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Post by Ace on May 26, 2019 9:13:08 GMT
I ask because although I have not achieved 7% I am currently on 6% annualised interest and 8% loans unsellable. That will still, probably, result in a much higher ( tho lower than estimated) return over the five year cycle. The unsellable loans will default. You need to subtract the unsellable amount from your net earnings to understand your current position. You will also get back about 50% of defaults eventually but it's a slow process. Not all of the unsellable loans default. Some of the Processing and Late loans do return to Live status, and become sellable in the next cycle.
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p2pete
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Post by p2pete on May 26, 2019 11:13:50 GMT
Not all of the unsellable loans default. Some of the Processing and Late loans do return to Live status, and become sellable in the next cycle. And some of the sellable loans will become unsellable during the 50 day queueing time. I'm just trying to warn people that the annualised return shown on the summary page is inaccurate and you need to factor in unsellable loans and queueing times.
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Post by Ace on May 26, 2019 13:48:16 GMT
Not all of the unsellable loans default. Some of the Processing and Late loans do return to Live status, and become sellable in the next cycle. And some of the sellable loans will become unsellable during the 50 day queueing time. I'm just trying to warn people that the annualised return shown on the summary page is inaccurate and you need to factor in unsellable loans and queueing times. No argument from me there, I agree with you. I'm currently trying to sell out from 3 FC accounts, all were invested in balanced for a little over one year. One has been through one complete selling cycle and looks like it will end up with a small loss. Too early to say on the other two as they're still on their first selling cycle. One account that is 46 days into it's its first selling cycle now has only 313 of 434 loans still for sale. Though just over 7% of the fund has been returned through interest and capital repayments since the selling cycle started. The other account, that is also 46 days into its first selling cycle, now has 313 of 496 loans still for sale. Roughly 5% of this fund's total has been returned through interest and capital repayments since the selling cycle started.
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p2pete
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Post by p2pete on May 27, 2019 13:10:10 GMT
Where a Discretionary P2P platform advertises a target rate that it is trying to achieve within certain risk parameters, the P2P platform needs to understand not just individual loans, but also how the portfolio of loans that is allocated to an individual investor behaves as whole. Otherwise, it has no assurance that the advertised target rate of returns and risk parameters can be reasonably achieved for that investor. Investors will suffer harm if platforms cannot, within a reasonable degree of confidence, deliver in practice the returns advertised to investors when they made their initial decision to invest. So FC don't meet the FCA definition of passive investing. Passive platforms like AC Access Accounts, RS and LW simply pay the advertised rates under normal conditions. The returns at FC appear to be luck based, as the platform does not seem to have the functionality to allocate loans in such a way to bring each individual investor closer to the average. They are just taking an average of all loans and quoting that as the expected return. In my opinion it's been caused by switching from a fully manual platform to a fully passive platform without actually rewriting anything to meet the FCA's requirements. This is an exceptionally good point. After the PPI claims deadline passes, those firms chasing PPI payments for people will need to find alternatives, and I imagine P2P is a prime target. I have already heard radio adverts from them saying if you were sold any investment by banks and it went down in value (even if you were warned, as they have been very careful to do for many years), you could claim compensation. It seems highly dubious, and I sincerely hope the banks won't roll over and cough up like they did with PPI, but I do believe the case against some P2P platforms is considerably stronger. I, for example, was told 7.5% by FC for the black-box hands-off approach and shown graphs of how almost everyone is within a couple of percent of that, and yet I have achieved 0.4%. I need hardly say that is not reasonable. And, yes, precisely, their explanation of why this has happened to me equates very closely to "it was a gamble over whose outcome you had no control".
PS I got the quote from here: www.fca.org.uk/publications/consultation-papers/cp18-20-loan-based-peer-peer-and-investment-based-crowdfunding-platforms-feedback-our-postSo it's a proposed change rather than current policy, although the policy statement is due this quarter.
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