bigfoot12
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Post by bigfoot12 on Dec 3, 2018 18:11:29 GMT
not combative question - what will push interest rates up in banks etc? thanks Historically politicians have raised short term interest rates to defend the pound (think Black Wednesday). If there is Brexit with no deal many would expect a sharp downward move in the pound. We haven't really had this situation with the independent Bank of England in charge of rates so it is less clear what will happen. I imagine they will do nothing initially, and might even cut rates if there is stress in the financial system, but if inflation starts to rise they might have to raise rates, unless the chancellor tells them not to (by changing their target - BoE has operational independence). Longer rates might increase because people lose confidence in gilts, particularly if inflation looks likely. There won't be lending on P2P platforms at 3.1% if five year gilts are available at anything close.
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bigfoot12
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Post by bigfoot12 on Dec 3, 2018 18:15:40 GMT
But surely the currency markets have priced everything in already? They can't because nobody has much confidence what will happen. Exiting with no deal or a minimal deal is possible, as is a second referendum which surprises us with a vote to remain. (I'm not saying either is likely.) The market is probably pricing in some sort of average, but I suspect that the distribution isn't Normal.
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elliotn
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Post by elliotn on Dec 5, 2018 0:34:40 GMT
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Post by stevexxx on Dec 7, 2018 15:13:21 GMT
Whatever happens project fear will be exposed yet again for what it is. Politicians will always use extreme figures and worse case scenarios to try and get what they want, some will sit there and tell utter lies. Brexit is now a political football being used by the various parties. ..
I believe there will be little impact on p2p with the exception of property which might devalue especially in London which is good news for those wanting to get on the property ladder.. The stock market might be a little volatile but then I hold little there right now, however there might be good opportunities to make money on the markets if you know what your doing.. I continue to build on my p2p investments as I do believe they are best placed for long for steady growth and better than your average bank savings account paying just over 2%.
I have just opened a sipps which will give me 25% instant return the money I'm allowed to put in thanks to HMRC , there I can hold it in cash until after brexit or trickle it into investments, but then I want a little in a flexible pension fund and as a none tax payer that suits me to
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zlb
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Post by zlb on Dec 15, 2018 13:20:55 GMT
Will brexit rules prevent overseas buyers investing in rental property in London? I don't see why. The birth rate in the UK isn't being controlled. People will still need to have a home. De-centralisation away from London will take a while to occur, if at all.
Are there any reports on which sectors of society (not quantities) will leave the southeast?
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Post by lotus_eater on Dec 17, 2018 11:29:46 GMT
Whatever happens project fear will be exposed yet again for what it is. Politicians will always use extreme figures and worse case scenarios to try and get what they want, some will sit there and tell utter lies. Brexit is now a political football being used by the various parties. .. I believe there will be little impact on p2p with the exception of property which might devalue especially in London which is good news for those wanting to get on the property ladder.. The stock market might be a little volatile but then I hold little there right now, however there might be good opportunities to make money on the markets if you know what your doing.. I continue to build on my p2p investments as I do believe they are best placed for long for steady growth and better than your average bank savings account paying just over 2%. I have just opened a sipps which will give me 25% instant return the money I'm allowed to put in thanks to HMRC , there I can hold it in cash until after brexit or trickle it into investments, but then I want a little in a flexible pension fund and as a none tax payer that suits me to I tend to agree with you on this Steve. If we look at the attached GDP chart, and consider the UK joined the EU in 1973, it really does appear that the EU did nothing favorable for the UK at all in the long term as far as growth. Why would leaving not put it back on the uptrend? There'll be some volatility in everything I'm sure, especially if it's a "no deal" Brexit, but I believe the UK has some of the best business entrepreneurs in the world running businesses there, and they will see this as opportunity to expand business and start new, unrestricted partnerships with other countries and economies, as opposed to finding it restricting. And they'll likely need financing from P2P to do that. The EU is all about un-elected government control, not growing economies and businesses, as we can see by most of the other EU economies, including, but not limited to P.I.G.S. 
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Post by Financial Thing on Dec 19, 2018 14:46:35 GMT
Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.”
