aju
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Post by aju on Dec 6, 2018 0:03:51 GMT
Ok so myself and Mrs Aju kept getting prompted to have a look at Ratesetter over the last few months and being a full time Zopa lemming I decided to give it a whirl. Mind you there was a £100 incentive for Mrs Aju and then she recommended me and got another £50 and I will get £100. Well that's the theory although her £50 has already arrived so thats a start.
We immediately withdrew her £50 in rolling and have planted it into the 5yr plan and having watched the Market full view for a couple of days I poked her £50 on at 6.3 a few days ago but its not yet lent out. I figure at some point its probably going to give us a hit but it was guessing a little.
So watching it over a further few days it came to me in a flash I'll add another £40 and lend it out in £10 bits at 6.1, 6.2, 6.3 and 6.4 - I did this yesterday as a start so no bites as yet but then all the while I have been watching it over the last day or so its got to. 6.0 at best but then only a few lenders as far as I can deduce.
I would point out that when we lent our £1000 I managed to get 5.9 and 6.0 for some of Mrs Aju on market at the time - reading other threads I realise we were lucky I think. When I lent mine I did not realise that lending using a debit card would result in it going straight to market but again the rate was not that bad for 5yr in this case it was 5.9.
I've set return rate at 6.5 on the 5yr so that i can watch things and so here comes the real question to those who are a bit more seasoned.
Am I taking the right approach or am I essentially just wasting my time?.
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Post by Ace on Dec 6, 2018 1:37:56 GMT
Well, I don't know if it's the"right" approach, but it's pretty similar to mine. The only difference is that if I can't get 6.2% or higher then I move repayments to LW. Earlier in the year ,think it was around may, I gave up on RS as I struggled to get 5.5%. I set up auto withdraws on all repayments. Then, around September, rates started to rise. It became easy to get 6.5% and above. However, the rates have recently dropped again, so most repayments are ending up in LW again. RS is feeling a bit too fiddly to get the best rates for me. I've already halved my original investment. I'm happy to let repayments get relent if the rates rise again, but my current strategy is more likely to result in an eventual account closure. I'm not sure LW would be any good for you though aju , there probably isn't enough detailed data there for you to analyse 😉
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Post by GSV3MIaC on Dec 6, 2018 8:45:59 GMT
In the old days you could set a "lend at x.x%, or market rate if higher" and ignore it. Not fiddly at all. Then they 'improved' it. 8<.
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spiral
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Post by spiral on Dec 6, 2018 9:26:05 GMT
Playing the RS guessing game is quite an acquired art. Also how you play it depends on how fully invested you are.
If you are fully invested but only looking to recycle repayments, I would pick a rate 0.3-0.5 above what you are willing to accept but monitor the market and be prepared to change that rate to make a match when the rate hits what you want.
If you have a lump sum that you're looking to invest, I would drip feed that in at rates at around the rate you are looking for but be prepared to put mini lump sums in should the rate exceed your expectations.
Remembering your posts from the Zopa thread, I think you always looked to diversify your loans into as many small microloans as possible. That is totally unnecessary with RS because their plan in case of financial meltdown would result in all lenders taking a hit, not just those that hold the problem loans.
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star dust
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Post by star dust on Dec 6, 2018 10:19:09 GMT
Remembering your posts from the Zopa thread, I think you always looked to diversify your loans into as many small microloans as possible. That is totally unnecessary with RS because their plan in case of financial meltdown would result in all lenders taking a hit, not just those that hold the problem loans.
Actually as well as being unnecessary, it could also turn into a disadvantage should you ever want to sell out. You cannot sell any loans at less than £10, which a £10 loan will become as soon as the first repayment is made. So if you lent everything on the 5 year market in £10 chunks for example, you'd be unable to sell anything a month after you stopped lending.
