sd2
Member of DD Central
Posts: 621
Likes: 224
|
Post by sd2 on May 15, 2019 11:57:38 GMT
I do have to much money in AC at the moment a product of all there offers.
Presently I am putting my money in the thirty day account then transferring one third every 10 days to the quick access AND back again. The aim is never to have to wait more than 10 days to remove money. Also I have a small amount in QAA for quick removal and to invest in the MLA. All MLA loans I invest in have 5 months or less left to run. Some have high interest because they are running late etc. Return on MLA (assuming no defaults) is 8.6%
I just can't think of any other way of reducing risk?
Anyone else think of one.
The aim of course is to be able to get money out quick AND to get the best interest rate I can get.
I will remove the amount I put in to get the 1% deal that ends October in my non isa. I may do the same (part a least) in the isa account.
Scary having (proportionaly) such high amount in one platform.
|
|
SteveT
Member of DD Central
Posts: 6,875 
Likes: 7,924
|
Post by SteveT on May 15, 2019 12:08:23 GMT
Scary having (proportionaly) such high amount in one platform. So why do it? Never put money into P2P that you cannot afford to lose entirely (or at least, lose access to for some years ...)
|
|
lara
Posts: 345
Likes: 300
|
Post by lara on May 15, 2019 12:38:19 GMT
I've said this before. Those bonus rates are great if they coincide with an existing investment plan but it's not wise to let the lure of an extra 1 or 2% take you all the way out of your comfort zone.
Why not stick with the access accounts, they are definitely less risky than the MLA or better still, reduce your exposure to the platform to a level with which you are comfortable.
|
|
|
|
Post by Ace on May 15, 2019 13:02:09 GMT
I do have to much money in AC at the moment a product of all there offers. Presently I am putting my money in the thirty day account then transferring one third every 10 days to the quick access AND back again. The aim is never to have to wait more than 10 days to remove money. Also I have a small amount in QAA for quick removal and to invest in the MLA. All MLA loans I invest in have 5 months or less left to run. Some have high interest because they are running late etc. Return on MLA (assuming no defaults) is 8.6% I just can't think of any other way of reducing risk? Anyone else think of one. The aim of course is to be able to get money out quick AND to get the best interest rate I can get. I will remove the amount I put in to get the 1% deal that ends October in my non isa. I may do the same (part a least) in the isa account. Scary having (proportionaly) such high amount in one platform. I'm definitely no expert, but I think your desire for liquidity may be running contra to your perceived risk reduction strategy. The risky period for development loans is normally considered to be towards the end of the loan period. Various delays, overruns and unexpected costs become apparent towards the end of a loan when the developer runs short of cash. Many lenders use a risk reduction strategy of exiting all loans when they only have a few months from the end so that they are not exposed to this risky period. You say that "Some have high interest because they are running late". The reason for the higher interest will be a higher risk. Again, this runs contra to your desire for risk reduction. Loans running late will also likely decrease your desired liquidity.
|
|
lobster
Member of DD Central
Posts: 636
Likes: 467
|
Post by lobster on May 15, 2019 14:51:34 GMT
I do have to much money in AC at the moment ........ ........Scary having (proportionaly) such high amount in one platform. Only a year ago I would have been warning you against over-exposure to a single platform, but over the last 12 months I have in fact adopted a similar strategy to yourself !? Personally I think that AC have by far the best offering among the larger platforms in terms of risk-reward and loan management. And no , I don't work for them  . Having said that, there is no doubt that interest rates available for lenders have fallen away significantly over the last couple of years. I used to have sizeable exposure to both Lendy and Fundingsecure , and feel that I was lucky in both cases getting out without losses. There are plenty of smaller outfits to choose from of course, many of which are favoured on these boards,but I can't help feeling that their limited size results in a greater platform risk. Regarding your exposure to the Access accounts, I personally limit exposure to the 30 and 90 day accounts, because if there is ever a sudden rush for the exit, I'm concerned about having my funds "trapped". In fairness though, there is a provision fund for these accounts, but not sure how useful this would be if there were ever a stampede out of the Access accounts.
