tjtl
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Post by tjtl on May 27, 2020 7:57:56 GMT
Is it tempting to go back in?
Like many posters I suspect I have been quietly withdrawing cash from a variety of P2P platforms. I never did buy the hysterical screaming from some posters that, for example, “AC was finished, destroyed” or that “RS management are incompetent” , but did take the view that discretion was the better part of valour, and best to take cash out now and then survey the damage and work out what next to do.
I have filled up to max protection limits with RCI Bank, Coventry BS, Skipton BS, Aldermore, Investec, and I have even stuffed some cash into Premium Bonds. I am still expecting the same again in cash back from Ratesetter , AC, Relendex, Wellesley and blooming Funding Circle- so decision os now what to do with the next influx of cash. Opening yet more easy access accounts that just immediately cut rates as soon as I deposit cash is about as fun as an evening listening to Dominic Cummings.
It strikes me that, while we aren’t out of the woods yet, there are a few glimpses of sunlight appearing, and it is possible to work out which platforms have had “a decent war” and which have been awful- FC are clearly in the last category, but to be honest they were awful for some time before. I know others have different views, but I think in their own ways the management teams at AC, RS, even Wellesley and Relendex have so far done pretty well.
I will almost certainly hold off for reinvesting for a few weeks, but I think the platform risk for some of the P2P players has reduced, and assuming interest rates return to normal (so RS stops the 50% haircut), I think some of the platforms will merit a re-evaluation.
I am sure a number of posters will point out that in their opinion I am mad- but I am planning to reinvest most if not all of the cash I am still waiting for into RS (if interstate’s rates go back) , AC (if they sort out queuing, I don’t want to go in and get trapped), and Rlendex (on the low LTV loans).
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dave4
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Post by dave4 on May 27, 2020 8:37:24 GMT
It is tempting, but is it tempting because returns from banks etc are so poor ??. Is the new normal going to be neer £0 interest from banks, and hope fscs works if its needed, P2p interest rates marginally better, with possibly more risk ?.
Fools rush in against fortune favours the bold .
Dunno
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jonno
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nil satis nisi optimum
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Post by jonno on May 27, 2020 8:39:42 GMT
Is it tempting to go back in? Like many posters I suspect I have been quietly withdrawing cash from a variety of P2P platforms. I never did buy the hysterical screaming from some posters that, for example, “AC was finished, destroyed” or that “RS management are incompetent” , but did take the view that discretion was the better part of valour, and best to take cash out now and then survey the damage and work out what next to do. I have filled up to max protection limits with RCI Bank, Coventry BS, Skipton BS, Aldermore, Investec, and I have even stuffed some cash into Premium Bonds. I am still expecting the same again in cash back from Ratesetter , AC, Relendex, Wellesley and blooming Funding Circle- so decision os now what to do with the next influx of cash. Opening yet more easy access accounts that just immediately cut rates as soon as I deposit cash is about as fun as an evening listening to Dominic Cummings. It strikes me that, while we aren’t out of the woods yet, there are a few glimpses of sunlight appearing, and it is possible to work out which platforms have had “a decent war” and which have been awful- FC are clearly in the last category, but to be honest they were awful for some time before. I know others have different views, but I think in their own ways the management teams at AC, RS, even Wellesley and Relendex have so far done pretty well. I will almost certainly hold off for reinvesting for a few weeks, but I think the platform risk for some of the P2P players has reduced, and assuming interest rates return to normal (so RS stops the 50% haircut), I think some of the platforms will merit a re-evaluation. I am sure a number of posters will point out that in their opinion I am mad- but I am planning to reinvest most if not all of the cash I am still waiting for into RS (if interstate’s rates go back) , AC (if they sort out queuing, I don’t want to go in and get trapped), and Rlendex (on the low LTV loans). You're absolutely spot on!!.........................You're mad 
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tjtl
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Post by tjtl on May 27, 2020 8:48:50 GMT
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pip
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Post by pip on May 27, 2020 8:53:09 GMT
In my opinion the risk reward doesn't stack up. Too hard to know the real position of companies and people you are lending to. In my opinion in 3 months it will be a lot clearer as by then we will know how many people who took payment holidays have restarted repayments. What's the downside, 3 months of interest, upside could be a fair chunk of capital. In addition after FS still in no way convinced that platform wind down procedures are in any way fit for purposes across the board. Suspect that COVID-19 has seriously impacted the business plan of almost all sites.