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Post by propman on Dec 6, 2018 10:38:53 GMT
asme approach as Zopa in old days, but be aware that the lending may go to a single borrower so no lending at all (subject to the frequent apparent market hicoughs) until all money at the lower rate is gone. Each weekday there is the MR money to lend and most new money attarcted at that or below rate. Unmless rates are very good probably worth waiting until that clears at the risk of not lending. How much it goes above and how often depends on the market. Don't play the rolling (due to aut relending now). Monthly is erratic as a significant amount of the lending here is large property loans that often suck in £1m or so. As a result frequent peaks way above market. Worth checking as sometimes it takes a few hours before these are satisfied and so you can pitch in at the higher rate with good expectation of lending (note that some people will be attracted at the higher lend it now rate, so you need to set these offers with somewhat less than the amount offerred to borrowers offering ahead of you). This is a bit complicated now as RS have become more cunning if more than one large offer comes in and will only put one on the market at a time, so may be worth a put where lending above that shown is required. 5 year has a larger amount daily but is more even. In any day it rarely rises that much above the previous day's high. However worth holding out for longer as average cash drag on longer loans less.
All that said, as stated elsewhere this is a slow time of year, so might be worth accepting modest rates now and only taking punts in Late January. Generally I have an array of offers to match over expected / hoped for rates of the following few weeks as it is an inexact science.
Re amount per loan, I prefer not to have too much in any one loan as early repayments are common and often lead to a glut on the market (especially the larger 1 year loans). So I think it is worth spreading as widely as possible without compromising unduly on current rates. This is consistent with small punts to catch market fluctuations.
Re LW, have a small amount in, but please note that the required disclaimer about the past not being a guide to the future is more relevant with PFs. RS admit that the PF will be insufficient to cover a moderate recession. I expect that at a minimum within the next 3 years I will lose at least 6 months interest with a significant chance of losing several % of my invested capital. RS was not here fopr the last recession and has become less conservative on PF funding. Current default estimates look optimistic to me and probably dependent on a thriving market for under performing loans. LW seem to be even more optimistic on default recoveries hence my caution. Essentially (at risk of sounding like a bad record), PF P2Ps are very like catastrophy bonds that got Aberdeen and other companies in trouble before. THey exasperate the essential feature of non-FSCS bond investment (picking up pennies infront of a steam roller). gebnerallyu will receive the promised amount, but in a downturn expect significant losses. There is an assumption that PF can always be topped up from future contributions (something happening on both LW & RS I believe even now), if losses crystallise expect lending to cease suddenly and the existing PF to have to cover all current loans!
Best of luck.
PM
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aju
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Post by aju on Dec 6, 2018 11:13:03 GMT
In the old days you could set a "lend at x.x%, or market rate if higher" and ignore it. Not fiddly at all. Then they 'improved' it. 8<. Yeah the so called improvements over at Zopa have got me started on more than one occasion and this one reminds me of the real old days in Zopa when a number of us were pushing for the ability to do this type of thing but Zopa always argued, probably quite rightly, that this might not be open to everyone just using this option.
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aju
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Post by aju on Dec 6, 2018 11:29:15 GMT
Remembering your posts from the Zopa thread, I think you always looked to diversify your loans into as many small microloans as possible. That is totally unnecessary with RS because their plan in case of financial meltdown would result in all lenders taking a hit, not just those that hold the problem loans.
Actually as well as being unnecessary, it could also turn into a disadvantage should you ever want to sell out. You cannot sell any loans at less than £10, which a £10 loan will become as soon as the first repayment is made. So if you lent everything on the 5 year market in £10 chunks for example, you'd be unable to sell anything a month after you stopped lending. I am aware of the issues you both point out, especially the all for one one for all aspect of the PF on RS, but I was trying to find a simple methodology that might work for me where I could just get a feel for the rates spikes. The £10 loans lasting until the end are not an issue for me as I would not be removing money from RS other than returned money if I was not happy with the progress our investments make. I was using the 4 £10 levels along with the market rate viewer to see how the levels were progressing and what values get me a hit and when. The objective was really to get a feel for it and have different hit levels I could easily monitor offline. Having come in when the rates seemed on a downward and then suddenly, by accident, picking up MR values of 5.9% was lucky to say the least for both of us. If the Pf holds up okay, during the potential turbulent times ahead that have not been fully tested on RS as yet, then I will be looking at better returns than Zopa is giving us at the present times. The thing I always try keep in mind though is that none of this P2P stuff is guaranteed. All of my punting around may be fruitless as the overall RS graph of rates does seem to be downwards but the spikes in the graph may offer some opportunities so all your comments are really helping me here.
