ashtondav
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Post by ashtondav on Jan 13, 2018 21:42:05 GMT
i have now lent out about 10k over four months and 400 loan parts via autobid. The dashboard is showing me getting an annualised return of 5.6% (last month before the last £1,000 invested it was 5.9%). My all time earnings are £161 less £75 of bad debt. The bdashboard also shows I should get a "fully diversified return" of 7.6%. I don’t think this is looking promising and I will therefore focus on other platforms - but am I missing something?
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trevor
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Post by trevor on Jan 13, 2018 21:50:39 GMT
I think you have been unlucky.
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agent69
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Post by agent69 on Jan 14, 2018 9:38:13 GMT
The dashboard also shows I should get a "fully diversified return" of 7.6%. I don’t think this is looking promising What were you expecting? I thought 7.5% was the target rate
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bloodycat
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Post by bloodycat on Jan 14, 2018 10:40:24 GMT
It's probably a bit too early to tell at the moment - I think you probably need to wait another 6 months to get a better idea.
You would appear to have been slightly unlucky to have already got £75 bad debt and you will probably get a few more bad debts - but also some recoveries over time (currently averaging ~30% on my account).
Personally I suspect the projected 7.5% return is a little optimistic, but not impossible - dependent on FC maintaining the right balance of loans in the different risk bands and correctly assessing risk and setting rates accordingly, rather than chasing volume of loans at the expense of proper due diligence . There is also a significant risk that the level of defaults will increase due to the underlying economic environment.
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Post by misterp2p on Jan 14, 2018 13:02:38 GMT
Estimated Fully diversified return for me is 6.8% ..been in since August 2016...this figure has gradually declined . For my wife EFDR is now down to 7%..Classic is headlining 7.2% now so coming up short ?
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Post by df on Jan 14, 2018 13:23:43 GMT
i have now lent out about 10k over four months and 400 loan parts via autobid. The dashboard is showing me getting an annualised return of 5.6% (last month before the last £1,000 invested it was 5.9%). My all time earnings are £161 less £75 of bad debt. The bdashboard also shows I should get a "fully diversified return" of 7.6%. I don’t think this is looking promising and I will therefore focus on other platforms - but am I missing something? 4 months is a little too early for making conclusions. I'd give it a year.
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ashtondav
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Post by ashtondav on Jan 14, 2018 18:35:04 GMT
The dashboard also shows I should get a "fully diversified return" of 7.6%. I don’t think this is looking promising What were you expecting? I thought 7.5% was the target rate It still says 7.6%, under my underwhelming actual of 5.6%. I will give it a year before throwing in the towel.
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markr
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Post by markr on Jan 14, 2018 22:18:27 GMT
The problem is that negative events (losses) are rapid, but positive events (payment of interest and recoveries) are slow, often glacial in the case of recoveries. By chance, you've been hit with a few negative events early on, but you would reasonably expect over time, unless you have been jinxed, regression to the mean would bring your returns back towards the predicted result.
As an example of this, FC predict that annual losses after recoveries will be ~2%. They also predict that they can recover ~50% of losses. So a mature, "steady state" account will be losing about 4% per year, but offsetting that with 2% recoveries. But it can take years before a defaulted loan even begins to make recovery payments, so a new account will be losing the 4% but not making any recoveries.
Anyway, my conclusion would be that if you sold out and abandoned FC now, you'd very likely be "selling low", so your best option is to stick with it!
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trevor
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Post by trevor on Jan 14, 2018 22:29:35 GMT
Agreed. I've been with Fc over 3 years and I'm getting recoveries from defaulters after just 6 months in.
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loadsahope
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Post by loadsahope on Jan 15, 2018 12:56:21 GMT
FWIW - the other half and I both set up accounts at around the same time (just over a of week apart), and put the same amount in each. They were set up about a week apart in September, and both used auto-allocation (this was before mandatory auto-allocation, but we used it anyway).
One ended up with an estimated 7% return, the other with an estimated 7.5%. Obviously quite a lot of overlap between the two portfolios.
Interestingly, the 7% estimate one is doing better after losses than the 7.5% one.
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Post by skint4achange on Jan 15, 2018 13:13:21 GMT
FWIW - the other half and I both set up accounts at around the same time (just over a of week apart), and put the same amount in each. They were set up about a week apart in September, and both used auto-allocation (this was before mandatory auto-allocation, but we used it anyway). One ended up with an estimated 7% return, the other with an estimated 7.5%. Obviously quite a lot of overlap between the two portfolios. Interestingly, the 7% estimate one is doing better after losses than the 7.5% one. I would probably expect that. Given that the account with the higher estimated return had more higher grade accounts and as such had more defaults. Also the fact that the account is still so young, there has not been any chance for default recoveries to take place.
You may find that as time goes on, and recoveries are made, the 7.5% account may start to have better returns.
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