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Post by p2pgirl on Jan 11, 2019 9:19:42 GMT
I've been dipping my toe into WeLendUs for just over a month now and really like what I see. I'm going to continue to drip feed money in, but this starts to raise the question of what are the best settings for each investment and what size should I break the individual investment chunks up into.
At the moment I've been drip feeding in £100 chunks and investing each chunk individually. What are the merits of combining the chunks together in my WLU portfolio? Is it just for ease of management?
The other side is how to set the auto-diversify maximum rate. At the moment, I have this set to 10% - so effectively I'm investing in £10 chunks. The original thinking was to get maximum diversification. However, with the 100% PF coverage, I'm wondering whether there is any real benefit in being this diversified and whether I'm actually being inefficient (Am I losing interest in rounding on the smaller chunks?)
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Post by Ace on Jan 11, 2019 10:40:35 GMT
I've been dipping my toe into WeLendUs for just over a month now and really like what I see. I'm going to continue to drip feed money in, but this starts to raise the question of what are the best settings for each investment and what size should I break the individual investment chunks up into.
At the moment I've been drip feeding in £100 chunks and investing each chunk individually. What are the merits of combining the chunks together in my WLU portfolio? Is it just for ease of management? I don't think that there's a definitive answer as to what the best size for an investment is. One of the advantages of smaller chunks is that you can experiment with different interest ranges (at least that's what I'm doing). As you say, the benefit of larger chunks is that they're easier to manage. For info, here are the returns reported by Welendus for my investments that have been running since August 2018 (note that these won't include the PF Bonus payments that compensate for the interest lost on PF purchases). The PF purchase delay is now set to 35 days for all, but was 14 days until December. Range 10 to 15%, return 4.7%, Range 11 to 15%, return 7.8%,
Range 12 to 15%, return 7.8%,
Range 13 to 15%, return 8.3%,
Range 14 to 15%, return 8.9%. The XIRR for these investments combined is currently 11.57%. The other side is how to set the auto-diversify maximum rate. At the moment, I have this set to 10% - so effectively I'm investing in £10 chunks. The original thinking was to get maximum diversification. However, with the 100% PF coverage, I'm wondering whether there is any real benefit in being this diversified and whether I'm actually being inefficient (Am I losing interest in rounding on the smaller chunks?)I agree that the diversification setting shouldn't make much difference while the PF Bonuses are still being paid. However I've set all of mine to maximum diversification in case the Bonuses stop being paid. I suspect that cash drag could be minimised for a given interest range by setting to minimum diversification. There isn't quite 100% PF coverage as there is a short period between PF purchase date and the PF Bonus payment where the opportunity cost of the PF Bonus payment is lost. I.e. If the PF Bonus was paid at the point of PF purchase then there would be 100% PF coverage. (I know, this is small and I'm being picky). I doubt that there's much, if any, loss due to interest truncation of fractions of pennies, but who's being picky now 😉.
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benaj
Member of DD Central
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Post by benaj on Jan 11, 2019 15:14:27 GMT
I've been dipping my toe into WeLendUs for just over a month now and really like what I see. I'm going to continue to drip feed money in, but this starts to raise the question of what are the best settings for each investment and what size should I break the individual investment chunks up into.
At the moment I've been drip feeding in £100 chunks and investing each chunk individually. What are the merits of combining the chunks together in my WLU portfolio? Is it just for ease of management? I don't think that there's a definitive answer as to what the best size for an investment is. One of the advantages of smaller chunks is that you can experiment with different interest ranges (at least that's what I'm doing). As you say, the benefit of larger chunks is that they're easier to manage. For info, here are the returns reported by Welendus for my investments that have been running since August 2018 (note that these won't include the PF Bonus payments that compensate for the interest lost on PF purchases). The PF purchase delay is now set to 35 days for all, but was 14 days until December. Range 10 to 15%, return 4.7%, Range 11 to 15%, return 7.8%,
Range 12 to 15%, return 7.8%,
Range 13 to 15%, return 8.3%,
Range 14 to 15%, return 8.9%. The XIRR for these investments combined is currently 11.57%. The other side is how to set the auto-diversify maximum rate. At the moment, I have this set to 10% - so effectively I'm investing in £10 chunks. The original thinking was to get maximum diversification. However, with the 100% PF coverage, I'm wondering whether there is any real benefit in being this diversified and whether I'm actually being inefficient (Am I losing interest in rounding on the smaller chunks?)I agree that the diversification setting shouldn't make much difference while the PF Bonuses are still being paid. However I've set all of mine to maximum diversification in case the Bonuses stop being paid. I suspect that cash drag could be minimised for a given interest range by setting to minimum diversification. There isn't quite 100% PF coverage as there is a short period between PF purchase date and the PF Bonus payment where the opportunity cost of the PF Bonus payment is lost. I.e. If the PF Bonus was paid at the point of PF purchase then there would be 100% PF coverage. (I know, this is small and I'm being picky). I doubt that there's much, if any, loss due to interest truncation of fractions of pennies, but who's being picky now 😉. Hi Ace , do you experienced any cash drag / unlent cash issue? I hardly see 100% being lent most of the time, more like 85% to 93%.
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Post by Ace on Jan 11, 2019 15:22:24 GMT
Hi Ace , do you experienced any cash drag / unlent cash issue? I hardly see 100% being lent most of the time, more like 85% to 93%. Hi benaj, no, not really. I did early on, but hardly any recently. The investments detailed above are currently 99.4% invested.
