of a platform as we mentioned above you will be able to succeed in the market easily. You should understand that platform is something which acts as a basement for your trading so it’s in your hand to select the strongest basement. Moreover, you should not select a RANDOM platform to trade as it will impact heavily on your trading career. Keep in mind that each and every successful trader has achieved success due to being intelligent when selecting the platform. If you want to trade like a pro trader and if you want to become successful you should not treat crucial things as a minor factor.
Tools for trading
You will be able to obtain the trading tools from the platform so make sure to pick the perfect platform by analyzing thoroughly. If you have the smart tools you will be able to execute trades in a successful way. For instance, if you trade with SaxoTraderGo platform then we can assure you that you will have all the cutting trading tools to do your technical analysis. Most importantly you will be able to execute your orders at a lightning speed.
P2P lending, popularly known as crowdfunding, provides individuals and institutions an opportunity to earn passive income through investing in business loans to growing and deserving SMEs. Returns on investment are in the form of repayment of periodic interest along with the principal, based on the amount that investors have put in. In a single loan, there could be hundreds of investors who co-invest and share the risks and returns of investment.
This concept first appeared in 2005 with Zopa (founded in the UK), and has become a proven investment product globally. In 2016, more than US$330 Billion has been invested in P2P lending with China, US and UK as market leaders.
Can you guess where’s the next region of growth for P2P lending? That’s right – Southeast Asia. Funding Societies (based in Singapore, Indonesia and Malaysia) is one of the leading platforms in this region with licenses/approval by regulators in all 3 markets.
Here, we give you 5 compelling reasons to put your money into P2P lending :
1. Returns are higher than most traditional investment products
One of the key factors in any investment is what you get in return.
2. And you don’t need to wait for years to see your returns
The typical tenure for these business loans range between 1-12 months, so unlike fixed deposits or insurances, you don’t need to lock your money in for years to see the returns. In addition, you get the interest as well as principal back on a monthly basis, allowing you to unlock the cash and provide opportunities to reinvest the money and creating a compounding effect.
3. You can invest even if you’re a fresh grad or NS man
Funding Societies is the only platform that allows investments starting from as low as $100 (minimal investment on other platforms is usually $1,000 per loan), which means literally anyone can invest. It allows one to test the platform before increasing the amounts and also provides opportunities to diversify into multiple loans even with a small starting capital.
4. It’s a simple product that doesn’t require any technical knowledge
Some investment products require a high level of technical knowledge plus a close watch on the market movements.
P2P lending is simple and straightforward. It’s easy to understand the factsheet (prepared by the platform) which covers the SME’s business model, track record, financials and purpose of loan. Investors can make decisions based on the factsheet. If you are too busy to review every factsheet, Funding Societies has an auto investment feature which lets you select your investment criteria and make the investments automatically.
5. Southeast Asia’s leading P2P platform is in Singapore
Most Singaporeans prefer to invest with companies with (i) a solid track record, (ii) operations in Singapore.
Since starting its operations in Singapore, Funding Societies has already expanded to two more Southeast Asian countries over the last two years – Indonesia and Malaysia. It is the only P2P lending platform to have won Monetary Authority of Singapore (MAS) Fintech Award in 2016 and was recognised as one of the Top 250 Fintech companies globally. It is backed by world class venture capitalist Sequoia Capital who have invested into companies like Google, Apple, Airbnb and Carousell amongst many others.
More than 19,000 investors are already on Funding Societies’ platform regionally, and the reasons:
LICENSED AND REGULATED: Funding Societies is licensed in Singapore by MAS and is a regulated entity. It uses escrow account for investor funds managed by a licensed trustee ensuring safety of investor monies.
HIGH QUALITY INVESTMENTS: Because of the rigorous risk assessment that Funding Societies does on the companies before offering the business loans for crowdfunding, the investments are good quality and at the lowest default rates in town.
EASY TO INVEST: Investors can make their investments and review their portfolio on the go with Funding Societies investor mobile app. With Auto-Invest, investors just need to define their preferred parameters and let the system do the work.
SKIN IN THE GAME: The top management at Funding Societies believes in ALL the business loans that they give, they invest in every single loan. As CEO Kelvin Teo says, “We co-share the risks and rewards of investments with you.”
