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Post by captainconfident on Aug 24, 2018 10:19:44 GMT
The best you can hope for with an equity investment is a never ending increase in capital value and dividends, vis, for the sake of argument, Alphabet. The best you can hope for with an at par fixed income product is that they pay the coupon and don't default before the redemption date. That's all very well if you bought shares in Alphabet, rather than a share or fund that did less well. I'm an averagely stupid mutt who invested long term in P2P and it is clear to me that any similar diversified P2P portfolio will have delivered 7%+ annually (thus far) including all the defaults before the redemption date. Fine, there has been a long bull run on the stock markets, but longer term, the 'fixed income product' might surely compare well to the stocks and share choices I might make.
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registerme
Member of DD Central
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Post by registerme on Aug 24, 2018 11:37:22 GMT
I still believe that P2P is beneficial, disruptive, and can provide good returns. What I don't believe in is riskless high return loans managed by platforms that have demonstrated their lack of competence.
People who invest in 12%+ loans are going to take hits. Some proportion of the people who don't diversify when they invest in 12+% loans are going to take very large hits. Some proportion of the people who invest uncritically in 12%+ loans are going to take very large hits.
Equally some people are just going to get lucky and dodge the bullets out there.
To those who feel they understand the risks, and have the stomach for it, I say "good for you". To those who don't understand what they are getting into I say "get out". To the rest of us I say "diversify across loans and platforms, avoid platforms that have demonstrated their lack of competence, try and understand the risks, be critical in your thinking, and expect to take some hits".
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arby
Member of DD Central
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Post by arby on Aug 24, 2018 22:30:32 GMT
I still believe that P2P is beneficial, disruptive, and can provide good returns. What I don't believe in is riskless high return loans managed by platforms that have demonstrated their lack of competence. People who invest in 12%+ loans are going to take hits. Some proportion of the people who don't diversify when they invest in 12+% loans are going to take very large hits. Some proportion of the people who invest uncritically in 12%+ loans are going to take very large hits. Equally some people are just going to get lucky and dodge the bullets out there. To those who feel they understand the risks, and have the stomach for it, I say "good for you". To those who don't understand what they are getting into I say "get out". To the rest of us I say "diversify across loans and platforms, avoid platforms that have demonstrated their lack of competence, try and understand the risks, be critical in your thinking, and expect to take some hits". Exactly. Losses will be commonplace on some platforms, while others which make use of provision funds can still experience them. Always good to remind ourselves of this. Everyone should go into it with their eyes open and set some ground rules for themselves. e.g. on funding secure, my plan was to be 100 loans at £100 each. At the start I would get a bit excited when I saw a 'guaranteed' easy profit and would invest more. Now I've taken the emotion out of it and am just putting in the £100 on each loan that I think is worth it and am pretty happy with it.
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