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Post by mukiwa on Mar 10, 2017 21:35:14 GMT
Maybe. Maybe not. The first we could know about a significant problem could be an e-mail from RS saying that the Rolling market has been disabled. I certainly hope not, but who can say? Out of interest, are you only in RS, or diversified across a few platforms? Just in RS to be honest. But I know I probably have too much with with them, more than I want. Any inkling of drama and I'll pull the lot.
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angrysaveruk
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Post by angrysaveruk on Mar 10, 2017 21:37:42 GMT
I pulled my lot out of the 5, 3, and 1 year markets. Account stayed open so re-invested all (£410k ish) into rolling in the last couple of days. I have no problem with this. Hopefully if the sh*t hits the fan this forum will be way ahead of the rest to do something about it? I wouldnt put anything into P2P you cant afford to lose. History of financial markets is by the time you know it is going to hit the fan it is already too late.
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Post by newlender on Mar 11, 2017 6:00:35 GMT
Referring back to the figures about the % of investors selling out following the new T&Cs. By their very nature forums like this tend to attract the very savvy folk who weigh up the risks and who quite often have large sums invested - hence the talk and discussions about drawing down or selling out. I'd be very surprised if more than a few hundred people have actually left RS. I always work on the basis of 'could I afford to lose this money or a lot of it if RS goes belly up?' I've read the new T&Cs and frankly don't see a big problem so will continue to keep my money invested. I do think that the amounts going into Rolling are a concern, but that just reflects the lowish rates in the other products - people are waiting for better times, I think. As soon as rates for the 5 year are over 6% again on a regular basis things will normalise.
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alender
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Post by alender on Mar 11, 2017 10:03:42 GMT
With the amount in the rolling market which is being lent out around 3%ish it is unlikely RS will need to put up rates in the 5 year market, they will fund many of the long term loans from the rolling market as long as they can. There was some rises last month probably due to RS refinancing the loans from the free sell out but I now expect rates to drop for the time being. Time to go elsewhere where the risk/reward ration is better and the platform can not dip into your funds at the first sign of trouble.
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angrysaveruk
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Post by angrysaveruk on Mar 11, 2017 12:06:53 GMT
Referring back to the figures about the % of investors selling out following the new T&Cs. By their very nature forums like this tend to attract the very savvy folk who weigh up the risks and who quite often have large sums invested - hence the talk and discussions about drawing down or selling out. I'd be very surprised if more than a few hundred people have actually left RS. I always work on the basis of 'could I afford to lose this money or a lot of it if RS goes belly up?' I've read the new T&Cs and frankly don't see a big problem so will continue to keep my money invested. I do think that the amounts going into Rolling are a concern, but that just reflects the lowish rates in the other products - people are waiting for better times, I think. As soon as rates for the 5 year are over 6% again on a regular basis things will normalise. THe main reason I took advantage of the free sell out was because I was thinking of doing this anyhow because I wanted to reduce my exposure to P2P given how volatile the world seems to be at the moment. Basically I managed to save about £1500 in sellout fees. I have been with Ratesetter since 2013 when they were only providing personal loans. Their move into business loans was not something I was very comfortable with. My only substantial P2P holing at the moment is with Zopa which I consider to be the least risky platform. I was lucky enough to park the money into Atom bank for a year at 2% which has FSCS coverage vs 3% in the rolling/1year market on ratesetter. I would say there is more than a 1% risk of there being problems in the P2P sector over the next year.
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goofy115
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Post by goofy115 on Mar 11, 2017 12:58:57 GMT
Referring back to the figures about the % of investors selling out following the new T&Cs. By their very nature forums like this tend to attract the very savvy folk who weigh up the risks and who quite often have large sums invested - hence the talk and discussions about drawing down or selling out. I'd be very surprised if more than a few hundred people have actually left RS. I always work on the basis of 'could I afford to lose this money or a lot of it if RS goes belly up?' I've read the new T&Cs and frankly don't see a big problem so will continue to keep my money invested. I do think that the amounts going into Rolling are a concern, but that just reflects the lowish rates in the other products - people are waiting for better times, I think. As soon as rates for the 5 year are over 6% again on a regular basis things will normalise. THe main reason I took advantage of the free sell out was because I was thinking of doing this anyhow because I wanted to reduce my exposure to P2P given how volatile the world seems to be at the moment. Basically I managed to save about £1500 in sellout fees. I have been with Ratesetter since 2013 when they were only providing personal loans. Their move into business loans was not something I was very comfortable with. My only substantial P2P holing at the moment is with Zopa which I consider to be the least risky platform. I was lucky enough to park the money into Atom bank for a year at 2% which has FSCS coverage vs 3% in the rolling/1year market on ratesetter. I would say there is more than a 1% risk of there being problems in the P2P sector over the next year. The 2% fixed rate for a year at atom bank is now no longer available due to overwhelming demand.They are now paying 1.8% for a 1 year term.