BEST CUSTOMER EXPERIENCE: Funding Societies swept the “Best in Customer Experience in Asia for Alternative Financial Services” awarded by Retail Bankers International just this year and is constantly raising its standards in ensuring the users have all the information they need and are well taken care of.
It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.
Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.
The trading of currencies on the open market serves many practical purposes. It enables individuals to purchase local coinage when visiting a different country or region. It allows governments to regulate the supply of money within their own economies. It also provides an opportunity for traders to realise a profit, simply by speculating on the price movements of different currency pairs. Each of these contributes to the vast size and scale of trading activity that occurs within the foreign exchange market every single day.
How big is the forex market?
The FOReign EXchange (forex) market is is the single largest financial market on the planet, when measured in daily trading volumes. Each day, around $5.3 trillion worth of currency is bought and sold on the open market. That equates to more than $220 billion of trading activity every hour.
The volume of forex trading far exceeds that of the bond market or the stock exchange – and even the economies of entire nations.
The New York stock exchange, for example, would have to trade for 30 days to match the single-day trading volume of the currency market. The combined annual GDP of Russia, Italy, and India is approximately equal to one day’s forex trading.
A brief history of forex trading
The trading of one currency for another is an ancient phenomenon, but the modern forex market truly emerged in 1971, with the completion of the Smithsonian Agreement.
The agreement allowed the central banks of ten major economies to buy, sell and issue currency in a way that would allow their money to fluctuate in value by 2.25 per cent against the US dollar. The Smithsonian Agreement is widely accepted as the first step towards the free floating exchange rates that we recognise today.
The proliferation of web-based technologies in the 1990s proved another significant milestone in shaping today’s forex markets. Access to the internet gave private individuals the means to not only access markets, but also the educational resources that would help them to understand forex, and how to start trading. Since the end of the 1990s, the number of forex trades that are executed through an online platform has grown exponentially: accounting for as much as 23 per cent of all forex activity by 2016.
Digital trading platforms have also eased the transition to an era of automated trading: where algorithms are used to calculate and execute trades far quicker than any human could hope to achieve. The forex market grew 20 per cent between 2007 and 2010 – and much of this expansion has been attributed to the development of high frequency, algorithmic trading machines.
Who are the big players?
This rapid expansion of the forex market has caused some of the established currencies and institutions to lose a degree of significance in recent history. Yet the biggest players in the foreign currency trade remain some of the more familiar names in the world of finance – for the time being, at least.
The most commonly traded currencies by share of total transactions are the US dollar (which accounts for more than 87 per cent of all trades), the Euro (31 per cent), and the Japanese Yen (almost 22 per cent). Of these, EUR/USD is the most commonly traded currency pair, accounting for 23 per cent of all trades in 2016.
International banks dominate forex trading: the largest six banks account for half of all transactions; the top ten banks are responsible for more than 65 per cent of trades. Citigroup (13 per cent), JP Morgan, (9 per cent), UBS (9 per cent), and Deutsche Bank (8 per cent) are the four most active financial institutions in the forex market.
Where is forex traded?
Forex is a truly global marketplace. Four major trading centres – in London, New York, Tokyo and Sydney – provide access to the currency markets 24 hours a day. Of these, London sees the highest trading volume, accounting for 37 per cent of all currency trades.
However, while the City of London is responsible for a high percentage of daily total trades, it does not regulate or control the market in any way. In fact, the trade in foreign currency is not facilitated by any single authority or centralised exchange at all. Instead, traders can buy or sell currency pairs directly with other traders in the market. This form of direct exchange is known as an over-the-counter (OTC) market. OTC trading is considered one of the primary factors in the growth of forex: independent investors can access and participate in the market from any location, at any time of the day or night.
The foreign currency market has undergone dramatic change, and experienced rapid growth, throughout the past five decades. It has adapted its role to make use of new technologies: permitting free-floating currency valuations, and enabling private individuals to participate in markets without having to leave their homes.
Today, the forex market continues to evolve, and represents one of the most open and democratic trading opportunities on the planet. But the buying and selling of world currencies represents more than an investment: it is helping to make efficient world trade a reality.
