andyc
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Post by andyc on Dec 3, 2016 14:19:39 GMT
55 years old. Max'ed out shares ISA's yielding c. 4%. Residue in Cash ISA's paying nothing so I dipped my toe in the water last year with £500 with RateSetter which recently paid out 3.6%. RS was an excellent intro to P2P - it felt more like a Building Society fixed rate account than rather than lending to random individuals/businesses.
Now, after a fair bit of research, I'm interested in increasing my potential return (and risk) with MoneyThing (like the site, the TP/forum reviews and the company presence here). I deposited £1000 on Friday afternoon (but missed the boat) and now poised to invest on Monday at 4pm. Initially I was simply going to invest the lot into a single loan as it seems MT loan availability can be short lived so this might make 5x£200 longer to achieve. Or even 2x£500.
However, if the initial (6 month) investment works out, I would look to increase to £5k (5x1k) - maybe all with MT or maybe with five separate companies (but that seems like a lot of work, Web sites to learn, passwords to manage and accounts to administer) so £1k chunks seems logical.
I am a bear of simple brain who likes round numbers. I rarely buy shares in < £1k transactions (dealing costs, stamp duty) but does that apply to P2P ? If my single £1k loan defaults, I lose the lot whereas 5x200 obviously limits my exposure to 20%. Would I be able to place 5x£200 with MT almost as quickly as single £1k investment ?
How do you experienced P2P wizards deal with this ?
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archie
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Post by archie on Dec 3, 2016 14:42:42 GMT
I certainly wouldn't put the whole lot in one investment.
To get invested quickly you might put double or treble your normal limit but sell down as new loans launch. With a £1000 you should be looking at a maximum of £100 really, if one loan defaults the interest on the others would cover it (at 12%).
The loans announced so far for next week are all renewals so allocations are small. There isn't a loan on Monday as far I'm aware but there are on all the other weekdays.
Keep an eye on the second market, usually has some activity on days new loans go live in the run up to 4pm.
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ali
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Post by ali on Dec 3, 2016 15:00:42 GMT
Also worth noting the Broadoak bought back a chunk of BPF584 as per their agreement with MT and having been selling it off on the SM at c. £8,000 per weekday. I haven't taken note of what time of day they normally put it up but it tends to take quite a while to sell (nothing wrong with the loan, it's just that most people already have what they want). Should be pretty easy to pick some up.
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Post by Deleted on Dec 3, 2016 15:12:01 GMT
I put down £1000 a month ago and through new loans, renewals and secondary market I've spread it all with maximum £100 exposure (although many are BPF, same company)
May be a bit drier through December but shouldn't take too long to diversify out.
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bg
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Post by bg on Dec 3, 2016 15:34:13 GMT
In your situation I would probably try and diversify over 8-10 loans but given the state of the market I would grab a decent slice of the first loan I could.
For example if a chunk of one loan goes on the market, why not buy £600 of it while you can? Then next time another loan is up for sale you could buy £300 of that (say, meaning £900 invested)...and when you do, put some of the £600 of the first loan back up for sale (and in the meantime you still have £100 for a third loan if that comes before any is sold). Keep juggling the balances like this until you have £100-150 in a number of loans. That way you have less time with cash earning nought.
I would also transfer my cash isa into a stocks and shares ISA. Cash just loses money in real terms. Unless you have a need to be liquid in the coming months I would put it in a productive asset.
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ben
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Post by ben on Dec 3, 2016 15:48:04 GMT
For that amount if you wanted to invest it asap I would not bother with any of the manual investment sites, it would take too long to get a decent diversification. The decent loans go quick and it takes time to get invested. Most people seem to think they have a right to decently diversify their investments in an afternoon which is not reality. I would personally look at something like bondmason (or similar) to begin with, lower returns but less hassle and invest over time in the sites when good loans become avaliable. Although it seems to be a big jump in risk from the lower edge of risk to some of the higher riskier loans. Would something like Lend Invest that is more in the middle (although rates dropping) be more suitable at this point.
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boundah
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Post by boundah on Dec 3, 2016 17:35:06 GMT
I would also transfer my cash isa into a stocks and shares ISA. Cash just loses money in real terms. Unless you have a need to be liquid in the coming months I would put it in a productive asset. I also have most of my savings in stocks & shares ISAs but would be cautious about advising anyone to move out of cash and into equities without knowing a lot more about their situation (not that we can advise on this forum anyway). Historically shares have outperformed cash over the long term but there's no guarantee this will apply over any given future time-frame. I happen to believe equities are pretty high-risk at the moment (Trump, Brexit, inflation, interest rates, European elections etc) so am starting to move more into cash despite its drawbacks.
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bg
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Post by bg on Dec 3, 2016 17:57:30 GMT
I would also transfer my cash isa into a stocks and shares ISA. Cash just loses money in real terms. Unless you have a need to be liquid in the coming months I would put it in a productive asset. I also have most of my savings in stocks & shares ISAs but would be cautious about advising anyone to move out of cash and into equities without knowing a lot more about their situation (not that we can advise on this forum anyway). Historically shares have outperformed cash over the long term but there's no guarantee this will apply over any given future time-frame. I happen to believe equities are pretty high-risk at the moment (Trump, Brexit, inflation, interest rates, European elections etc) so am starting to move more into cash despite its drawbacks. There are a world of things you can invest in in a stocks and shares ISA that are not directly correlated to the stock market (bonds, hedge funds, infrastructure, energy, commodities, short ETFs, currencies, specialists...to name but a few) Having said that I disagree. Trump, Brexit etc I think mean people are under exposed to equities with economic growth expanding at a decent clip and I think they will squeeze higher (I added to my exposure the day after the US election). You mention inflation but in an inflationary environment I would be invested in equities over bonds every single time (companies can pass on rising prices to their customers). For me a cash ISA is a waste of the tax wrapper. Far better to hold cash outside an ISA (I'm basing this on the original poster saying he has savings over and above his ISA holdings).
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agent69
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Post by agent69 on Dec 4, 2016 9:59:16 GMT
I'm selling out of TC and thought I would give MT a try.
Is the current dearth of loans the norm, or are we just going through a quiet spell? I'm keeping an eye on the SM, and am getting fed up looking at '£0 available funding remaining'
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ben
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Post by ben on Dec 4, 2016 10:12:19 GMT
If you leave it a month or two then there would be enough new loans to invest in and usually when loans are issued there is secondary market activity.
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adrianc
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Post by adrianc on Dec 4, 2016 10:43:29 GMT
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SteveT
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Post by SteveT on Dec 4, 2016 12:51:20 GMT
Definitely going through a quiet spell for new loan origination just at the moment, as Ed acknowledged in this week's pipeline update email.
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agent69
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Post by agent69 on Dec 4, 2016 13:08:25 GMT
Thanks for the link. Confirms that SM activity has just about shrunk to nil. Hopefully things will pick up shortly
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fp
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Post by fp on Dec 4, 2016 13:19:24 GMT
Without a doubt, I found the best time to diversify is on the day when a new large loan is released, the SM is very active with people selling to re-balance their portfolio and you can usually pick up a good selection of loans.
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andyc
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Post by andyc on Dec 5, 2016 8:52:37 GMT
Excellent, informed advice and plenty of food for thought. Many thanks to all.
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