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Post by brightspark on May 27, 2020 9:52:38 GMT
I too have pondered this conundrum. When p to p caught my interest the risk reward equation seemed reasonably balanced and sales pitch of cutting out the middleman seemed appealing. All that changed as platforms themselves started collapsing with demises that have cost involved lenders dear. Margins have been further squeezed by falling interest rates and account charges. The housing market is currently in a state of near stasis whatever the pundits might say. In the medium term a better legal framework to protect the interests of investors is sorely needed. Platform operators have control and influence over very large sums of saver/investor money and several have demonstrated little integrity in the handling of such responsibility simply lining their own pockets and walking away from the messes created. The current risk reward ratio is now skewed the wrong way. My gut instinct is to tighten down the hatches. For now liquidity is king. All things considered I am not tempted to go back in -on the contrary I continue to sell down.
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r00lish67
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Post by r00lish67 on May 27, 2020 10:50:17 GMT
I can see the temptation, but to me it feels like we're in the eerie calm at the eye of the storm. We don't really know what the economic impact will be until the economy has been brought of out its Government-funded stasis.
Further to that, I'm concerned about what Autumn/Winter will bring in terms of a resurgence of viral spread and consequent knock-on effects.
One of the (many) troubles with P2P is it's lopsidedness. There's inevitably going to be some big hits somewhere to both sectors (commercial property perhaps? unsecured loans?) amongst other sectors that will probably fare just fine (residential property?). Then there's the increased platform risk of course.
If there was a nice big "P2P index tracker" it might do ok overall, but instead we end up getting a few % for our troubles on the OK sectors and platforms and huge haircuts on those that fail.
On the other side, there seems very little extra the platforms can offer to compensate despite the hugely increased risks, which unfortunately is another 'quirk' of P2P. They can't offer more, as borrowers aren't going to pay extra, and the only other thing to chop into is their own cashflow.
On RS you have the prospect of signing up to 50% less interest, Assetz offer you a cut in QAA interest with the prospect of a discounted SM to come to devalue your investment, LC used to have bonuses when times were good but now don't. It's not greatly appealing is it.
I might be tempted by Assetz when they introduce their variable pricing of the QAA, but to be honest I suspect the discounts won't be very interesting. We'll see.
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Post by davee39 on May 27, 2020 11:20:41 GMT
My wife holds a very small SIPP. The investments were moved into Corporate Bond/Indexed Bond funds following the Woodford debacle. These are holding up well in the current market with a yield of around 3%. I have investments in riskier higher yield bond funds, yielding up to 6% which are showing moderate losses which I expect to recover. My ex p2p cash is currently going into corporate bonds and the Henderson High Income IT.
Henderson has a current yield of 7% and stands at a 6% discount. The yield may fall in the short term as dividends are cancelled, but I expect it will be protected by the revenue reserve buffer.
I see RS struggling to lend competitively, and Assets moving to attract more longer term corporate funding. I will continue to withdraw from P2P.
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macq
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Post by macq on May 27, 2020 11:28:18 GMT
the odd niche company such as ABL has appeal to me when i am positive about p2p but then pretty soon doubt creeps in about all p2p at the moment.
If there was say a couple of really big companies who survive the next 12 - 18 months and could offer a decent rate i might be tempted.But the problem now is that you can see in any downturn or even before with LW that rates will be cut and you can do nothing about it so at the lower end you are being paid less then you can get in a protected account.So as a business idea it looks a harder sale moving forward and to an investor it must look less appealing on both the money to be made and the strength of the platforms
I think it will end up with 1 or 2 big p2p platforms for those willing to take the risk and smaller players reverting back to how it was using HNW investors for property development etc but the risk v reward has moved back to pre p2p for me
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ceejay
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Post by ceejay on May 27, 2020 13:19:33 GMT
Is it tempting to go back in? ... Yes. But like everyone else I'm torn. Returns on cash are falling (though still positive for the moment, albeit not in real terms). The Stock Market is a huge unknown - it really could go in any of several quite different ways from here and I was feeling overexposed to it before all this started - with prices where they are now I'm more inclined to sell than buy. Expect a significant move one way or the other at the end of June when we find out if the B****t transition is to be extended or we head for a crash-out no deal. I'm also slowly withdrawing from P2P, which gives a problem, as I can't reduce all of my investment options at the same time. Especially when I can't splurge it on a nice holiday! I might consider a little dabble in ACs Access Accounts if the discounts look interesting - if you believe the noise that there has been on the AC boards, there is a queue of large investors in a rush to get out. But, on the whole, the packaged options look like they've had their day. Perhaps some selected individual loans is the way to go - at least you know what you're getting into, more or less, and there are still a few discounts to be had.
