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Post by chris on Apr 5, 2018 8:50:06 GMT
Chris thanks for the explanation, this way seems to increase the risk level and could upset all the investors in the account if there was a default of the big holding. This could be some new investor's only P2P investment. It depends on market conditions at the point of investment. If there are an abundance of loans when you invest then moving towards the average is going to increase concentration in specific large loans where the global average is higher. However if there are few loans available when you invest then moving towards the average will improve your diversification massively whilst still allowing you to deploy your funds quickly. In either scenario as new funds and new loans are bought by the account then the global average is improved as everyone buys into those loans, improving diversification for all.
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