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Post by nardge on Feb 13, 2019 22:02:11 GMT
Quick Query -
When I first invested in P2P, large sums were invested, and autobid 'parcels' were equally large as a result...
Funding Circle 'Balanced' has defaulted a single loan part (£49.60), and Zopa 'Plus' several (£97.50 in total).
I believe that if I'd drip-fed the initial funds, the 'parcels' would have been smaller, and consequently,
the above default losses much smaller too? Is my thinking right?
Therefore, where no charge to sell loans is incurred (Funding Circle) and so as to create smaller 'parcels',
it'd be a good idea to sell all FC loans, reinvest the sum again in FC by dripfeed (turning autobid on and off),
thus creating tiny 'parcels', and only tiny losses as a result? Is this correct?
I know neither of the above P2P have a safeguard, though that hasn't been to my great detriment as yet.
With Kind regards
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blender
Member of DD Central
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Post by blender on Feb 13, 2019 22:09:58 GMT
You can drip feed it to get smaller loan parts, but not by turning on and off because it buys 0.5% of your total account value. You have to feed the available funds in batches - but this only reduces the average size of loan parts, not the maximum. You can get a better diversity that way, but may just get more defaults and the same end result. You can't make a silk purse out of a sow's ear (other sayings are available).
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Post by nardge on Feb 13, 2019 22:18:43 GMT
Blender - Thanks for taking the time to answer. In short, from what you say, taking the action mentioned is unlikely to make any ultimate difference to total end losses
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Post by Proptechfish on Feb 13, 2019 22:24:14 GMT
I have always opted to drip feed on most platforms, FC especially and I have not experienced the catastrophic outcomes others seem to have. I've had 2 problem loan parts in two years, one ran 34 days late but is now back on track. The other, strangely IMO, had a full downgrade (lost any letter ranking) after a repayment warning from the borrower, but the borrower made the repayments on time anyway. My annualised ROI is 8.73% (calculated manually). My sell now ROI would be about 7.6%. Considering you can't sell newly invested funds in the first month that's not bad.
The only thing I can think of that explains the differences in experiences comes down to volume/strategy. Not to say you would replicate my experiences, I think there is still an element of luck involved.
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Post by nardge on Feb 13, 2019 22:38:34 GMT
Proptechfish - If I've understood you correctly, you feel there might be some mileage in me taking the above course of action...
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Post by Proptechfish on Feb 13, 2019 22:42:21 GMT
Proptechfish - If I've understood you correctly, you feel there might be some mileage in me taking the above course of action... For me it's worked out. It might be worth a try but there's no guarantees in the murky world of black box investing. If you're going to try it I would start a fresh account, otherwise your existing bad debts will just distort your returns going forward.
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Post by nardge on Feb 14, 2019 12:32:15 GMT
Proptechfish -
So, I should start a second FC account, invest in there by way of drip-feed all of my disinvested funds from my 'current' FC account.
Keep the 'current' FC open until I've retrieved as much of the bad debt as possible from it, disinvest that too, and move it across to the second FC account, then bringing closure to the 'current' one?
With Kind Regards
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blender
Member of DD Central
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Post by blender on Feb 14, 2019 21:01:01 GMT
I am pleased that proptechfish has done well. I did well in the past but not with 2018 loans, and I guess 2019 are no better. Does your portfolio contain recent loans or old ones, predominantly, proptechfish? Loans after 50,000 do not seem so good, just to give a very rough division.
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Post by Proptechfish on Feb 14, 2019 22:36:16 GMT
I am pleased that proptechfish has done well. I did well in the past but not with 2018 loans, and I guess 2019 are no better. Does your portfolio contain recent loans or old ones, predominantly, proptechfish? Loans after 50,000 do not seem so good, just to give a very rough division.
It's fairly balanced over the 2 years because I have deposited pretty consistently but going on a 30 month split (half way of a 5 year term) it's about 60.00% over 30 months remaining to 40.00% under 30 months remaining. To provide a bit more information my lowest loan part rate is 1.9% and highest is 23.9%. I did spot some posters blowing a gasket over sub 2.00% rates but personally I think the odd low rate loan is irrelevant in a diversified black box including 23.00% loans.
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xtab
Posts: 41 
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Post by xtab on Feb 20, 2019 14:08:01 GMT
I sold out all the old FC loans I could, left things for a few months and then started to dripfeed back in after they changed to the autoinvest model. So far not doing so bad.
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