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Post by befuddled on Aug 14, 2019 10:58:40 GMT
I'm pulling out of P2P as fast as I can without incurring fees...., I was invested with much more than 10% of total savings, and am admitting to myself I don't fully understand the concept
and would feel real pain if the worst happened.
It seems P2P borrowers are borrowers rejected by banks. Seems it can only be a race to the bottom for the lowest quality of borrowers...?
Also concerned by reading articles about the risk, (ie on this forum, reducing PF coverage etc), and experiencing first hand the failure of FC, the uncertainties of Brexit, possible recession and the various knock on effects...
I am asking myself what is the real benefit of P2P over saying buying shares in a bank.
ie if buying shares in HSBC was described as
6.4% dividend
Total liquidity (almost instant access)
"platform" tried and tested over 100 years...
Compared to
3-6 % interest
Liquidity far from guaranteed
New untested, unstable (constantly changing) platform
I am struggling to sell P2P in general and RS specifically to myself....
OK, share dividends are not guaranteed, and capital is at risk (though long term should increase) - but the overall risk must be less, and the maximum downside massively less.
Maybe I'm having a negative morning - but can't help feeling I was swept up in a savings fad....
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Post by Deleted on Aug 14, 2019 11:35:29 GMT
Well 10% does sound brave to me.
I see it this way, P2P and shares the capital is at risk In P2P the maximum gain is the percentage In shares the maximum gain is way-high. If you want easy use the BSociety
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Post by gravitykillz on Aug 14, 2019 11:42:49 GMT
Everytime I have invested in shares I have lost money. Latest purchase was metro bank at 3.50 per share currently trading at 3.00. But I have always made money on p2p.
Maybe I am unlucky but good luck to you if you know what shares to buy. (Maybe try premium bonds?)
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hazellend
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Post by hazellend on Aug 14, 2019 12:51:16 GMT
Everytime I have invested in shares I have lost money. Latest purchase was metro bank at 3.50 per share currently trading at 3.00. But I have always made money on p2p. Maybe I am unlucky but good luck to you if you know what shares to buy. (Maybe try premium bonds?) Individual investors should buy cheap index trackers rather than select shares. You then sit and wait for one or two decades. It works
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benaj
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Post by benaj on Aug 14, 2019 13:22:01 GMT
So why P2P (in ideal world)?
1. Diversification
2. Better return than other FSCS saving accounts
3. Less volatility in the long term
4. Regular monthly income
5. level of risk/return can be controlled
why not P2P?
1. capital at risk
2. can be time consuming
3. complicated investment nature, the mechanics of each platform is almost unique
4. transparency issue
5. variation in liquidity
is it better than buy bank shares such as HSBC? it really depends on individual circumstances.
1. If someone bought the HSBC shares in year 2000 and holds, return would hardly beat FSCS saving account
2. If someone is very good at trading, the person could have made lots of profit due to nature of volatility.
3. IF someone bought the HSBC shares in 1995 and holds, he is probably making decent return.
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Post by gravitykillz on Aug 14, 2019 13:51:42 GMT
So why P2P (in ideal world)? 1. Diversification 2. Better return than other FSCS saving accounts 3. Less volatility in the long term 4. Regular monthly income 5. level of risk/return can be controlled why not P2P? 1. capital at risk 2. can be time consuming 3. complicated investment nature, the mechanics of each platform is almost unique 4. transparency issue 5. variation in liquidity is it better than buy bank shares such as HSBC? it really depends on individual circumstances. 1. If someone bought the HSBC shares in year 2000 and holds, return would hardly beat FSCS saving account 2. If someone is very good at trading, the person could have made lots of profit due to nature of volatility. 3. IF someone bought the HSBC shares in 1995 and holds, he is probably making decent return. During the financial crisis hsbc was trading at 3.50 per share and Barclays was around 50p per share anyone who purchased then would have done well. But why buy banking shares other sectors can do just as well. Anyways I am staying away from equities now. Especially considering brexit is just around the corner.
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Post by propman on Aug 14, 2019 13:54:07 GMT
So why P2P (in ideal world)? 1. Diversification 2. Better return than other FSCS saving accounts 3. Less volatility in the long term 4. Regular monthly income 5. level of risk/return can be controlled why not P2P? 1. capital at risk 2. can be time consuming 3. complicated investment nature, the mechanics of each platform is almost unique 4. transparency issue 5. variation in liquidity is it better than buy bank shares such as HSBC? it really depends on individual circumstances. 1. If someone bought the HSBC shares in year 2000 and holds, return would hardly beat FSCS saving account 2. If someone is very good at trading, the person could have made lots of profit due to nature of volatility. 3. IF someone bought the HSBC shares in 1995 and holds, he is probably making decent return. Generally agree with the above except the highlighted word above. I assume this was a mistake and should have been omitted or clarified to refer to the comparators. Personally I don't think any money in P2P shyould be being considered for savings atleast for more than a year or so as a short term safe harbour. Comparison should be with other investment classes!
