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Post by Financial Thing on Nov 29, 2015 2:52:36 GMT
Your opinion is fair, but only considers peer to peer. Yes it does because we are on a p2p forum discussing mainly p2p. You can sell sports tickets and make 60% profit annually or trade stock options and make 1000%.
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Post by brokenbiscuits on Nov 29, 2015 9:49:06 GMT
Your opinion is fair, but only considers peer to peer. Yes it does because we are on a p2p forum discussing mainly p2p. You can sell sports tickets and make 60% profit annually or trade stock options and make 1000%. Good luck with that as a significant part of your investments. You forgot to say that you can buy a lottery ticket and...
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am
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Post by am on Nov 29, 2015 13:42:41 GMT
I am mostly an idle observer of the comments on this forum but I read quite regularly of the better opportunities at a similar risk level that are 'elsewhere'. I wish I could find some. At present RS seems the only game in town for investing sensible chunks of cash at 6% with an acceptable risk. Would anyone like to share with me some of these better offers which I seem to be unable to find. I do not mean the contrived regular saver accounts from the high street where you can only put a few thousand. Pointers gratefully received. I asked a similar question a few month ago Established platforms paying high rates. I am not recommending any of these, just relaying what I've heard. Some people have managed to put much more than a few thousand into high street banks, by having one for themselves, one for a spouse and one more in joint names. One of the banks used to allow up to four accounts in each name, providing the standing orders/direct debit terms and conditions were met for each. Many people feel more comfortable with secured lending, rather than the unsecured lending at ratesetter. Mostly these days it seems to be bridging loans paying (us) 9%-12%. Popular P2P platforms doing this are Assetz Capital, Thin Cats and from now on Saving Stream. I have done some of this and have had losses, but my total return has probably been higher than RS, but probably not enough to justify the extra effort. Some people are doing bridging loans directly via a private bank or a broker - thought the minimum investment seems to be about £50k and all of that is in one deal, so much more needed if you are going to diversify. P2PGI and VSL are listed investment trusts. They are buying portfolios of P2P loans, targeting a yield higher than RS. These can be bought inside SIPP or ISA which makes them attractive to some. There are lots of non listed funds engaged in the bridging loan type lending, and some have had reasonable payout, but I think that the minimum investment might be £25k+. There are a lot of EIS and VCT wrapped schemes which promise much, but watch out for fees - I have seen schemes in which the manager takes fees about as large as the tax credit. Should I diversify further? is an active thread which discusses one VCT in particular that one forum member likes. There are bond funds with yields higher and lower than RS. The risks are probably higher and lower respectively, but there isn't enough track record to know (the risks of RS). These can often go in a SIPP or ISA. Some people like PIBs though lots got burned in 2007/2008. You will see significant price movements each day, and losses should base rates rise higher or faster than expected. If you tried to exit ratesetter early and rates had risen you would see significant losses too, they are just not as obvious. (With the listed funds you have a chance of gains as well as losses, something not possible on Ratesetter.) Hopefully others will add some more ideas. If P2PGI and VSL are worthy of consideration, then I would think that infrastructure funds like Greencore and Bluefields, which I think have similar risk profiles, would also be. The premium on Bluefields has unwound, and it's currently yielding over 6%.
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ribs
Probably not James Marshall
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Post by ribs on Nov 30, 2015 21:26:06 GMT
That is truly daft considering I have not matched in the 5 year for over a month now! Same here. I utterly love the "Ratesetter way", with Kev very active on this forum, and the pioneering of the provision fund for p2p lenders and so on... But let's be real here... We're here for the rates. I'm here for the long term and I'm still building wealth, so I only invest in 5 year markets, and anything less than 6% is simply unacceptable to me, given the (admittedly small, in my view) risk. I'm a lowish risk kinda guy, so 6% sits fine for me and my long term goals. Less than 6% does not. Especially when the high street can get close to the rates offered (and sometimes exceed them). We can talk about the 'whys', 'who' and 'what' is causing this all day, but the fact reminds: Whilst I'm a relative newbie; I started in November 2013 with Ratesetter, but I have never settled for less than 6%. Sometimes I had to wait for a week or whatever, but it always came through. Now I have unmatched money and low rates on offer and seemingly no improvement in sight. Obviously this is a short amount of time in the grand scheme of things, and maybe I should just chillax, but I'm pondering if it's time to move on. I can't help but wonder if the 'Your rate' part of the website has been a driving factor in this. And I'm sure the recent incentives have played a part as well, which is a crying shame as Ratesetter has actually hurt it's existing customers in pursuit of new ones.
