Quanloop took a novel approach to portfolio diversification for its investors. A large portion of the risk-reducing functionality is just a feature without sufficient safeguards. This article will help you understand what is hidden behind Quanloop’s portfolio diversification, what its main features are, and why you should use this platform to gain profit.
Why do individuals use investment platforms? It’s simple: to gain profit. Also, their most sacred wish is to get as much money as possible while maintaining the lowest risk. That’s when all the risk-management plans come into play. Most investing platforms let you choose between hands-on and automatic diversification to maximize your profits. A lot of investing enthusiasts don’t know (or, let’s be honest, don’t want to know) how to use automatic diversification to the fullest. There are different reasons why this happens, but the thing is that without the correct data on risks, people are not that eager to use their money as investments.
That’s where Quanloop comes to the financial rescue. The company aids the enthusiasts in forming a portfolio in such a way that they can easily and, what is even more important, safely diversify it. It’s not a diversification system though; it’s an investment platform that has a diversification system incorporated in it.
Before we cover the peculiarities of the Quanloop diversification system, we have to talk a bit about the risks that come with investing.
What are the risks?
First of all, a potential investor has to bear in mind that there’s always a chance of losing whatever money they invest. Some people may say: “Yes, but you can minimize the chance by diversifying your investment.” That’s true; however, it’s not that simple.
When diversifying one’s investment, it is crucial to remember not to put all eggs in one basket. People with little to no expertise may want to find a financial area they find the most appealing for the investment project and put their money in it. In theory, it can work. If the market continues to drive the investment option upward, this might theoretically result in a substantial profit. However, it is hard to call this approach a diversification as it is both costly and useless if the economy fails since assets would react negatively to a particular economic event. Basically, it’s the absence of diversification.
That’s why it is essential to understand and anticipate all possible risks that a potential investment can impose so that you can prepare yourself in case of a potential loss.
What does Quanloop offer to its clients?
To put it simply, Quanloop is an alternative investment fund. For a short period of 24 hours, it borrows modest amounts from investors by entering into a large number of agreements with a minimum principal amount of €1. Lending to Quanloop partners, who are expert leasing and factoring businesses, involves first pooling together several short-term loans with very small principals. Due to the competitive nature of Quanloop, your investment will be given preference if your suggested interest rate is lower than that of another investor.
The Quanloop diversification program is divided into three risk-level systems and is visually explained on its website. For example, you have 1,000 euros that you want to invest. The first level (low risk) allows you to put all your money into it. If you choose to divide your investment between low and medium levels, you will get a 50/50 ratio. If you want to engage your money in all three levels, it will be divided into three approximately even shares.
Another useful feature of Quanloop is that it doesn’t allow you to put all your money into the medium- and high-risk plans, always keeping a particular sum of your investment in a relatively safe environment.
There is one thing that may keep potential investors reluctant. It is Quanloop’s desire not to provide information about its partners. Fortunately, people who want to invest via the platform won’t need to fret about it for a variety of reasons:
- They are highly selective about the projects they handle. They have alliances with reputable companies all around Europe.
- When lending money to the Partners, Quanloop takes collateral in their assets. If there is a default, these assets will be gathered by Quanloop and sold to pay back the lenders.
- If the business fails, investors will get their funds back. It works only because investor money is kept in a discrete client account that is never used to cover operational expenses or wages.
- The client interacts only with Quanloop; therefore, the responsibility of repaying its investors lies solely on the investment fund.
- What’s more, there even exists a special mechanism assuring the payment in the case of default. The fund takes responsibility and uses its own reserves to satisfy its investors.
Using this approach investors are able to reduce their risk profile saving optimal risk-to-return balance. Though Quanloop reduces risks and offers steady returns, it is a good diversifier of avid investors’ portfolio, even if some people may believe it’s a stretch. Investors may reduce their exposure to risk without sacrificing potential gain by using diverse risk plans. Although it may seem far-fetched to some, this investment in Quanloop is a well-balanced diversifier of your portfolio since it lowers your exposure to risk and generates consistent returns.