dead-money
Rocket to the Moon
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Post by dead-money on Dec 4, 2019 14:40:46 GMT
Assetz Capital Access Accounts 4.1% - 5.75% dependent on notice period; with their security, provision funds and liquidity even with suspended loans in the portfolio and no fees, ticks all the boxes for me. Earning less than 2% on bank savings products just doesn't seem worth it for anything beyond an emergency fund. P2P security is variable, provision funds are discretionary, and liquidity is fleeting. P2P platforms themselves might be a temporary phenomenon. As much as I'd love to earn 5.75% on the cash part of my portfolio, I still have ten times as much cash in FSCS savings accounts instead of P2P. Definitely worth it for me. Yep, we each have our own risk appetite. I don't view P2P as Cash or a cash equivalent. Within my net financial wealth Cash and P2P pots are roughly equally and combined are a quarter of the equity pot. So reducing volatility in global equities returns is my current objective.
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Post by df on Dec 4, 2019 15:19:22 GMT
I realise the thread title may be an oxymoron, but in the wake of L, COL & FS there seems to be a general shift towards the perceived "lower risk" end of the market. With that in mind, coupled with recent rate cuts at various P2P houses I compiled a list of what I see as the main lower risk players and their respective headline rates if you go for their highest term or longest access time hands-free black box auto accounts. All of them offer some form of provision fund (except OC who at least have skin in the game). A few notable exceptions I have omitted for various reasons: FC & Z (no PF and projected headline rates don't mean much...), LI & WA (neither are P2P), ABL & UB (higher risk, smaller scale). AC - 5.75% LW - 5.40% GS - 5.3% LP - 5% OC - 4% RS - 4% LB - 3.54% Group average: 4.715% All have their risks, nuances and conditions that come with the advertised rate which don't make them fully comparable. My question to the forum is, are you interested in any at these levels? Does the narrative of moving down the risk curve even make sense? I'm with AC/LW/GS and have postponed new investment for the time being. I was tempted to try the others but the rates seem too low for me. For example I can just pick up a tracker on the FTSE which has a dividend yield of 4-4.5%. Out of your list I'm active with AC, LW and GS. My average on RS is 6.1%, so I'm just withdrawing returns as they come. I've tried LB few years ago - stayed with it for just over a year in order to retain my bonus.. Any investment below 5% (and it has to have PF for that kind of rate) is not worth the risk for me. I'm active on UB, it worked well for me so far. Not disappointed with ABL, but keep it as a small part of my p2p portfolio. Most of my cash is in FSCS products - small return barely catching up with inflation, but my capital is preserved.
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iren
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Post by iren on Dec 4, 2019 17:17:13 GMT
For those who haven’t been around so long in P2P, it’s worth remembering that Wellesley & Co was once considered to be in this category of low risk P2P lenders. All loans secured on property, Wellesley taking a first stake in each loan that we were told would be used to cushion investor losses, and a provision fund in place, with near instant sales possible on a secondary market.
What happened? The secondary market was closed, no details are available regarding any first losses taken by Wellesley, the provision fund evaporated, and investors have been left with mounting losses and no way to exit the market. Most recently, Wellesley’s replacement method of accessing funds to refinance P2P investments (which they no longer offer), via mini bonds, may have been closed through new FCA rules (a ban on the marketing of mini bonds to retail investors, effective 1 January 2020).
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Dec 4, 2019 17:47:48 GMT
That is true, but lovers of high yielding stocks (not that I'm one) like them because a steady dividend keeps the share price generally high. There is one theory that the fair price of any share is the time-discounted value of all future dividends. I don't understand that. A steady dividend , or indeed any dividend, lowers the share price by the exact amount of the dividend. Yes, at the time of the dividend, but I used the word generally to mean that investors will value a share with a steady dividend more so its price will be higher.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Dec 4, 2019 17:51:42 GMT
What about lendinvest and crowdproperty? I have 7k between them and £500 worth of default on kuflink although still paying interest. Crowdproperty averages 8% interest! Lendinvest isn't P2P it's an AIF - no P2P permissions & no loss relief on bad loans as a result. And no ISA.
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aju
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Post by aju on Dec 5, 2019 12:00:17 GMT
I don't understand that. A steady dividend , or indeed any dividend, lowers the share price by the exact amount of the dividend. Yes, at the time of the dividend, but I used the word generally to mean that investors will value a share with a steady dividend more so its price will be higher. Not some though, BT is a case in point their divi is/was/is/was good but it's not really improving the share price - not that I'm that bothered as its a good income year on year - unless Mr McD get his way perhaps ... The last 2 divi years have been steadily the same (almost).
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hazellend
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Post by hazellend on Dec 5, 2019 12:08:09 GMT
In my personal opinion there is no low risk P2P.
The range is high to very high
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mrk
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Post by mrk on Dec 5, 2019 12:20:15 GMT
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Post by gravitykillz on Dec 5, 2019 12:25:15 GMT
Maybe time to slowly exit p2p and invest in gold bars and some rolex watches.
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Monetus
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Post by Monetus on Dec 5, 2019 12:27:02 GMT
I'm not sure the words "low risk" and "P2P" go hand-in-hand anymore...
If/when there's a downturn even the "safest" places will be highly vulnerable.
Fixed saving accounts with rates of 2.37% and FSCS protection seem appealing.
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IFISAcava
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Post by IFISAcava on Dec 5, 2019 12:27:03 GMT
Maybe time to slowly exit p2p and invest in gold bars and some rolex watches. or rapidly?
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m2btj
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Post by m2btj on Dec 5, 2019 12:46:16 GMT
Returns were at the lower end of P2P around 3% but not a single default in almost six years! Impressive performance from a well run company.
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m2btj
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Post by m2btj on Dec 5, 2019 12:49:56 GMT
Maybe time to slowly exit p2p and invest in gold bars and some rolex watches. A walk down Hatton Garden or a browse of Watchfinder dispels the myth that Rolex are investment pieces. Very few models appreciate in value & those that do are quite rare finds.
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macq
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Post by macq on Dec 5, 2019 13:03:26 GMT
Returns were at the lower end of P2P around 3% but not a single default in almost six years! Impressive performance from a well run company. that's the rub really in that a well run product with no loss does not attract enough retail money as the rate was not high but appeals to institutional money who have maybe analysed the return in a different way to Joe public
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agent69
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Post by agent69 on Dec 5, 2019 13:07:15 GMT
For those who haven’t been around so long in P2P, it’s worth remembering that Wellesley & Co was once considered to be in this category of low risk P2P lenders. All loans secured on property, Wellesley taking a first stake in each loan that we were told would be used to cushion investor losses, and a provision fund in place, with near instant sales possible on a secondary market. What happened? The secondary market was closed, no details are available regarding any first losses taken by Wellesley, the provision fund evaporated, and investors have been left with mounting losses and no way to exit the market. Most recently, Wellesley’s replacement method of accessing funds to refinance P2P investments (which they no longer offer), via mini bonds, may have been closed through new FCA rules (a ban on the marketing of mini bonds to retail investors, effective 1 January 2020). When I first started investing the main risk appeared to be dodgy borrowers. This then moved onto the risk of platform failure, but now the biggest concern appears to be whether the platform has been telling porkies regarding how they opperate and what they are doing with your money.
Overall any form of P2P investment is not for the faint hearted.
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