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Post by rollercoaster on Oct 19, 2017 22:56:29 GMT
An investment strategy question for you. Given that moneything's niche is property loans, do any of you actively hedge your investments in any way elsewhere?
If so, where? There are the normal things like gold. But this is peer to peer lending so there is more appetite for risk!
I was struggling to see anything on the commute home that was directly countering.
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Post by dan1 on Oct 19, 2017 23:27:40 GMT
An investment strategy question for you. Given that moneything's niche is property loans, do any of you actively hedge your investments in any way elsewhere? If so, where? There are the normal things like gold. But this is peer to peer lending so there is more appetite for risk! I was struggling to see anything on the commute home that was directly countering. I guess the main risk to the overall property development industry in the UK are house prices, at least residential. In which case you could perhaps short the major house builders, bet against the house prices index (spread betting I assume), sell up and rent even although a tad extreme. If it's as a result of uncertainty due to impending political events then perhaps invest in assets denominated in USD but remember the cause of the GFC. Just some random unconsidered thoughts! Edit: you may get a more comprehensive response if you post on the General P2X board, there is currently an excellent discussion on Property Development Lending
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r00lish67
Member of DD Central
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Post by r00lish67 on Oct 20, 2017 9:32:30 GMT
Interesting question, some more random scattered thoughts from me this time.
If you're talking just about MT, I don't think a hedge can really apply, for the reason that I don't believe you could find an asset to invest in that would move in the other direction in a highly correlated enough fashion i.e. there's too much random noise and too few loans on MT.
If you're talking about a highly diversified property portfolio of hundreds of different property loans, then I suppose as Dan says you could start shorting industries that suffer with lower house prices.
Do I do it? No. I don't think this sort of lending is 'pure' enough to have something to reliably hedge with. Diversification across a) assets outside of P2P (e.g. Shares/cash/BTL) and b) different sorts of assets within P2P (bling, cars, dare I say it - boats) - Yes. Although I think everyone here generally really struggles to sufficiently diversify away from property.
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Post by GSV3MIaC on Oct 20, 2017 18:21:24 GMT
Which isn't surprising, if you look at where most of the asset-value in the country actually is (company shares, and property). ISTM that one large development loan/building site, or city office block (Somerset tins sheds don't count) will trump all the bling you can pawn, and several acres of used autos or super yachts.
And no, I haven't figured out how to hedge, apart from not getting too over exposed/leveraged in the first place.
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