tonyr
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Post by tonyr on Feb 8, 2020 9:36:39 GMT
I've always been a manual investor in AC, and done quite well out of it. Even given the likely losses on H*House and D*Morgan I've probably made 10% a year for the last five years (and IIRC a bit before that - I've lost records).
I did origninally say that I'd get out when the liquidity dried up - for the early years there was so much new investment it wasn't an issue, Now the money is going into the QAA and other access accounts. Sometimes I feel I've already left it too late - I have favourite laons that have no availability, but when I do need to sell then not much goes, indeed it seems to prompt others into selling. I have 9% and 8.5% loans left, when these go I don't expect them to be replaced, and there is a lot at 8% that doesn't move - so I don't expect the liquidity to get any better.
I've not lost condidence in AC, but the QAA and friends aren't for me (rates too low).
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alanh
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Post by alanh on Feb 8, 2020 10:03:06 GMT
I haven't noticed any change in liquidity. I only invest in loans 7.5%+ and have had no problem selling these over the course of a few days. The higher rate ones go quicker than the lower rate ones. I prefer to put money in the 90DAA at 5.75% with a PF than invest in manual loans sub 7.5%.
Money invested in the access accounts still results in loans being purchased, so from a liquidity point of view it doesn't matter if investors are putting money into the access accounts or MLIA.
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tonyr
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Post by tonyr on Feb 8, 2020 10:10:45 GMT
Money invested in the access accounts still results in loans being purchased, so from a liquidity point of view it doesn't matter if investors are putting money into the access accounts or MLIA. Umm - that's interesting. In the MLIA I used to see lots of small sales all at the same time, and I assumed that this was the access accounts buying what they need. I no longer see this. Ah - maybe it was the old Property and British business accounts which have now closed down (I remember Chris saying that everything got a lot faster when they closed down). So maybe part of my problem is that I don't see the access accounts buying anything. Maybe this is just illusionary - it was the old accounts buying that I saw not the access accounts - and maybe the Access accounts get all they need on drawdown now so never have to buy in the MLIA (and hence lack of liquidity).
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alanh
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Post by alanh on Feb 8, 2020 11:02:21 GMT
I've just looked at my MLIA transactions and there are small loan sales (with 40 decimal places) being made all the time. This must be the access accounts buying them.
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rscal
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Post by rscal on Feb 8, 2020 11:41:25 GMT
I've just looked at my MLIA transactions and there are small loan sales (with 40 decimal places) being made all the time. This must be the access accounts buying them. Wouldn't it be nice if AC could allow the trades to be amalgamated - just need to make the descriptions split across multiple fields so we can download then and do that for ourselves.
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iren
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Post by iren on Feb 8, 2020 13:31:25 GMT
I prefer doing P2P straight. Without provision funds, “investment accounts”, bonds etc.
That way you can see clearly what’s happening as you go along, the platform is not distracted or taking other matters into account such as the affect on the provision fund of calling in a loan etc. That way also, the secondary market operates transparently and without the intervention of the biggest of all big hands, the platform trading on behalf of “accounts”.
It’s clear from previous posts on this board that the function of the MLIA is now to provide liquidity to the accounts. Its own liquidity is a tertiary consideration, after the operation of the accounts and the issuing of new loans.
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iren
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Post by iren on Feb 8, 2020 13:52:25 GMT
Liquidity was never or should never have been a component of P2P. Anyone needing liquidity should never be in P2P. Unfortunately way too many people either don’t understand liquidity or P2P or both but still end up investing and then getting upset when liquidity dries up. The NORM is P2P is illiquid. Any appearances of liquidity are not necessarily permanent and should not be taken for granted and certainly shouldn’t be relied upon. Secondary market sales are one component of liquidity. The ongoing receipt of interest and natural capital repayments (from monthly repayments to early, end term and late full redemptions) are the main component. From a large P2P portfolio across several platforms, it should be possible to have a natural cashflow that can cover unexpected expenses or be diverted into other investment opportunities. However, the number of platform failures calls this strategy into question. A further issue is that some P2P is now marketed on its liquidity. The effect of a temporary disruption of liquidity on such a platform is potentially catastrophic.
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Post by mrclondon on Feb 8, 2020 14:21:47 GMT
I suspect there are many reasons for any observed drop in SM liquidity.
In my case the redemptions that are occuring in my non-ISA MLA are not being reinvested for two main reasons a) its only 8 weeks until I can add a further £20k to the ISA MLA b) I think with current events re coronavirus that I should increase my uninvested 'rainy day' cash fund given I have minimal income other than from investments.
Beyond that I suspect everyone already has as much of the 8%+ loans as they want, and the general malaise in the p2p sector is not an encouraging backdrop to attract significant numbers of new lenders. There also becomes a point at which the yield on the access account with provision fund makes more sense than purchaing lower yield loans in MLA.
At a deeper level there are simply some loans that have never been popular and have always had poor liquidity. 808 in Shrewsbury at 8% has long mystified me. I bought slightly more than my normal per loan allocation due to finger trouble £nn00 instead of £n000 so no big deal, but I put the £n00 up for sale a very long time ago. I rarely sold more than £1 a month. I like Shrewsbury as a city, and felt the development would be an easy sell. I was wrong (obviously) and perhaps I've missed something obviously detrimental all along. But my perception is few do the level of due dilligence I do on each loan, so for most of the life of this loan why have there been so few buyers.
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Post by Ace on Feb 8, 2020 16:42:49 GMT
I suspect there are many reasons for any observed drop in SM liquidity.
In my case the redemptions that are occuring in my non-ISA MLA are not being reinvested for two main reasons a) its only 8 weeks until I can add a further £20k to the ISA MLA b) I think with current events re coronavirus that I should increase my uninvested 'rainy day' cash fund given I have minimal income other than from investments.
