olof
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Post by olof on Oct 27, 2017 18:34:22 GMT
After having managed small amounts of money for people investing in stocks and bonds, mostly focusing on fundamental analysis of assets I started becoming more and more interested in the more stable returns offered by P2P-assets and similar investment opportunities in real estate. After having done this as a hobby for two years it has grown into a somewhat larger hobby where I now manage a company that are moving towards concentrating on offering diversification among P2P-lending sites (and similar). My vision is that we will only invest in assets outside of the stock market so that our portfolio will provide a complement to the assets that the shareholders already has in stocks and mutual funds. I would really like to read about your ideas for diversifying between different countries, currencies and types of loans. Right now the assets in our portfolio looks like this: Mintos - 23% Kameo.se - 21% (swedish site offering SME-loans secured by property in SEK/NOK) Property Partner - 14% ViaInvest - 14% Lendy - 7% Twino - 6% Viventor - 6% Iuvo-Group - 6% Bulkestate - 3% With about 85% of total assets in cash. I understand that I should move towards a better divide between buyback and asset backed loans. Furthermore, a lot of available platforms that are easy to use deal in euro. This can provide a currency risk and for example using the currency exchange at Mintos is expensive and diversifying into different currencies that way means that the funds are basically stuck there for a long time - which can be a problem if there is a shortage of available loans in that currency. Most likely most assets will be in SEK, EUR and GBP. Do you have any thoughts or recommendations for this preliminary portfolio? Would you like to share your strategy for P2P-diversification and risk mitigation?  |
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Post by wiseclerk on Oct 27, 2017 21:13:01 GMT
As for balancing you could look at it 1) geographically (and by underlying currency) 2) by type of loan a) consumer b) property c) non-property SME - potentially with short term invoice financing as sub category 3) by loan terms 4) by risk /reward ratio (taking past default levels and interest rates as a rough gauge, where reliable information available - loanbook download) So to spread out some platforms you could look at are Linked Finance, Fellow Finance, Estateguru, Lendix, Bondora, Investly, Moneything, ... Have a look at this comparison tool of mine (it is in German language as it is mainly used by German, Swiss and Austrian investors) but it will work for European investors in general and the selection criteria will give you some ideas which platform match which of your criteria I am available for consulting. PM or email me to discuss, if desired. |
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olof
Posts: 8
Likes: 2
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Post by olof on Oct 27, 2017 23:04:22 GMT
Thanks for the reply Wiseclerk. I think risk mitigation is very important - especially in a portfolio that is concentrated on the P2P market. I will definitely use all four of your points and I think investing in property ownership is one important step to lower the risk. I think something that strong P2P investors should think about is a scenario where a financial crash happens similarly to 2008. It seems reasonable that a lot of loans could default and platforms might go bankcrupt/not be able to cover buyback guarantees.
How to prepare for this scenario? (which regularly occurs). It seems like there are few great options. Owning property with small loans are one way. Maintaining some of the portfolio in government bonds - or at least transferring funds from riskier P2P-loans to bonds in the wake of a recession might be part a good continuity plan.
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Post by moneymakingmoney on Oct 28, 2017 0:52:42 GMT
Thanks for the reply Wiseclerk. I think risk mitigation is very important - especially in a portfolio that is concentrated on the P2P market. I will definitely use all four of your points and I think investing in property ownership is one important step to lower the risk. I think something that strong P2P investors should think about is a scenario where a financial crash happens similarly to 2008. It seems reasonable that a lot of loans could default and platforms might go bankcrupt/not be able to cover buyback guarantees. How to prepare for this scenario? (which regularly occurs). It seems like there are few great options. Owning property with small loans are one way. Maintaining some of the portfolio in government bonds - or at least transferring funds from riskier P2P-loans to bonds in the wake of a recession might be part a good continuity plan. I would avoid Bondora, but EstateGuru ain't bad at all so far. Look into Grupeer and Robo.Cash. Definitely my two favorites at the moment. Both stupidly simple and they just work. Feel free to PM me if you want any promo code or some sorts, so we can both benefit
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Post by dutchman on Nov 13, 2017 14:14:37 GMT
I agree, the p2p market hasn't seen a 2008 scenario so better be careful.
I guess morgages and car loans would be slightly better since it has something to sell in case of a lender default.
The question will be if it can be sold and at what price (who wants a 2th hand car if there are thousands for sale...)
My 2 cents...
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Post by moneymakingmoney on Nov 19, 2017 2:44:25 GMT
I agree, the p2p market hasn't seen a 2008 scenario so better be careful. I guess morgages and car loans would be slightly better since it has something to sell in case of a lender default. The question will be if it can be sold and at what price (who wants a 2th hand car if there are thousands for sale...) My 2 cents... From what I understand from any loan with buyback guarantee it's that you still hold the claim rights if a company goes bankrupt. Nevertheless it's still very unlikely that you get your money back. I mean it's not worth the effort anyway if you have small loans. The bigger companies are very unlikely to go bankrupt though as they earn a larger percentage on any loan they give out.
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