top 3 investments for 2021

Let’s have a look at how each of my investments performed during a year that few of us will likely ever forget and discuss my top 3 investments for 2021.

You’ll also find out where I’m planning to invest most of my money this year and why. As an added bonus, I’ll make some unqualified predictions on which one of my investments I expect to perform best in 2021!

Before we get into the article though, I want to wish all of you a happy new year! I hope you were able to relax and enjoy the holidays with your loved ones.

Alright, let’s dig in!

My Top 3 Investments for 2021

Before we get into each investment, please remember that none of this is investment advice, just my personal opinion. So please always do your own research and never just blindly follow what someone else is doing!

Also, I have a very high risk tolerance due to my low living expenses, which allows me to save and invest a good chunk of my income on a monthly basis and I’m only 30 years old.

Your situation may be different, so just keep that in mind.

ETFs

First, we have ETFs. If you’re new, you might be surprised, as the site is called P2P Investing Europe.

But, as I have discussed before (here and here), the largest percentage of my investment portfolio is in low-cost, exchange traded funds (ETFs), replicating a broad stock market index.

I don’t buy individual stocks, as I don’t like placing bets on which single companies are going to perform well. For me, that would usually end up with me constantly checking my brokerage account and doubting if I made the right investment, if I should sell or buy more and so on.

It would also cost me too much time to research each stock before buying it, to stay up to date on everything that the company does and what their competitors are up to. All in all, It’s just too much of a hassle for me and not my style of investing.

Instead, I like to keep things as simple as possible, by investing in a single, passively managed exchange traded fund, the Vanguard FTSE All-World.

vanguard ftse all world etf

Via a single ETF, my investment is diversified over 3.470 different stocks from all around the world, based on their market capitalization. And this also includes companies in emerging markets, like China or India.

I don’t want to place bets on specific regions doing better than others, as I just don’t know what’s going to happen over the next couple of decades. This way, no matter where innovation happens, I’m able to profit from the growth of the world economy as a whole long term.

vanguard ftse all world etf countries
Country allocation of the Vanguard FTSE All-World ETF (Nov. 30, 2020)

Opening a brokerage account on Degiro shouldn’t take more than a few minutes, in case you want to get started with investing in stocks and ETFs. This post should also provide you with more useful information.

If you’re a German or Austrian resident, I recently added the entire list of brokerages I use to my investor toolkit.

Throughout 2020, my wife and I put most of our available cash into ETFs. Sadly, like probably some of you, we had less available money when the market was the lowest in March, as both of us were earning less due to less available work when the crisis hit.

Still, we kept buying more ETF shares on a monthly basis when we could.

Here is how our ETF portfolio performed in 2020:

etf investments 2020
I use the free tool Portfolio Performance to track my investments

Our ETF portfolio grew by 5.939,88€ in 2020, out of which 1.048,78€ came from dividends we received throughout the year.

I certainly can’t complain, considering the circumstances.

For 2021, I plan to invest 1.000€ per month into my one ETF strategy.

Since it looks like my wife might have found a new job after having a bit of a hard time with self-employment over the past year, we might be able to increase that amount, but let’s see.

P2P Lending

Let’s get to my second most important investment in 2021, P2P Lending.

This has definitely been a hard year, full of painful lessons for many people in the community. It started in the worst way possible and I’m not even talking about the lockdown measures yet.

Three platforms I was invested in either completely disappeared or used the virus as an excuse to stop people from withdrawing money from their accounts.

I’m talking about Envestio, Monethera and Grupeer. The sad part is, in all 3 cases I had just decided to withdraw my investments for different reasons and after sharing my thought process on the blog and in a video. Sadly, that was too late and I lost access to 6.660€ of my own capital on the three platforms.

PlatformInvestedValue
Envestio2.807€?*
Monethera1.028€?*
Grupeer2.825€?*
Total6.660€TBD*
*Counted as a loss for now, I’m hoping to recover some funds. See links for details.

I let myself be blinded by the high interest rates, the good reviews from other bloggers which I thought were based off more than just positive personal feelings regarding the management and honestly, I didn’t do enough due diligence myself.

Grupeer was by far the biggest surprise for me and many others, as I had met the team personally in their office back in 2019. And while they did feel a bit chaotic at times, they were very likable, open to answering any questions and a large number of people were working at their company.

Anyway, that chapter is closed for now, until the ongoing legal cases against them are finished, which will likely take some time. That’s also when we will know how much money can be recovered.

This taught me an important lesson. To never blindly trust personal feelings and emotions when it comes to investing and to instead focus on hard data, like audited financial statements about each company. Also, when a company regularly changes its banking details, something is probably off.