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Post by dagoatla on Nov 30, 2015 21:44:00 GMT
I can't help but wonder if the 'Your rate' part of the website has been a driving factor in this. And I'm sure the recent incentives have played a part as well, which is a crying shame as Ratesetter has actually hurt it's existing customers in pursuit of new ones. I was thinking this too. I wonder if the money that existing customers are not investing due to the reduced rate is equal to or more than the new entrants who are enticed by £50 bonus are investing
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jlend
Member of DD Central
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Post by jlend on Dec 1, 2015 6:56:59 GMT
That is truly daft considering I have not matched in the 5 year for over a month now! Same here. I utterly love the "Ratesetter way", with Kev very active on this forum, and the pioneering of the provision fund for p2p lenders and so on... But let's be real here... We're here for the rates. I'm here for the long term and I'm still building wealth, so I only invest in 5 year markets, and anything less than 6% is simply unacceptable to me, given the (admittedly small, in my view) risk. I'm a lowish risk kinda guy, so 6% sits fine for me and my long term goals. Less than 6% does not. Especially when the high street can get close to the rates offered (and sometimes exceed them). We can talk about the 'whys', 'who' and 'what' is causing this all day, but the fact reminds: Whilst I'm a relative newbie; I started in November 2013 with Ratesetter, but I have never settled for less than 6%. Sometimes I had to wait for a week or whatever, but it always came through. Now I have unmatched money and low rates on offer and seemingly no improvement in sight. Obviously this is a short amount of time in the grand scheme of things, and maybe I should just chillax, but I'm pondering if it's time to move on. I can't help but wonder if the 'Your rate' part of the website has been a driving factor in this. And I'm sure the recent incentives have played a part as well, which is a crying shame as Ratesetter has actually hurt it's existing customers in pursuit of new ones. I matched at 6.1% on november 28th. So you might be able to match your 6% target on the odd day. Although we have not seen the higher 6 rates recently. I am guessing 6.0% matches have been more common. ... i have 6 loans left at 7.8%, i remember then hoping rates would not fall below 7% ☺
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locutus
Member of DD Central
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Post by locutus on Dec 1, 2015 8:06:25 GMT
I'm still not sure I understand how money is matched in RS. If RS are using monthly money at 3.x% to finance longer term loans, then why would they ever use the 5 year money at 6.x%? Obviously it is not that clear cut as some 3 and 5 year money is still being matched but the question still remains.
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Post by dagoatla on Dec 1, 2015 8:28:14 GMT
The 6% rates are annualised, and assumes reinvestment constantly. The real rate on that money without reinvestment averaged out over the lifetime is 3.x%
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Post by westonkevRS on Dec 1, 2015 8:59:07 GMT
I'm still not sure I understand how money is matched in RS. If RS are using monthly money at 3.x% to finance longer term loans, then why would they ever use the 5 year money at 6.x%? Obviously it is not that clear cut as some 3 and 5 year money is still being matched but the question still remains. As I mentioned on another post, the monthly money is used very sparingly over longer dated loans. This is due to the liquidity and interest rate risk, and RateSetter is a very prudent organisation. In a perfect world, yes, we would exclusively use shorter dated money. In the meantime, boring rules. Kevin.
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Post by westonkevRS on Dec 1, 2015 9:01:01 GMT
The 6% rates are annualised, and assumes reinvestment constantly. The real rate on that money without reinvestment averaged out over the lifetime is 3.x% The phrase " without reinvestment" is important. The 3 and 5 year money are used for amortising loans, so you get roughly half your money back within 3 years (on 5 year money). It isn't RateSetter's fault if you choose to neither reinvest with RateSetter nor elsewhere - the lower yield quoted by dagoatla is only true if your returned money sits idle.