|
|
sd2
Member of DD Central
Posts: 621
Likes: 224
|
Post by sd2 on May 15, 2019 15:52:08 GMT
I do have to much money in AC at the moment a product of all there offers. Presently I am putting my money in the thirty day account then transferring one third every 10 days to the quick access AND back again. The aim is never to have to wait more than 10 days to remove money. Also I have a small amount in QAA for quick removal and to invest in the MLA. All MLA loans I invest in have 5 months or less left to run. Some have high interest because they are running late etc. Return on MLA (assuming no defaults) is 8.6% I just can't think of any other way of reducing risk? Anyone else think of one. The aim of course is to be able to get money out quick AND to get the best interest rate I can get. I will remove the amount I put in to get the 1% deal that ends October in my non isa. I may do the same (part a least) in the isa account. Scary having (proportionaly) such high amount in one platform. I'm definitely no expert, but I think your desire for liquidity may be running contra to your perceived risk reduction strategy. The risky period for development loans is normally considered to be towards the end of the loan period. Various delays, overruns and unexpected costs become apparent towards the end of a loan when the developer runs short of cash. Many lenders use a risk reduction strategy of exiting all loans when they only have a few months from the end so that they are not exposed to this risky period. You say that "Some have high interest because they are running late". The reason for the higher interest will be a higher risk. Again, this runs contra to your desire for risk reduction. Loans running late will also likely decrease your desired liquidity. Agreed on MLA but only 10% in there. I do look at why they are running late and importantly loan to values. Also residential and residential homes only..... Up to now.
|
|
zlb
Member of DD Central
Posts: 1,422
Likes: 333
|
Post by zlb on May 15, 2019 19:09:52 GMT
There were at least one or two threads on the access accounts here, with discussion on how they work in normal market conditions. If you search the AC thread you should be able to find.
I don't remember reading that money sitting in the QAA would be given priority over any others in a run to withdraw from AC. It's a concern of mine too, but I don't have a cycle of notice on my 30DAA because I'm not sure that would make any difference...
The access accounts have a distinct provision fund from other investment portals on AC, I understand.
|
|
|
|
Post by df on May 15, 2019 20:48:53 GMT
I'm definitely no expert, but I think your desire for liquidity may be running contra to your perceived risk reduction strategy. The risky period for development loans is normally considered to be towards the end of the loan period. Various delays, overruns and unexpected costs become apparent towards the end of a loan when the developer runs short of cash. Many lenders use a risk reduction strategy of exiting all loans when they only have a few months from the end so that they are not exposed to this risky period. You say that "Some have high interest because they are running late". The reason for the higher interest will be a higher risk. Again, this runs contra to your desire for risk reduction. Loans running late will also likely decrease your desired liquidity. Agreed on MLA but only 10% in there. I do look at why they are running late and importantly loan to values. Also residential and residential homes only..... Up to now. There are many examples when stated LTV become redundant when the loans stop performing. I'm not aware of any AC loan that was declared as a crystallised loss, but when it comes to it your return is not likely to be what you expect. I wouldn't recommend chasing 9%+ range, most of them are very old and risky. 58% of my 9%+ in MLA are suspended and a fair proportion of these have very slim chance of successful outcome. Your projected 8.6% return might turn out to be lower than QAA and with significant cash drag (funds locked for a very long time).
|
|
|
|
Post by df on May 15, 2019 20:56:14 GMT
There were at least one or two threads on the access accounts here, with discussion on how they work in normal market conditions. If you search the AC thread you should be able to find. I don't remember reading that money sitting in the QAA would be given priority over any others in a run to withdraw from AC. It's a concern of mine too, but I don't have a cycle of notice on my 30DAA because I'm not sure that would make any difference... The access accounts have a distinct provision fund from other investment portals on AC, I understand. Yes, every account (except MLA doesn't have one) have their own PFs and access accounts' PFs work differently from other accounts (GBBA/PSA/GEA).
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on May 15, 2019 21:11:10 GMT
Why not stick with the access accounts, they are definitely less risky than the MLA I would definitely disagree with that. This has been discussed at length before, but in summary investing in a black box account gives you no control over what loans you actually invest in - in fact you will be allocated holdings in late/distressed/'defaulted' loans. It's all great while it works but if/when it ever doesn't it will not be pretty and having holdings in the MLA will be a much better place to be.
|
|
. Having said that, there is no doubt that interest rates available for lenders have fallen away significantly over the last couple of years. I used to have sizeable exposure to both Lendy and Fundingsecure , and feel that I was lucky in both cases getting out without losses. There are plenty of smaller outfits to choose from of course, many of which are favoured on these boards,but I can't help feeling that their limited size results in a greater platform risk.