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aju
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Post by aju on Dec 6, 2018 11:42:05 GMT
asme approach as Zopa in old days, but be aware that the lending may go to a single borrower so no lending at all (subject to the frequent apparent market hicoughs) until all money at the lower rate is gone. Each weekday there is the MR money to lend and most new money attarcted at that or below rate. Unmless rates are very good probably worth waiting until that clears at the risk of not lending. How much it goes above and how often depends on the market. Don't play the rolling (due to aut relending now). Monthly is erratic as a significant amount of the lending here is large property loans that often suck in £1m or so. As a result frequent peaks way above market. Worth checking as sometimes it takes a few hours before these are satisfied and so you can pitch in at the higher rate with good expectation of lending (note that some people will be attracted at the higher lend it now rate, so you need to set these offers with somewhat less than the amount offerred to borrowers offering ahead of you). This is a bit complicated now as RS have become more cunning if more than one large offer comes in and will only put one on the market at a time, so may be worth a put where lending above that shown is required. 5 year has a larger amount daily but is more even. In any day it rarely rises that much above the previous day's high. However worth holding out for longer as average cash drag on longer loans less.
All that said, as stated elsewhere this is a slow time of year, so might be worth accepting modest rates now and only taking punts in Late January. Generally I have an array of offers to match over expected / hoped for rates of the following few weeks as it is an inexact science.
Re amount per loan, I prefer not to have too much in any one loan as early repayments are common and often lead to a glut on the market (especially the larger 1 year loans). So I think it is worth spreading as widely as possible without compromising unduly on current rates. This is consistent with small punts to catch market fluctuations.
Re LW, have a small amount in, but please note that the required disclaimer about the past not being a guide to the future is more relevant with PFs. RS admit that the PF will be insufficient to cover a moderate recession. I expect that at a minimum within the next 3 years I will lose at least 6 months interest with a significant chance of losing several % of my invested capital. RS was not here fopr the last recession and has become less conservative on PF funding. Current default estimates look optimistic to me and probably dependent on a thriving market for under performing loans. LW seem to be even more optimistic on default recoveries hence my caution. Essentially (at risk of sounding like a bad record), PF P2Ps are very like catastrophy bonds that got Aberdeen and other companies in trouble before. THey exasperate the essential feature of non-FSCS bond investment (picking up pennies infront of a steam roller). gebnerallyu will receive the promised amount, but in a downturn expect significant losses. There is an assumption that PF can always be topped up from future contributions (something happening on both LW & RS I believe even now), if losses crystallise expect lending to cease suddenly and the existing PF to have to cover all current loans!
Best of luck.
PM Thanks for that, I spent some time looking at the 3 options. Rolling I didn't like at all and as a result when Mrs Aju got her £50 bonus we removed it immediately and put it in her 5y option. To be honest 5 year was the only thing we are looking at as we have enough in lower value markets in Zopa at the moment. All my initial £1000 got lent out at once as I used debit card and made a schoolboy on it lending out immediately, rather fortunately still at 5.9%. With Mrs Aju we did a bank transfer and it was more measured and we split it up a little for the reasons you point out when borrowers check out early. A few people have mentioned LW but I'm a long time Zoparite and would rather work with one new one at a time. That said I'm sure I'm going to get bored with RS being more hands off than Zopa in many ways. (I mean in terms of data that one can use to better understand their lending positions. Of course Zopa does not offer the best tools one has to create them oneself.)