I've spoken with the heads of some p2p companies who argue that Brexit will be beneficial to many p2p companies. If you have faith that p2p is a sector that will survive and flourish long-term then why panic sell? I have some friends who panicked during the 2008 stock market crash and sold their stock portfolios near bottom. They said it was one of the worst financial decisions of their lives. Financial markets have short memories. Once the Brexit situation is settled, and it will be eventually, those who stayed the course may well be the ones who benefit the most.
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r00lish67
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Post by r00lish67 on Dec 19, 2018 15:14:33 GMT
Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.” I've spoken with the heads of some p2p companies who argue that Brexit will be beneficial to many p2p companies. If you have faith that p2p is a sector that will survive and flourish long-term then why panic sell? I have some friends who panicked during the 2008 stock market crash and sold their stock portfolios near bottom. They said it was one of the worst financial decisions of their lives. Financial markets have short memories. Once the Brexit situation is settled, and it will be eventually, those who stayed the course may well be the ones who benefit the most. In my view, you're comparing apples and pears. I agree that selling equities when they're cheap is a very poor idea as they have historically reverted to the mean and subsequently outperformed. But P2P isn't equity, it's debt. Any event that worsens the general economic climate will make defaults of SME's or individuals more likely. Likewise, it will also reduce the potential recoveries. The value and saleability of property assets supporting those loans would also be impacted. Further, the nature of some 'easy access' P2P products (not naming names) makes them extremely susceptible to runs, so we could also see a rather sharp, painful realisation amongst investors that their short term investment is rather more long than they had hoped for. In tandem with the above, unlike when equities go 'on sale' we don't have any significant risk premium on offer - the rates are more or less the same as a few months ago. I've withdrawn probably 30% P2P in the last month or two. I really don't want to indulge Theresa May by selling the rest of my holdings (which have various sorts of tie-in) but I'll certainly consider it if this nonsense continues. Another difference - if Brexit all gets settled etc, one can buy back in to P2P very easily at the same rates. You'll have missed maybe a month or two of returns, but not a huge equity style upswing.
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Post by Deleted on Dec 19, 2018 15:42:55 GMT
Timing, I would think that that ship has long sailed. The time to get out of Sterling was at least 2016 (well 1945 would have been best but not everyone was alive).
My own view is buckle in this is going to be a lumpy ride.
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Post by Financial Thing on Dec 19, 2018 19:07:13 GMT
Agreed about the apples to pears but my point was directed towards the mindset of panic selling in the event of believing a sector would be ok long-term. Granted a Brexit resolution will occur but do we really know when? If it takes a long time for the Brexit issue to be settled and one were (able) to sell 100% of their p2p holdings, one could be sitting in cash for several months with minimal returns. There is an opportunity cost of trying to time such events. Some experts recommended sitting out of the stock market and sitting in cash back in 2012.
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Post by vaelin on Dec 19, 2018 19:44:07 GMT
If we look at the attached GDP chart, and consider the UK joined the EU in 1973, it really does appear that the EU did nothing favorable for the UK at all in the long term as far as growth. Why would leaving not put it back on the uptrend? This is entirely specious reasoning. It assumes that: a) correlation implies causation (it doesn't) and; b) leaving the EU will result in the same economic conditions of the 50s, 60s and early 70s (it won't). Two of the 5 most productive economies in the world are in the EU: Luxembourg and Denmark. Using your logic, that means that EU membership results in productive economies. In reality, cherrypicking examples to suit your narrative is not the basis of sound reasoning (again, correlation does not imply causation).
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Post by mrclondon on Dec 19, 2018 21:01:27 GMT
Part of the problem here is trying to separate what will be short term effects of which ever leave/brino/remain outcome eventually happens that will be largely irrelevant within 2 to 3 years, from the longer term effects. (For clarity in this post leave means leave, brino means May's deal, remain means status quo).
The winners and losers from each outcome vary, and as I've posted in other threads, the biggest concern of SME manufacturing and trading businesses is the exchange rate, and the fear that it will be driven back up to the cripplingly high rates seen before the 2016 referendum. There needs to be some care taken in not being overly influenced by the media reporting on brexit and exchange rates, which tends to focus on importers and the cost of holidays abroad for UK citizens, rather than manufacturing industries which are the value add part of any economy.