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Post by Deleted on Dec 1, 2015 9:13:48 GMT
It kinda of depends on who ratesetter thinks its customers are. For me I'd expect it to have a bunch of KPIs along Grow the businesss Maximise the RS income Stabalise monthly and grow monthly income Avoid defaulters none of which drives you towards raising rates, but rather to lowering them. It is not in RS's interest to be transmitting rates to lenders of >6.0% so every mechanism, including "blurring" the image of the rate to its lenders is perfectly normal business practice. Rather like Amazon's "free" delivery if you pay for Amazon prime So I have no problem with RS's position here and commend them for their business acumen. For me, I don't mind having 1% of my RS capital un-invested for a fortnight if it wins me an extra 0.5% for 5 years (after all there will always be time when money is un-invested). If it doesn't then it's out and away to a pawn broker.
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Post by westonkevRS on Dec 1, 2015 9:26:43 GMT
I can't help but wonder if the 'Your rate' part of the website has been a driving factor in this. And I'm sure the recent incentives have played a part as well, which is a crying shame as Ratesetter has actually hurt it's existing customers in pursuit of new ones. I've done quite a bit of analysis on the numbers of when the lender journey changed and also to align with various member-get-member campaigns and new-member offers. NONE OF THIS IS ADVICE OR GUIDANCE, MAKE YOUR OWN DECISIONS AND CAPITAL AT RISK. LOW RISK, BUT NOT NO RISK The change in the lender rate setting journey did cause more lenders to set their rate rather than rely on Market Rate. This was a rational choice because the "alpha" from setting your own rate marginally increased (we are only talking 0.1% or thereabouts, on average - I'm sure some " experts" on this forum can eak out better returns). However there is no evidence that the change to the lender journey caused the Market Rates to be lower. The various member campaign had two impacts. One was an increase in Market Rate volatility, especially to the monthly market (just a small negligible impact on the 5 year market). But they did bring in a lot of NEW lender money, RateSetter now has 29,779 active lender investors. These did move the markets lower. Both the monthly and 5-year markets have consistently had over £1m in each and didn't get depleted around day 21. I can't remember seeing so much money consistently sitting in the markets over such a prolonged time, this "weight of money" inevitably brings down rates. SO my summary opinion, for what it's worth, is that the lender journey changes bought more active rate setting and volatility, but didn't impact returns. Marketing raised a lot of lender cash, which was happy with lower returns. Lenders who enjoyed the 6.4%+ AER over the summer were disappointed that the same returns were not achievable. Some have left for riskier pastures new, some are still waiting, and some (like me) accepted lower returns. Kevin.
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pikestaff
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Post by pikestaff on Dec 1, 2015 13:14:10 GMT
The 6% rates are annualised, and assumes reinvestment constantly. The real rate on that money without reinvestment averaged out over the lifetime is 3.x% The rate on the money invested is 6%, end of story. What you do with the repayments is up to you and the return that you get on the repayments will depend on what you do with them.
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locutus
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Post by locutus on Dec 1, 2015 14:23:13 GMT
I'm still not sure I understand how money is matched in RS. If RS are using monthly money at 3.x% to finance longer term loans, then why would they ever use the 5 year money at 6.x%? Obviously it is not that clear cut as some 3 and 5 year money is still being matched but the question still remains. As I mentioned on another post, the monthly money is used very sparingly over longer dated loans. This is due to the liquidity and interest rate risk, and RateSetter is a very prudent organisation. In a perfect world, yes, we would exclusively use shorter dated money. In the meantime, boring rules. Kevin. Thanks, that makes sense. Has RS changed their strategy on how they calculate liquidity and interest rate risk? If so, could this not be a big factor in the reason for lower lender rates for long term loans and higher lender rates for the monthly market? If RS changed their strategy even slightly, this would have a big impact on how much monthly market money they would be prepared to lend out for longer terms and affect rates accordingly.
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ribs
Probably not James Marshall
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Post by ribs on Dec 2, 2015 21:35:49 GMT
Well shut my mouth. I got matched at 6.1% yesterday evening. Maybe things are looking up. Maybe it's a blip. Maybe I should put some trousers on.(Don't judge me.)
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