Stonk
Stonking
Posts: 735 
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Post by Stonk on Apr 24, 2019 10:33:47 GMT
When FC moved to the black-box model in September 2017, projected returns were stated to be 7.5%. And, correct me if I'm wrong, that's the figure they IPO'ed with.
Now ( blog post) the projected return has been slashed (I think is an apt word) to "4.5% to 6.5%".
Now we all know that actually means 4.5%, so why didn't they just go for a more impressive sounding "4.5% to 21%", which is equally likely to be satisfied.
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benaj
Member of DD Central
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Post by benaj on Apr 24, 2019 10:45:51 GMT
I am more "conservative", expecting a lower return below 4.3%. If FC delivers more, I would be happy.
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ashtondav
Member of DD Central
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Post by ashtondav on Apr 24, 2019 18:11:25 GMT
Sadly the search for yield and the competitive loans market means lower returns are probable.
EVERYWHERE.
M&S announced 2.8% today for personal loans but every one knows borrowers lie and “buying a car” could well be “propping up my business”. 2.8% for an unsecured loan!!!! The whole world is going to hell in a handcart. Try the 12%ers - that’ll get you similar net returns.
i am keeping a sharp look at the unemployment rate and will jump all platforms if I see two months of that increasing.
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Stonk
Stonking
Posts: 735
Likes: 658
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Post by Stonk on Apr 24, 2019 18:39:38 GMT
I wonder whether the reduction in projected return is because of
(a) competition, meaning the blend of rates at which FC lends out is getting lower on average; (b) FC's lax lending criteria, exposing us to increasingly higher levels of defaults;
(c) increasing defaults across the board, regardless of whom they lend to.
I suspect there's a lot of (c) in the mix, because my portfolio entirely from before September 2017 is sustaining far too much damage to meet (or even get close to) its original projections.
I'm not relishing finding out what RateSetter's long-awaited PF figures are! Due any day soon, unless they find another reason not to tell us ...
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