ashtondav
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Post by ashtondav on Apr 15, 2019 10:16:08 GMT
With rates as they are why would I want to choose the PSA account rather than the 90DAA?
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bg
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Post by bg on Apr 15, 2019 11:06:23 GMT
With rates as they are why would I want to choose the PSA account rather than the 90DAA? I wouldn't necessarily invest in wither, but two reasons:- 1. In the PSA you don't have to wait 90 days to get your money back...provided you can sell your loans 2. In the PSA you won't be allocated any distressed/suspended loans or I believe any development loans
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dc848
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Post by dc848 on Apr 15, 2019 11:10:22 GMT
3. 5.75% Introductory Target Capped Rate* - Only guaranteed until 31/5/19.
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cb25
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Post by cb25 on Apr 15, 2019 11:27:58 GMT
With rates as they are why would I want to choose the PSA account rather than the 90DAA? I wouldn't necessarily invest in wither, but two reasons:- 1. In the PSA you don't have to wait 90 days to get your money back...provided you can sell your loans 2. In the PSA you won't be allocated any distressed/suspended loans or I believe any development loansMy PSA a/c includes (for example) loans 578 and 691, both of which look like development loans.
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bg
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Post by bg on Apr 15, 2019 11:32:21 GMT
I wouldn't necessarily invest in wither, but two reasons:- 1. In the PSA you don't have to wait 90 days to get your money back...provided you can sell your loans 2. In the PSA you won't be allocated any distressed/suspended loans or I believe any development loansMy PSA a/c includes (for example) loans 578 and 691, both of which look like development loans. Oh didn't know that, have never invested in it. I guess they classify them as construction businesses and the security is the property itself.
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sl75
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Post by sl75 on Apr 15, 2019 12:26:39 GMT
2. In the PSA you won't be allocated any distressed/suspended loans or I believe any development loans Whilst that's true on day 1, over the longer term this doesn't remain true.
From what I can gather (I'm not invested in it either), in the PSA you're directly exposed to the recovery time of any loans that become distressed/suspended after you invested, so over an extended period of holding will almost certainly have a portion of the balance that cannot be liquidated, whereas in 90DAA you always (in "normal market conditions") expect to be able to fully liquidate in 90 days regardless of any suspensions.
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bg
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Post by bg on Apr 15, 2019 12:35:41 GMT
2. In the PSA you won't be allocated any distressed/suspended loans or I believe any development loans Whilst that's true on day 1, over the longer term this doesn't remain true. Unfortunately there is no investment anywhere in the world that is 100% guaranteed not to have a future issue/loss somewhere down the line. The PSA however will not invest in any loan that is already distressed.
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Post by Ace on Apr 15, 2019 13:02:07 GMT
Whilst that's true on day 1, over the longer term this doesn't remain true. Unfortunately there is no investment anywhere in the world that is 100% guaranteed not to have a future issue/loss somewhere down the line. The PSA however will not invest in any loan that is already distressed. You are correct. I attempted to liquidate my PSA accounts a while back and am still awaiting recovery on the unsaleable dregs, albeit a very small amount now.
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sl75
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Post by sl75 on Apr 15, 2019 14:17:20 GMT
Whilst that's true on day 1, over the longer term this doesn't remain true. Unfortunately there is no investment anywhere in the world that is 100% guaranteed not to have a future issue/loss somewhere down the line. The PSA however will not invest in any loan that is already distressed. ... which is a disadvantage in normal market conditions, because it also means that you cannot fully exit the account (assuming you stayed invested long enough that at least one more loan became distressed).
It only becomes an advantage in abnormal market conditions where investors in the 90DAA also become exposed to the liquidity and/or losses of the underlying assets.
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Post by df on Apr 15, 2019 14:41:09 GMT
My PSA a/c includes (for example) loans 578 and 691, both of which look like development loans. Oh didn't know that, have never invested in it. I guess they classify them as construction businesses and the security is the property itself. I was under impression that all new AC loans are secured on property. Only some very old loans appear to have other types of security. Am I mistaken?
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bg
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Post by bg on Apr 15, 2019 14:45:33 GMT
Oh didn't know that, have never invested in it. I guess they classify them as construction businesses and the security is the property itself. I was under impression that all new AC loans are secured on property. Only some very old loans appear to have other types of security. Am I mistaken? No they are, I just thought the PSA only bought loans in traditional business loans that were backed by property....not that they also bought development loans which are somewhat further up the risk spectrum. As all new loans are backed by property it does raise the question why would anyone invest in the PSA @ 5.5% over the GBBA @ 6.25% given the pool of loans must be the same albeit the PSA's provision fund must be proportionally bigger. For the avoidance of doubt I do not invest in the PSA, GBBA or 90DAA.
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Post by df on Apr 15, 2019 15:16:17 GMT
I was under impression that all new AC loans are secured on property. Only some very old loans appear to have other types of security. Am I mistaken? No they are, I just thought the PSA only bought loans in traditional business loans that were backed by property....not that they also bought development loans which are somewhat further up the risk spectrum. As all new loans are backed by property it does raise the question why would anyone invest in the PSA @ 5.5% over the GBBA @ 6.25% given the pool of loans must be the same albeit the PSA's provision fund must be proportionally bigger. For the avoidance of doubt I do not invest in the PSA, GBBA or 90DAA. I took PSA for a test drive with very little amount invested. Found it very much the same as GBBA - poor diversification and mostly the same loans. Sold it after a couple of months, except 3p that is stuck in 227.
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sl75
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Post by sl75 on Apr 15, 2019 15:23:50 GMT
As all new loans are backed by property it does raise the question why would anyone invest in the PSA @ 5.5% over the GBBA @ 6.25% given the pool of loans must be the same albeit the PSA's provision fund must be proportionally bigger. The available pool of loans is different...
I took PSA for a test drive with very little amount invested. Found it very much the same as GBBA - poor diversification and mostly the same loans. Sold it after a couple of months, except 3p that is stuck in 227. See links above - for the diversification mechanism to work properly, it says you need to invest at least £500. Perhaps your "test drive" of these accounts was with an amount less than this, and thus not indicative of how it's supposed to work?
NB I don't personally have an investment in either of these accounts... but I know someone who did (and who is now attempting to liquidate them in order to invest the proceeds in 90DAA)
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Post by df on Apr 15, 2019 20:31:16 GMT
As all new loans are backed by property it does raise the question why would anyone invest in the PSA @ 5.5% over the GBBA @ 6.25% given the pool of loans must be the same albeit the PSA's provision fund must be proportionally bigger. The available pool of loans is different...
I took PSA for a test drive with very little amount invested. Found it very much the same as GBBA - poor diversification and mostly the same loans. Sold it after a couple of months, except 3p that is stuck in 227. See links above - for the diversification mechanism to work properly, it says you need to invest at least £500. Perhaps your "test drive" of these accounts was with an amount less than this, and thus not indicative of how it's supposed to work?
NB I don't personally have an investment in either of these accounts... but I know someone who did (and who is now attempting to liquidate them in order to invest the proceeds in 90DAA) Yes, I invested £300 or £400 (can't remember exactly, it was a while ago when PSA just launched). It makes perfect sense to liquidate these accounts and reinvest in access. I wish I've done it much earlier, I'm too slow making radical decisions. Currently 13% of my AC funds are stuck in GBBA&GEA. Not a great position to be in.
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