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Post by Ace on Jan 11, 2019 15:25:20 GMT
Hi Ace , do you experienced any cash drag / unlent cash issue? I hardly see 100% being lent most of the time, more like 85% to 93%. Hi benaj , no, not really. I did early on, but hardly any recently. The investments detailed above are currently 99.4% invested. I also have an ISA account that's only a month old with similar settings that is 98.9% invested.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jan 11, 2019 16:05:57 GMT
Hi Ace , do you experienced any cash drag / unlent cash issue? I hardly see 100% being lent most of the time, more like 85% to 93%. Hi benaj , no, not really. I did early on, but hardly any recently. The investments detailed above are currently 99.4% invested. 4 investments, 12-15% range, currently 99.99% invested.
Had a bit of drag for a couple of days after NY but looking at my activity log very rare Im not largely fully invested within 24hrs.
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Ukmikk
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Post by Ukmikk on Jan 11, 2019 16:16:57 GMT
Low cash drag comes with low diversity. Multiple investments with the same or overlapping ranges means multiple investments in the same loans. With the PF operating as it does currently you may not regard this as an issue, currently.
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michaelc
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Post by michaelc on Jan 14, 2019 14:46:52 GMT
Low cash drag comes with low diversity. Multiple investments with the same or overlapping ranges means multiple investments in the same loans. With the PF operating as it does currently you may not regard this as an issue, currently. Is that definitely the case? I'm not doubting you - I'm still learning about the platform.
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Post by Ace on Jan 14, 2019 17:26:24 GMT
Low cash drag comes with low diversity. Multiple investments with the same or overlapping ranges means multiple investments in the same loans. With the PF operating as it does currently you may not regard this as an issue, currently. Is that definitely the case? I'm not doubting you - I'm still learning about the platform. Yep, I've got loads of them.
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Post by df on Jan 14, 2019 21:44:19 GMT
I've been dipping my toe into WeLendUs for just over a month now and really like what I see. I'm going to continue to drip feed money in, but this starts to raise the question of what are the best settings for each investment and what size should I break the individual investment chunks up into. At the moment I've been drip feeding in £100 chunks and investing each chunk individually. What are the merits of combining the chunks together in my WLU portfolio? Is it just for ease of management? The other side is how to set the auto-diversify maximum rate. At the moment, I have this set to 10% - so effectively I'm investing in £10 chunks. The original thinking was to get maximum diversification. However, with the 100% PF coverage, I'm wondering whether there is any real benefit in being this diversified and whether I'm actually being inefficient (Am I losing interest in rounding on the smaller chunks?) I'm drip feeding in £100 chunks. Within past 6 months (or more) everything gets invested in less than 24 hours. For new investments I set 10%-15% rate and maximum diversification. There is always a small cash drag combining pennies from various investments, but I keep those to tighter rate to deter them from being invested as some loans are too short for getting any return from a couple of quid. There is probably no need for scrupulous diversification for this model, but I still do it (not sure if it's OCD or just a habit). I don't think there is much difference if you diversify at 10% or 20%.
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benaj
Member of DD Central
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Post by benaj on Jan 14, 2019 22:26:35 GMT
I'm drip feeding in £100 chunks. Within past 6 months (or more) everything gets invested in less than 24 hours. For new investments I set 10%-15% rate and maximum diversification. There is always a small cash drag combining pennies from various investments, but I keep those to tighter rate to deter them from being invested as some loans are too short for getting any return from a couple of quid. There is probably no need for scrupulous diversification for this model, but I still do it (not sure if it's OCD or just a habit). I don't think there is much difference if you diversify at 10% or 20%. I haven't been lucky, there were a few occasions in the past 6 months new money did not get invested within 24 hours, but most of them does. There are usually cash drag from money bought by PF in my portfolio.
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Post by df on Jan 14, 2019 22:59:39 GMT
I'm drip feeding in £100 chunks. Within past 6 months (or more) everything gets invested in less than 24 hours. For new investments I set 10%-15% rate and maximum diversification. There is always a small cash drag combining pennies from various investments, but I keep those to tighter rate to deter them from being invested as some loans are too short for getting any return from a couple of quid. There is probably no need for scrupulous diversification for this model, but I still do it (not sure if it's OCD or just a habit). I don't think there is much difference if you diversify at 10% or 20%. I haven't been lucky, there were a few occasions in the past 6 months new money did not get invested within 24 hours, but most of them does. There are usually cash drag from money bought by PF in my portfolio. When I get notification e-mail (if it is £10 or above) I slide the rate door slightly to the left and it gets lent almost straight away. Could probably set everything at 11%-15%, forget about it and still receive approx the same returns.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Jan 15, 2019 0:44:22 GMT
Is that definitely the case? I'm not doubting you - I'm still learning about the platform. Yep, I've got loads of them. Even if you had the whole loan I would imagine it would be a tiny amount of your whole cross platform investments where there is no PF.  Good work on the statistics. As you are aware my main profit in P2P comes from thousands of tiny profits. The amount here however lost in lag time on re-investing bonus is too small to make even the tiniest of dents. The comfort of PF outweighs any minuscule decrease in overall profitability. My current investments stand at 99.8%. ISA will be top of my list in April. We don’t want to pay any of those nasty taxes now do we. Personally losses in 1 loan in other P2P platforms would easily absorb any interest here.
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