Beyond that I suspect everyone already has as much of the 8%+ loans as they want, and the general malaise in the p2p sector is not an encouraging backdrop to attract significant numbers of new lenders. There also becomes a point at which the yield on the access account with provision fund makes more sense than purchaing lower yield loans in MLA.
At a deeper level there are simply some loans that have never been popular and have always had poor liquidity. 808 in Shrewsbury at 8% has long mystified me. I bought slightly more than my normal per loan allocation due to finger trouble £nn00 instead of £n000 so no big deal, but I put the £n00 up for sale a very long time ago. I rarely sold more than £1 a month. I like Shrewsbury as a city, and felt the development would be an easy sell. I was wrong (obviously) and perhaps I've missed something obviously detrimental all along. But my perception is few do the level of due dilligence I do on each loan, so for most of the life of this loan why have there been so few buyers.
I saw 808 as a perfectly standard loan, so took my usual slice. I bought some extra when it was offered at a 1% discount. Perhaps it's the discounts that have stopped your extra slice from selling (assuming you're trying to sell at par). Once I see a loan for sale at a discount and put in a buy order for the discount, I might well not go back and adjust that buy order if it doesn't get filled. Without some effort, or a good memory, it's not easy to see that your unfilled purchase order isn't being filled due to it being at a discount that's too high. My regular trawl through my long list of MLA loans takes quite a long time, so I may well gloss over such an issue. I also recently put my holding in 808 up for sale at par and it hasn't sold a single femto-pence. This was just part of my usual strategy to minimise my exposure to the danger area near the end of a loans life, not for any particular concern with the actual loan.
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Post by gramsky on Feb 8, 2020 18:05:02 GMT
Since the introduction of the 'Risk Grades' I have been moving money from the high risk loans to the lower risk loans.
I only invest in loans with an interest rate of 7% or above.
I have had little problem selling even the high risk loans, especially if I am willing to give a 0.5% discount which is not a great loss, and if I am selling someone must be buying.
On the other hand I have difficulty buying the lower risk loans so I assume if I wanted to sell these they would be fairly quickly bought.
I have been doing fairly well over the past few years and at present am invested in AC, LandlordInvest, Relendex. I have a few defaulted loans in FC (property development loans) and luckily only a small amount in Lendy.
But after the FC defaults and failure of Lendy I have also thought about pulling out of P2P but where else do I invest my money?
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ceejay
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Post by ceejay on Feb 8, 2020 18:53:46 GMT
I've just looked at my MLIA transactions and there are small loan sales (with 40 decimal places) being made all the time. This must be the access accounts buying them. Not sure why you assume its the Access accounts doing the buying. It could be, of course. But it could also just be that your sale (or purchase) has been split equally among a lot of buyers (or sellers), which is the norm for the MLA as there will pretty much never be a perfect balance of buyers and sellers on a given loan at a given time.
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Post by Deleted on Feb 9, 2020 13:02:06 GMT
Since the introduction of the 'Risk Grades' I have been moving money from the high risk loans to the lower risk loans. I only invest in loans with an interest rate of 7% or above. I have had little problem selling even the high risk loans, especially if I am willing to give a 0.5% discount which is not a great loss, and if I am selling someone must be buying. On the other hand I have difficulty buying the lower risk loans so I assume if I wanted to sell these they would be fairly quickly bought. I have been doing fairly well over the past few years and at present am invested in AC, LandlordInvest, Relendex. I have a few defaulted loans in FC (property development loans) and luckily only a small amount in Lendy. But after the FC defaults and failure of Lendy I have also thought about pulling out of P2P but where else do I invest my money? Index Funds
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rscal
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Post by rscal on Feb 9, 2020 13:10:31 GMT
I've just looked at my MLIA transactions and there are small loan sales (with 40 decimal places) being made all the time. This must be the access accounts buying them. Not sure why you assume its the Access accounts doing the buying. It could be, of course. But it could also just be that your sale (or purchase) has been split equally among a lot of buyers (or sellers), which is the norm for the MLA as there will pretty much never be a perfect balance of buyers and sellers on a given loan at a given time. It's easy to see the difference. It's not going to be to another secondary buyer if the amounts are uniform and small. If the sales are small in number then that is going to be a case of secondary buyers in competition. (Who buys £1.00 of a loan per day, for several days, for example?)
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ceejay
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Post by ceejay on Feb 9, 2020 14:36:35 GMT
Not sure why you assume its the Access accounts doing the buying. It could be, of course. But it could also just be that your sale (or purchase) has been split equally among a lot of buyers (or sellers), which is the norm for the MLA as there will pretty much never be a perfect balance of buyers and sellers on a given loan at a given time. It's easy to see the difference. It's not going to be to another secondary buyer if the amounts are uniform and small. If the sales are small in number then that is going to be a case of secondary buyers in competition. (Who buys £1.00 of a loan per day, for several days, for example?) I'm not at all sure about this. You ask "Who buys £1.00 of a loan per day, for several days, for example?" ... well, no-one intentionally, but if you are one of a hundred pending buyers when there are no sellers, and a seller then comes along, isn't this what we'd see? And again, the next time a seller appears? Having said that, I'm also sure that the Access accounts will be doing a lot of what might seem like random buying and selling to keep their books in order.
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angrysaveruk
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Post by angrysaveruk on Feb 9, 2020 15:01:47 GMT
Although I tried to sell out about a year ago (and managed to sell out most), I have had loans for sale for over a year - I will get my money back when the money is repaid! I have a theory that AC puts the money from the Automatic investment accounts into new loans.
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