What is micro investing in 2024: All you need to know to start today (2024)

Micro loan investing, also known as fractional loan investing, involves investing in small loans through online platforms. For investors, micro loan investing offers an opportunity to diversify their investment portfolios beyond traditional asset classes such as stocks and bonds. By investing in a portfolio of micro loans, investors can spread their risk across multiple borrowers and loan types, reducing the impact of any individual loan default. The interest rates that investors receive on investments in micro loans are typically higher than interest on traditional savings accounts or bonds, offering the potential for more returns.

Mintos offers investments in thousands of loans from around the world, starting from just €50.

Ready to expand your portfolio? Explore diverse investment opportunities with Mintos today and discover the potential of alternative investments.

In recent years, micro real estate investing has gained traction and is also known as fractional ownership. Fractional ownership means investors own a small portion of the property alongside other investors. This approach reduces the barrier to entry, as investors can contribute small amounts of money to gain exposure to real estate assets that would typically require a much larger investment.

By investing in fractional ownership of multiple properties, investors can diversify their real estate portfolios and spread risk across different types of properties, locations, and investment strategies. This diversification helps mitigate the risk associated with investing in individual properties and can enhance overall portfolio resilience.

Investing in income-generating properties through micro real estate platforms can provide investors with passive income in the form of rental payments. Even with small investments, investors can earn regular income distributions from rental properties, enhancing cash flow and potentially supplementing other sources of income.

If you’re interested to learn more, check out our article about passive real estate investing.

Micro investing apps are mobile applications designed to facilitate small-scale investments in financial markets. These apps typically offer user-friendly interfaces and features tailored to help individuals start investing with minimal funds.

Some apps offer a “round-up” feature, which automatically invests spare change from everyday purchases into diversified portfolios. Users can also set up recurring investments and access educational content. Other apps offer a range of investment options curated based on users’ interests, values, and financial goals. Some robo-advisor apps create personalized investment portfolios based on users’ risk tolerance, goals, and time horizon and have automatic rebalancing, tax-efficient investing, and financial planning tools.

Micro cap investing involves purchasing shares of companies with small market capitalizations, typically ranging from €50 million to €300 million. These companies are often smaller, less established, and more volatile compared to larger companies listed on major stock exchanges. Despite the higher risk associated with micro cap stocks, they also offer the potential for significant returns for investors willing to tolerate the volatility.

Micro cap stocks are typically in the early stages of development, with the potential for rapid growth and expansion. Due to their small size and limited liquidity, micro cap stocks can experience greater price fluctuations and volatility compared to larger stocks. Because micro cap companies may have limited publicly available information, it can be challenging for investors to conduct thorough research and due diligence.

Micro investing, like any investment strategy, comes with its own set of advantages and disadvantages.

Here’s a few of the advantages:

• Accessibility: Micro investing makes investing accessible to a broader range of individuals who may not have large sums of money to invest. It allows people to start investing with small amounts of money, sometimes as little as a few euros.
• Affordability: With micro investing, investors can purchase fractional shares of assets, making it affordable to invest in high-priced assets that would otherwise be out of reach.
• Diversification: Micro investing enables investors to diversify their portfolios by spreading their investments across multiple assets. This diversification helps reduce risk by not putting all eggs in one basket.
• Automation: Many micro investing platforms offer automated features like recurring investments or round-up purchases, making it easy for investors to build their portfolios over time without having to actively manage their investments.
• Educational tools: Micro investing platforms often provide educational resources and tools to help investors learn about investing, financial planning, and portfolio management. This can empower individuals to make informed investment decisions and improve their financial literacy.

Here’s a few of the disadvantages:

• Fees: While many micro investing platforms offer low or no fees, fees can still eat into investment returns over time, especially for small portfolios. It’s essential for investors to understand the fee structure of the platform they’re using and how it may impact their overall returns.
• Market volatility: Investing small amounts of money may expose investors to higher levels of volatility, particularly in times of market turbulence.
• Risk of loss: Like all investments, micro investing carries inherent risks, including the risk of losing money. While diversification can help mitigate risk to some extent, there’s always the possibility of investment losses.

Mintos offers a diversified selection of assets. Explore a carefully curated range of Fractional Bonds, ETFs, and Loans, tailored for various risk tolerances and investment levels. Mintos simplifies the path to alternative assets, making it easier for you to diversify your portfolio.

Are you ready to broaden your investment horizons? Unlock the potential of alternative investments, starting from just €50.