mullet
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Post by mullet on Dec 19, 2017 22:08:48 GMT
How are all the people saying 0.5% allocation whilst avoiding 2nd charges etc finding ~200 good quality loans on FS!!!
This may be possible if your 0.5% is equal to £25 and you are very quick to get the pawn loans. If you want to cherry pick the good loans and invest a larger amount you really need to be splitting it across multiple platforms
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Doc
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Post by Doc on Dec 19, 2017 22:25:37 GMT
Anyone thinking diversification is silly would be wise to review all the "Unredeemed" loans on FS, and try to convince themselves that they would have "avoided" each and everyone without the benefit of hindsight. It is true that diversification will tend towards the average return (which for some is not sufficient) - but Buffett also says that for most people "index trackers" are the way forward - the equivalent in P2P is extreme diversification and/or automated lending that takes a small slice of each loan. Even if a loan looks wonderful on paper, there is always the chance of (a) security perfection cock-up, (b) fraud, (c) platform failure I agree, perhaps diversification or auto lending (FC) is the best/safest way to lend for most lenders. Although I think I'll stick with my non-diversification strategy for now, based on doing the best DD I can do, more time consuming and not foolproof by any means, but after 3 years of P2P investing (mainly on FS) with no losses ... perhaps I've just been lucky so far.
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Post by brightspark on Dec 19, 2017 22:29:42 GMT
What do other investors here think is a good amount of diversification on this platform? i.e. out of your total investment here how many % would you consider putting into one loan? I would only put into any one loan an amount that I would not lose sleep over if totally lost. To answer your specific question £500 used to equate to 3% of my FS holding but nowadays £200 equates to 7.5% of a much reduced FS holding. I now rarely hold FS loans to term and have become very choosy which loans I go for - pretty much first tranche non-renewed property loans with planning in place. Hindsight is a wonderful thing and mine has the benefit of experience from the Wind Turbine fiasco, the stalled Rishton loan, the forever being demonstrated Powerboat and the Knaresborough white elephant. I consider myself lucky not to have Whitehaven in my portfolio.
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7d7
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Post by 7d7 on Dec 22, 2017 20:14:50 GMT
What do other investors here think is a good amount of diversification on this platform? i.e. out of your total investment here how many % would you consider putting into one loan? I would only put into any one loan an amount that I would not lose sleep over if totally lost. To answer your specific question £500 used to equate to 3% of my FS holding but nowadays £200 equates to 7.5% of a much reduced FS holding. I now rarely hold FS loans to term and have become very choosy which loans I go for - pretty much first tranche non-renewed property loans with planning in place. Hindsight is a wonderful thing and mine has the benefit of experience from the Wind Turbine fiasco, the stalled Rishton loan, the forever being demonstrated Powerboat and the Knaresborough white elephant. I consider myself lucky not to have Whitehaven in my portfolio. The same applies here. FS is the type of platform that excites a newbie. As they're solely interested in quantity rather than quality, the investor is amazed by the number of opportunities available. One starts relying on their dubious information e.g. valuations and then 6 months or so down the line the bitter truth unravels. You start to regret the selections you made as your losses gradually magnify. With Wind Turbine, I was expecting at most a 50% loss but receiving peanuts after a long wait was difficult to swallow. FS made no ex-gratia payments considering their poor handling of the loan and their efforts to pursue further monies from the borrowers have resulted in zilch. Likewise, the other loans mentioned above are heading southwards and I've decided to forget them. It would be wise to err on the side of caution unless you plan on allocating £25 to each loan.
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