After all of this happened, I restructured my P2P lending portfolio to only include platforms that have a clear business model and if possible, audited financial statements.

I’m looking forward to more regulation in the sector in 2021, which has been announced already and will provide us investors with more protection.

Anyway, if we exclude what are likely fictional earnings from Envestio, Monethera and Grupeer, I earned 2.965,44€ in interest from P2P lending last year. That would be almost double what I earned in 2019, had I not made those stupid mistakes.

I’m positive that at least some of my funds from the three platforms can be recovered, but it could still take some time. If I were to actually lose the entire amount I invested there, that would mean a very painful loss of 3.694€ from P2P lending in 2020.

If we include what I earned from the other platforms since adding this asset class back in September 2018, I “only” lost 1.847€ – if as mentioned, none of the funds can be recovered.

Still, if things go as planned, my investments in peer to peer lending should be back in the green by mid 2021.

That being said, let’s take a look at my selection of platforms going into 2021.

My P2P Lending Portfolio for 2021

Here is what my crowdlending portfolio looks like as of January 1st, 2021:

p2p lending portfolio 2021
PlatformAllocationCurrent ValueNotes
Mintos33,37%10.331€
Crowdestor22,56%6.986€
Lendermarket11,12%3.442€1% Bonus
Bondora Go & Grow10,39%3217€5€ Bonus
Viainvest9,03%2.797€10€ Bonus
Iuvo Group8,95%2.772€1,5% Bonus
EvoEstate2,37%733€0,5% Bonus
EstateGuru1,63%504€0,5% Bonus
Mintos Invest & Access*0,58%180€
Total100%30.961€
*I’m currently closing this position.

Obviously, the still ongoing pandemic has hit this sector as well, with some platforms and loan originators handling the situation a lot better than others. Nonetheless, I’m happy with my current selection of crowdlending platforms going into 2021.

Even with the hard setbacks in 2020, I’m still excited about this sector as a whole. I expect my investments here to do well once the world turns back to normal.

They will hopefully also provide me with stable monthly cashflow and act as diversification if or when the stock market crashes for example.

Cryptocurrencies

I did not expect to talk about cryptocurrencies this often, but due to recent events, I kind of have to. Make sure you check out this post I created on the topic recently, if you want more details about my 3-year experience with them so far:

Anyway, let’s recap. I started my speculative investment in Bitcoin and Ethereum in 2017. Back then, as I got caught up in all of the hype, I invested a total of 20.100€.

It was a large chunk of my overall investments at the time, as I also had only started my stock investments not that long before via ETFs.

I was very happy with the choice on the way up, when my investment tripled to 67.000€ at the top, but it felt horrible when I didn’t sell anything and it went all the way down to 8.000€ at the bottom in December 2018.

I’m telling you this so that you know what can happen if you decide to get into this highly volatile asset class.

So what happened in 2020?

My Bitcoin and Ethereum started the year still in the red, being worth about 14.100€ in total, less than my initial purchase price.

Well, by the end of 2020, their total value had grown to 51.498€!

Since they grew even further since then, close to the same level I had last seen in the beginning of 2018, I recently took out my initial investment.

I will let the rest ride, wherever it may go. At least this way, I can be a lot more relaxed about it.

I’m not planning to invest any more money into cryptocurrencies in 2021, as they still make up a good chunk of my total investment portfolio, even after the recent withdrawal.

The only point at which I may add more money is if we see a massive crash, similar to the one we had in March last year, as that could be a good buying opportunity. But only if I have the available cash.

Ideally, I would like to have 10% of my investment portfolio allocated to digital assets like Bitcoin and Ethereum long term. I see them as a great alternative to precious metals like gold, but with a lot more upside potential (yet also more risk).

Here are three exchanges I use and trust, which should help you get started in case you’re interested:

Which Investment Will Perform Best in 2021?

Here are my predictions for how each of my investments are going to do in 2021, which is also based on the current environment we’re in, with central banks printing a seemingly never ending amount of money.

Once again, this is not investment advice, just my own unprofessional opinion as a 30 year old investor.

We will revisit my predictions at the end of next year and see how things actually went!

I think asset prices will keep going up, also helped by a post-pandemic market recovery. A lot of that is of course already priced in, but I still think the stock market is going to do well.

That of course doesn’t mean that there won’t be any price corrections throughout the year, but I still expect the value of my ETFs to be higher at the end of 2021.

To put that into numbers, I’m expecting around 10% returns for my ETF, the Vanguard FTSE All-World in 2021.

As far as my investments in P2P lending are concerned, I’m happy with the portfolio of platforms I have currently. I think the sector will do a lot better once the world returns to normal, hopefully by Mid 2021.