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Post by davee39 on Mar 11, 2017 15:05:13 GMT
3% is 33.3% higher than 2%, not 1% higher.
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agent69
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Post by agent69 on Mar 11, 2017 15:29:30 GMT
3% is 33.3% higher than 2%, not 1% higher. 3% is 50% more than 2%. 2% is 33.3% less than 3%
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angrysaveruk
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Post by angrysaveruk on Mar 11, 2017 16:02:44 GMT
3% is 33.3% higher than 2%, not 1% higher. 1% in absolute terms ie 3% - 2% = 1% ie you earn 1% more on your money. and as pointed out it isnt 33.3% proportionally
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angrysaveruk
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Post by angrysaveruk on Mar 11, 2017 16:11:33 GMT
THe main reason I took advantage of the free sell out was because I was thinking of doing this anyhow because I wanted to reduce my exposure to P2P given how volatile the world seems to be at the moment. Basically I managed to save about £1500 in sellout fees. I have been with Ratesetter since 2013 when they were only providing personal loans. Their move into business loans was not something I was very comfortable with. My only substantial P2P holing at the moment is with Zopa which I consider to be the least risky platform. I was lucky enough to park the money into Atom bank for a year at 2% which has FSCS coverage vs 3% in the rolling/1year market on ratesetter. I would say there is more than a 1% risk of there being problems in the P2P sector over the next year. The 2% fixed rate for a year at atom bank is now no longer available due to overwhelming demand.They are now paying 1.8% for a 1 year term. Was lucky to get in quickly. Worth checking this page periodically for the best deal on bank deposits: www.moneysavingexpert.com/savings/savings-accounts-best-interest
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alender
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Post by alender on Mar 11, 2017 17:28:59 GMT
3% is 33.3% higher than 2%, not 1% higher. This is true but risk is measured in absolute terms not relative, i.e. if there is a 1% chance of not getting your money back then 3% rate equals 2% rate which is 100% safe or a 9% rate equals 10% which is 100% safe even thought the differential between 2% and 3% is a lot different than 9% and 10%.
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Post by GSV3MIaC on Mar 11, 2017 17:53:52 GMT
/mod hat off
Close but no cigar .. if there is a 1% risk of complete loss, then the return (including your capital) on a 3% rate is 103%*99%, and the return on a 12% rate is 112%*99% .. and even that depends on when the loss happens (you may already have had some interest) and whether the 'complete loss' is really complete or just 'rather drastic'. 8>.
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angrysaveruk
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Post by angrysaveruk on Mar 11, 2017 19:56:28 GMT
/mod hat off Close but no cigar .. if there is a 1% risk of complete loss, then the return (including your capital) on a 3% rate is 103%*99%, and the return on a 12% rate is 112%*99% .. and even that depends on when the loss happens (you may already have had some interest) and whether the 'complete loss' is really complete or just 'rather drastic'. 8>. It is a pretty good approximation, if P is the probability of a total default and r is the interest rate E(V) = (1+r).(1-P) = 1 + r - P - r.P . In the case where r is 3% and p is 1% the difference is about 0.03%
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Post by GSV3MIaC on Mar 11, 2017 20:29:28 GMT
Which is why I said 'close' .. it's somewhat less close when r = 20% and p=10% (the ReBS/FC-E-loan cases, iirc)
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alender
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Post by alender on Mar 11, 2017 20:44:58 GMT
/mod hat off Close but no cigar .. if there is a 1% risk of complete loss, then the return (including your capital) on a 3% rate is 103%*99%, and the return on a 12% rate is 112%*99% .. and even that depends on when the loss happens (you may already have had some interest) and whether the 'complete loss' is really complete or just 'rather drastic'. 8>. /no money left to buy a hat The way I look at it the 1 % is risk is AER as interest rates are reported as AER, therefore A return of 2% on £100 for 1 year is £102 A return of 3% on £100 for 1 year is £103 If 1% (AER) is the risk on the initial 3% investment then the average return for the year on the 3% investment is £103 - £100 * 1% = £102 A return of 9% on £100 for 1 year is £109 A return of 10% on £100 for 1 year is £110 If 1% (AER) is the risk on the initial 10% investment then the average return for the year on the 10% investment is £110 - £100 * 1% = £109 The difference occurs when the 1% default occurs in mine I assume there is an overall risk of 1% AER, in your calculation yours you assume it occurs right at the end of investment. Anyway the difference as has been stated is very small but my point is that an investor assessing risk should look at the absolute difference of the rates not as a proportion. From some comments I have seen there seems to be a tendency for some people to look at the difference in the proportion of the rates paid by FSCS protected investments and P2P sites not the absolute value which is a much better assessment of the risk.
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