That is not to downplay the inevitable loss of jobs in the car industry (and other similiar multinational supply chain focussed businesses) under a leave scenario. My citroen was assembled in Algeria from a kit of bits largely sourced from France. My view of geo-politics differs from those of the majority of northern europeans and I make no apology for it. The migration crisis from africa that is creating major problems for the southern european countries is one bourne out of an utter lack of hope for most africans. Aid is not the answer per se, IMO western countries should be supporting the creation of real sustainable employment in africa ... just as PSA Group are doing (The downside for now is quality - my algerian Citroen is of a much lower build quality than the last of my Rovers ! )
There are plenty of high tech or high quality manufacturing (and related service) opportunities available which will thrive with encouragement and appropriate free trade deals. The issue that many such companies face in a Europe centric framework is German quality and productivity is higher than the UK, and we struggle to compete against them in European markets particularly when sterling is overvalued. I appreciate this is a very simplistic and narrow view, but wealth creation is the cornerstone of any economy be it through manufacturing, or value add services. Importing iphones is not wealth creation.
What I have described are longer term changes to the UK economy, that will take years (decades) to happen. p2p loans are short term and our borrowers will be more influenced by short term effects , project fear mark 3 and mark 4 etc. than longer term issues. Well planned projects that made sense yesterday will still make sense tomorrow irrespective of the brexit scenario. However poorly conceived projects that never really made sense yesterday, are likely to make even less sense tomorrow with another layer of brexit uncertainty thrown in making recovery of a failed project more of a gamble.
One final thought, a leave scenario is more likely to induce another 2008 style freezing of credit by the major banks, making the role of p2p investors in continuing to support the UK economy with credit all the more important.
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ceejay
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Post by ceejay on Dec 19, 2018 22:35:41 GMT
Agreed about the apples to pears but my point was directed towards the mindset of panic selling in the event of believing a sector would be ok long-term. Granted a Brexit resolution will occur but do we really know when? If it takes a long time for the Brexit issue to be settled and one were (able) to sell 100% of their p2p holdings, one could be sitting in cash for several months with minimal returns. There is an opportunity cost of trying to time such events. Some experts recommended sitting out of the stock market and sitting in cash back in 2012. Having agreed about the apples and pears comparison, you've ended up doing it again!
We should be looking at all times at risk and reward and their relative size in any scenario.
When there is turmoil in the economy there can be wild swings in the stock market, both up and down. In that same turmoil, your P2P investments can either crash downwards - or give their nice planned return of 5% or 10% or whatever.
I am seriously considering reducing my P2P holdings - not pulling out altogether - because there is no potential upside to balance the risk of significant losses. And, without wishing to appear selfish, its not my role to take risks with my future to support others' businesses (if I wanted to play that game, I'd be looking at an equity stake so I could be rewarded if things went well).
The opportunity cost is frankly trivial, IMHO.
OTOH, I am slightly increasing my net investment into S&S - I can afford to take a long view on these and am reasonably comfortable that in the long run any losses will come good, and I'm not dumb enough to think that I can beat the market by timing. As opposed to a P2P loss which, once it's gone, is gone for ever.
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Godanubis
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Post by Godanubis on Dec 19, 2018 23:43:09 GMT
Long term S&S still only averaging half at least well managed P2P and the 45% losses this week in some companies could take decades to recoup.
We would all be millionaires if we had a clue about what will be a good investment. Just look a cryptocurrency. I used to go to the casino and play until I made enough to buy lunch then stop. I never lost money or went hungry.
The secret is is always go for investments that can be managed or conform to strict statistical rules.
Then you only use profit to invest in slightly less structured but higher returning investments.
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macq
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Post by macq on Dec 20, 2018 11:27:54 GMT
Have a foot in both camps so not picking one over the other.But even with the downturn this year and not cherry picking some of the best performing funds you would have annualised returns of about 14% over 3 years and 12% over 10 years with a standard global tracker so not quite sure you can say S&S only averaging half at least as well as P2P(but that could change obviously) But more importantly if you covered your losing bets in the casino till you had enough for lunch i guess you were not buying a Greggs meal deal  |
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