I’m expecting yearly returns of around 11% from crowdlending and I also hope that my investments here will provide a bit of stability in case we do see a correction on the stock market.

Let’s get to the last one, which is definitely the riskiest of the 3 investments.

Even though their prices exploded over the past few weeks, when looking at previous cycles, I do believe there is a good chance that the value of Bitcoin and Ethereum could go a lot higher until the end of 2021, especially in the current environment of limitless money printing.

So my prediction for this more speculative part of my portfolio is that it will outperform everything else and potentially even double until the end of 2021, with a lot of volatility and sharp crashes in between.

I could very well be wrong though and it could go into the opposite direction, which is why I’m already taking out a chunk of my investment. I would only invest money that you can afford to lose in this highly volatile asset class!

There you have it!

If you found this useful, you’d like to support me and have a closer look into any of the investments I mentioned, you can find a list of all my investment accounts here.

Alright, so what do you guys think about my top 3 investments and my predictions for 2021? How is your own portfolio allocated for 2021?

Let’s have a discussion in the comments!

My Top 3 Investments For 2021 – The Video

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Important Resources

  • My Investor Toolkit – A list containing all of my current investments in P2P Lending, the brokerage accounts I use to buy ETFs, my speculative investments in digital currencies and my free bank accounts. For those that are interested, I also added the tools I use for blogging and YouTube.
  • P2P Bonus Offers – A collection of all the best, currently available bonus and cashback offers in the P2P Lending space. Regularly updated.


Disclaimer: Investing involves risks of losses. You should always do your own research before investing into anything. Also, some of the links are affiliate links, which help support me, the website & YouTube channel. I only link to services I use myself, none of them are sponsored.

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7 Comments

  1. Hi Angelo,

    Nice post, sad to see the p2p losses (I’ve been hit by Grupeer) but pretty sure Bitcoint/Ethereum covered all the p2p losses. I had half of my cryptos in XRP… so didn’t go too well for me, however ETH and BTC covered those losses, but now I’m gradually cashing out to think about what’s next (either crypto crash or regular market crash).

    Regarding p2p lending for 2021… I’m quite skeptical to be honest. I’ve noticed some more or less concerning things in the platforms I’m using, for example:

    – Mintos, increased delays and almost no loans of rate 7+, so increasing cash dragging the last 2 months.
    – Finbee, also cash dragging for 2 months now, not enough loans. Plus the have started an initiate of 0% loans for local business which sounds nice, but in practice I don’t thing is a good idea.
    – Peerberry, some dragging as well, although not as bad as the previous 2.

    I’ve have stop reinvesting in Mintos for the time being, since is the one I’m worried the most.

    1. Hi Juan,
      thank you! Yeah, they more than covered the losses, which was unexpected. I’m glad to hear that your BTC/ETH made up for what happened with XRP. Somehow, I never trusted XRP, but I can understand why people speculated on its price, especially when looking at the last bull run in 2017/2018.
      I understand your skepticism regarding P2P lending. The sad truth is, the lockdowns and restrictions are dragging on way too long, making it a lot harder for both lenders & borrowers. So the sooner that ends and we return back to normal, the better.

      There’s nothing wrong with waiting a few months and observing the Mintos developments from the sidelines, if that is what you feel most comfortable with!

  2. Nice summary Angelo. Thanks.

    I agree with Juan concerning P2P and Mintos in particular.
    I have been withdrawing money from Mintos for more than six months and it is a very slow process, with a considerable amount waiting to be recovered (hopefully).

    With a lower risk threshold than you, Angelo, I have decided I will no longer use P2P and now use only “traditional” investments, such as EFTs, sound funds balanced by government bonds and interest bearing accounts (low interest unfortunately) – the latter while waiting to buy property.

    1. Thank you Colin!
      Yeah, the recovery process is sadly taking longer, probably also because most countries are still in crisis mode.

      Nothing wrong with that decision, I hope you find the perfect property to buy! Maybe you get lucky and the real-estate prices drop in the area you’re searching in.

      I hope you’ll stick around nonetheless, Colin! 🙂

  3. Hi Angelo,

    Nice post, thank for all the detailed explanations. My bet for the next year is still on the stock market and ETFs (where I have most of my money invested). I am not so convinced by P2P lending, maybe because I’ve started in this tumultuous year and the experience with Mintos was not great (I have 25% of my capital in recovery), but I am willing to try another P2P platform in the next months (any suggestions?). Regarding cryptocurrencies, I don’t find them so valuable and bring to much volatility for my taste. Maybe later, when I will have more money to invest. Unfortunately I won’t have too much money to invest in the next months, as we are in the process of buying a house and 90% of the savings are for this purpose, until the deal is done.