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Post by Deleted on Oct 21, 2016 7:19:00 GMT
Options, yes I too am concerned that bubbles burst, I'm not saying dive in without understanding, I'm just saying ignoring them is mad. We have yet to see what P2P does when the trigger that burst the bubble has its affect on this sector.
Hasel, no, I'm talking about Funds (ETF= Exchange Traded Funds), Vanguard manage a number of funds for example, but the assets in Funds do not need to be stocks and shares. Past performance can be an indicator of future performance and it can be a complete disconnect. You have to look at a whole bunch of underlying factors, so just like doing research in P2P. When bubbles burst that money still has to go somewhere, it cannot all end up under the matress.
I've seen enough bubbles burst in the last 50 years to know that bubbles burst and reform (or is that refoam)
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upland
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Post by upland on Oct 21, 2016 10:11:35 GMT
With £175K to invest would forumites suggest I spread the risk by using another 2 or 3 sites, stick with FS as they offer reasonable security for loans which some sites don't (in my view). I do intend to leave my Ratesetter and Zopa accounts funded at the level they are.
I admire your confidence in the security of FS loans, and despite the fact FS will soon be my largest platform as my AC account dwindles, "reasonable" is not the adjective I would use for the security backing quite a few loans on FS whose valuations frequently have rather too much "hope value" in them for my liking. I skip more than I invest in. A max of 10% of net wealth into p2p sounds about right ... I'm at 15% but spending a LOT of time on due dilligence to try to minimise the risk, but as one of my secured loans on TC shows if the borrower has engaged in fraudulent practises (its speculation for now, but seems likely) it will be a total loss and was undetectable by casual due dilligence if as seems likely the accounts filed at companies house are a work of fiction. Diversification across loans and platforms is ESSENTIAL, and if you do decide increase your p2p holdings I would recommend considering more platforms. You should be targetting a maximum of between 0.5% and 1% of your p2p pot per loan (1% on better secured loans, 0.5% on weaker loans, 0% on loans whose worst case valuation is a capital loss on realisation). I would go along with most of this. I like diversification over markets , platforms and individual investments but it takes time. My DD is probably a bit simple and I tend to go for volume in the expectation that they will recover much of the debt and my batting average is not overly compromised. I feel at the moment the 'industry' is rather young and we have not been through an economic downturn or property downturn. With interest rates on the ground I am happy with things as they are , but when it does happen our optimism will be tested. I am often dubious about some of the valuations of many loans on many platforms and %70 will probably not be enough to cover it all should it go wrong when things turn bad. Still as long as you never need it then things are fine!
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Post by Financial Thing on Oct 21, 2016 14:10:00 GMT
Take care with property, loans where planning permission is not present and developments half complete are worth very little. I'd also suggest that 12% is not a good rate in the market. You can pick up 18 to 20% in some funds year after year, P2P has a place in the market but just that, it is certainly not the best game in town. I recommend you look at trustnet and revew annual rates of greater than 15% and volatility of less that 13% and you'll find a bunch of funds with consistent great results. Turning your back on them is just crazy. Personally, my stocks and shares money all goes into just one ETF, Vanguard all world. You had me at Vanguard! 
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spiral
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Post by spiral on Dec 16, 2016 12:21:44 GMT
Is there an obvious reason why someone would buy 2 say £500 loan parts than just 1x£1000?
Looking at the "Current investment" list, I quite often see 2 consecutive investments from the same person. (I assume the list is in time order as it is not alphabetical).
I can only assume there is a secondary market benefit from doing this but would appreciate any thoughts anyone might have.
Thanks in advance.
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Post by mrclondon on Dec 16, 2016 16:49:52 GMT
Is there an obvious reason why someone would buy 2 say £500 loan parts than just 1x£1000? Looking at the "Current investment" list, I quite often see 2 consecutive investments from the same person. (I assume the list is in time order as it is not alphabetical). I can only assume there is a secondary market benefit from doing this but would appreciate any thoughts anyone might have. Thanks in advance. Various reasons: a) the drop down selection of bid values doesn't conatin the option you want, so you have to make £1000 followed by £125 for example if you want to use all the cash that is in your account b) as soon as you've made a bid using up all your cash, one or more of your loan parts sells on the SM and you then feed the cash into which ever loan is currently your favourite on the PM. c) for renewal loans you may have multiple parts in the previous loan for the above reasons and/or through SM purchases, and when FS roll them into the new loan they become sequential in the list
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spiral
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Post by spiral on Dec 16, 2016 18:02:13 GMT
I had thought of b but not a and c. So not deliberately intentional, just untidy housekeeping.  Thanks. |
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mikes1531
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Post by mikes1531 on Dec 17, 2016 12:33:38 GMT
I had thought of b but not a and c. So not deliberately intentional, just untidy housekeeping. And self-perpetuating and getting worse with time. My list of loan parts held just keeps getting longer and more difficult to manage. And I can't easily see how much I have invested in a given loan without doing my sums. And it even clutters up the SM, as people who wish to sell all they own of a given loan have to list multiple parts for sale rather than just one. fundingsecure need to work out how to reduce this clutter. At the very least, they should consolidate parts bought on the same day. And when a loan is renewed, all parts rolled over should be consolidated. Also, as has been suggested by others, there ought to be a way of separately dealing with interest accrued before a loan is activated, so that all of an investor's parts could be consolidated into a single part when the loan is activated. PS. Actually, I can think of an advantage to having multiple parts in a single loan... When it renews, the investor can set their 'Renew?' flags so as to renew only part of their investment. I suppose this could explain why some people deliberately might make their investment in multiple pieces.
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michaelc
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Post by michaelc on Dec 17, 2016 17:27:58 GMT
With £175K to invest would forumites suggest I spread the risk by using another 2 or 3 sites... I certainly would and I'd invest the whole lot in P2P investments that are secured by bricks and mortar at LTV max 65%. Only two ways to lose your capital are if property prices plummet or if the P2P site runs off with your loot. P2P sites are on to a good earner so it's in their own interest to continue running. I've diversified £230k through more than 100 property loans and get £1900 monthly for sitting on my backside. I raised the £230k from selling a buy to let property I owned. Equally I could have left that £230k in the buy to let and still have been subject to capital loss in a property crash. How long approx did that it take to build up 100 loans? I'm doing something similar but am a little afraid I'm going in a bit too quickly.
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