Personally I think that the capital likely to be at risk in shares is much greater than some P2P. This is particularly the case if investing in one company. Yes there is the possibility of fraud and all money is lost, but that could be the case with most shares (actually held by some other party on your behalf), although that is said without knowing how certain FSCS protection could be obtained against this. I think for well established platforms the risk of this is acceptable (below the risk of freefall in sterling in my opinion). Outside of this it depends on the platform and number and type of borrowers.
The biggest additional risk in my mind is liquidity. It is a significant risk on most platforms that repayments might be significantly reduced for many months and all loan sales stopped permanently. But in the end I believe many are extremely unlikely to lose more than 10% of capital absent a disaster that would have an impact to most investment options.
I also have major issues in the lack of Transparency on many platforms. For me this is the major disadvantage of RS with a history of making changes that are announced after the event. I am amazed taht this was not outlawed by the FCA review, but as I didn't respond to the consultation partly at fault for this. Normally investments are accompanied by detailed disclosures which the issuer is responsible for if they were not appropriate.
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Post by gravitykillz on Aug 14, 2019 13:56:20 GMT
I am terrible at picking shares. But I think Santander(bnc) represents better value than hsbc. Though they operate in different markets. But i would wait until china sends the pla into hk and things go bad then I would buy hsbc not now. And maybe some bp as well!
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r00lish67
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Post by r00lish67 on Aug 14, 2019 14:06:22 GMT
During the financial crisis hsbc was trading at 3.50 per share and Barclays was around 50p per share anyone who purchased then would have done well. But why buy banking shares other sectors can do just as well. Anyways I am staying away from equities now. Especially considering brexit is just around the corner. Except that if you really believe we're going for Brexit of the no-deal variety (which is the only Brexit that could be reasonably termed 'around the corner'), then Sterling's fall would be your gain in equities in £ nominal terms at least. You're really much better off all round following the ever-patient hazellend 's advice. You don't know more than the market, you're not quicker than the market, just give up. Buy index trackers and wait.
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benaj
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Post by benaj on Aug 14, 2019 14:09:41 GMT
During the financial crisis hsbc was trading at 3.50 per share and Barclays was around 50p per share anyone who purchased then would have done well. But why buy banking shares other sectors can do just as well. Anyways I am staying away from equities now. Especially considering brexit is just around the corner. Thank goodness the UK government didn't make a loss on Lloyds and got out in 2017. www.euronews.com/2017/05/17/lloyds-bank-uk-government-sells-off-final-shares-but-did-it-make-a-profitIt would have been bad news if shares weren't sold, current price of Lloyds is just 48p
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Post by Deleted on Aug 14, 2019 14:50:57 GMT
Knowing the latent IT crisis sitting in most UK banks I would not consider investing in this sector at all. This includes Santander whose back office IT and credit control is famously poor. Still HSBC is also asleep at the wheel so.....
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nyneil
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Post by nyneil on Aug 14, 2019 18:50:04 GMT
Knowing the latent IT crisis sitting in most UK banks I would not consider investing in this sector at all. This includes Santander whose back office IT and credit control is famously poor. Still HSBC is also asleep at the wheel so..... HSBC is very proactive with their IT and, since their massive fine a few years ago, they are very hot on AML. I'm not saying that makes them a buy...
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Post by Harland Kearney on Aug 14, 2019 19:16:00 GMT
If a no-deal brexit happened, UK shares would not benefit from the sharp poundfall, due to sentiment (It's a gamble at best). Periods following the inital refereundum result were not favourble even with the sharp drop, up until traders picked it up. U.S trade war seems to have a heavy impact on all markets currently, this will be just as large a driving factor for the UK market as brexit it. Equities are best bought via fund or indexes for independant investors, who don't have expert knoledge/time in the field. We simply do not get the top edge information alot of traders do over on W.S and the likes. A good knoledgebase for stock market trading/related activites: moneyforums.citywire.co.uk/Not sure if I'm allowed to link, but its a good source with alot of people actively discussing like we have here. |
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Post by Deleted on Aug 15, 2019 8:41:25 GMT
A friend of mine works as a banking consultant and was recently asked to review IT security/competence at a certain bank (which included using the system to buy a share without any record being made), amazingly the report was so critical that the board dared not do anything, I'll let you work out which company it was.
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Post by gravitykillz on Aug 15, 2019 8:45:23 GMT
A friend of mine works as a banking consultant and was recently asked to review IT security/competence at a certain bank (which included using the system to buy a share without any record being made), amazingly the report was so critical that the board dared not do anything, I'll let you work out which company it was. I love this forum 
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