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macq
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Post by macq on Dec 6, 2018 13:07:53 GMT
Don't have much in RS but coming at it from a different angle if people are concerned about the next year or Two for the very small difference in rates would 1 year not be a better bet then 5 year? As last night i think it was 5.2% v 5.6% and yes you may lose out when renewing but who knows you could even gain
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robski
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Post by robski on Dec 6, 2018 13:16:04 GMT
My approach is as follows. I only lend on 5 year now (although have 3 year and a tiny bit in one year) I will allow my money to go around a week and my minimum target portfolio rate is 6% so if its currently over 6% then I will accept a few .x% below, but not by much. I dont fixate on every single contract %, and as said as loans can repay quickly I dont hold out for ages for an extra 0.1% as it could repay any time. As far as splitting up, I do this a bit. My target is £100 loans ideally, because by the time it gets to £10 (so cannot sell) there will already have been a really good chance of repayment (real or provision fund), if not then its got months left anyway. Not that I plan to withdraw, but its always good to have the option right? Many days i have to reinvest over £100, so if its just over I will lump as one, if its closer to £200 (or more) I split up. I then place in a number of rates and shift them around as needed. Its a little work, but its a bit of fun I do this specifically as when I first started I would often drop £1k in a loan if the rates were good. But I found they could often repay, and then you may have £1k sitting waiting and rates are supressed. There is no benefit as far as provision fund, but it can keep the churn of unexpected capital repayment at a more steady level. It would also be beneficial if you needed some extra to withdraw for some reason, some weeks i can get extra every day now as I get more and more loans live. means as long as i could hold out for a few weeks i could get quite a lot of extra cash without paying the penalty fee. As far as the rate, my feel is it creeps up during the week, and weekends can be most volatile out of the whole week, rates can go high. or go low if there is few loans going out and lots of funds available. I don't fixate on the odd 0.1% or so, because unless its a high amount it makes little diff on the actual repayments (dont forget it assumes you reinvest) so I just deal with it as it happens. It hasnt heppened yet, but it rates were to be steadily below my lend rates I would just pull it, and wait it out until they went back up.
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Post by erniec on Dec 6, 2018 14:05:00 GMT
I have some money in both 3 and 5 year products but am withdrawing any repayment and focussing on the 1 year product. I control when I enter the market, using debit card to add money quickly, and ensure that I get between 5-5.5%, if possible. I like the fact that you have a known rate for a fixed period and have not seen many early repayments. Re-investment is turned off on all products. I have an automated withdrawal set monthly from repayments on 3 and 5 year products. I currently consider RS to be my preferred product over Zopa.
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Post by erniec on Dec 6, 2018 14:24:21 GMT
This is exactly the situation where I would jump in:
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coogaruk
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Post by coogaruk on Dec 6, 2018 16:24:49 GMT
This is probably not much help to a newbie RS'er but they are the last of the 'Big 3' (along with FC & Z) that I have yet to give up on and start winding down my investment with.
I have come close on a number of occasions though, as regular readers may already be aware!
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aju
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Post by aju on Dec 6, 2018 16:30:33 GMT
Don't have much in RS but coming at it from a different angle if people are concerned about the next year or Two for the very small difference in rates would 1 year not be a better bet then 5 year? As last night i think it was 5.2% v 5.6% and yes you may lose out when renewing but who knows you could even gain Hmmm! hadn't looked at it like that, although to be fair I've already lent out. I'm not sure that I'm overly uncomfortable with a 5y longer term view but its very different on here than separate loans of Zopa and RS's PF is shared all or nothing thing. I have been confused by their splitting of the interest cover and the Capital cover and need to have a few more reads of that section to fully get to grips with it. That said on the 5 year i'd be hoping to get better than 5.6% at the moment but time will tell...
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