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bg
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Post by bg on May 27, 2020 18:01:11 GMT
I'd disagree with that statement. Brexit may have seemed like the most important economic issue in the world for the past 3-4 years but it pales into insignificance when compared to the impact of the virus. What is far more important is how the virus now pans out. If it continues to dissipate and ends up petering out by the end of summer then that will be a huge boost to equities, regardless of whether a trade deal is agreed with the EU. Likewise if we see a significant second (or third) spike then the impact will be significant in the other direction for some sectors. Bear in mind we are talking a 10-20% hit to GDP vs a less than 1% annual hit (predicted) under the hardest of hard exits. Personally, I think the most important factor to consider now is the dramatic money printing (which dwarfs the GFC) with base at zero (or below), its a huge fillip for asset markets regardless of the underlying issues. The scale really is unprecedented and unless we get a huge spike in inflation then it will be a big positive. Even if inflation does surge its still a positive, especially when comparing to investing in cash/bonds/P2P etc. I used to be worried about a hard exit but now I can honestly say the last thing the UK needs is to prolong the uncertainty over its relationship with the EU. An extension of 2 years would just be the worst. The country needs to get over the arguments, find an equilibrium and move on. There is enough uncertainty with this bloody virus. I'm sure in any case there will be some sort of last minute compromise. The EU has enough issues of their own at the moment.
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ceejay
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Post by ceejay on May 27, 2020 18:41:49 GMT
I'd disagree with that statement. ... Glad to see that you disagree with nothing that I said!
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bg
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Post by bg on May 27, 2020 20:11:25 GMT
I'd disagree with that statement. ... Glad to see that you disagree with nothing that I said! Never did get the hang of that bit 😀
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Post by df on May 27, 2020 20:52:43 GMT
Is it tempting to go back in? Like many posters I suspect I have been quietly withdrawing cash from a variety of P2P platforms. I never did buy the hysterical screaming from some posters that, for example, “AC was finished, destroyed” or that “RS management are incompetent” , but did take the view that discretion was the better part of valour, and best to take cash out now and then survey the damage and work out what next to do. I have filled up to max protection limits with RCI Bank, Coventry BS, Skipton BS, Aldermore, Investec, and I have even stuffed some cash into Premium Bonds. I am still expecting the same again in cash back from Ratesetter , AC, Relendex, Wellesley and blooming Funding Circle- so decision os now what to do with the next influx of cash. Opening yet more easy access accounts that just immediately cut rates as soon as I deposit cash is about as fun as an evening listening to Dominic Cummings. It strikes me that, while we aren’t out of the woods yet, there are a few glimpses of sunlight appearing, and it is possible to work out which platforms have had “a decent war” and which have been awful- FC are clearly in the last category, but to be honest they were awful for some time before. I know others have different views, but I think in their own ways the management teams at AC, RS, even Wellesley and Relendex have so far done pretty well. I will almost certainly hold off for reinvesting for a few weeks, but I think the platform risk for some of the P2P players has reduced, and assuming interest rates return to normal (so RS stops the 50% haircut), I think some of the platforms will merit a re-evaluation. I am sure a number of posters will point out that in their opinion I am mad- but I am planning to reinvest most if not all of the cash I am still waiting for into RS (if interstate’s rates go back) , AC (if they sort out queuing, I don’t want to go in and get trapped), and Rlendex (on the low LTV loans). In my view, filling up FSCS accounts is the safest strategy. Unless you have millions to store, there are quite a lot of savings accounts with unrelated banks/BS's that are currently paying some interest. I'm not disappointed with how most p2p platforms handled the situation and not trying to desperately withdraw all cash I have in p2p (some don't even give you a choice  ). I prefer to exercise patience for now. I might restore the level of my holdings in AC, RS and some others in future depending how the things pan out.
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Post by dan1 on May 27, 2020 22:15:22 GMT
Hmmm... you're a risk-junky IMO - I mean that in the nicest possible way I get the distinct feeling (and really, I have absolutely no expertise in investing - think I'd be here if I did?) that those who drive market prices (them dirty active investors  ) are suffering from recency bias. Remember, the apocalyptic warnings during the GFC that resulted in share prices diving (didn't the S&P lose 50% or something?) because they expected earnings to be hit for several years. In the end prices rebounded pretty quickly considering and the rise has been pretty meteoric until early this year. Is the market expecting the same this time around, I think it just might be because from where I sit the risks are hard to quantify and certainly hard to justify when the S&P is down just 10% or so from the peak. Interesting to look at historic bond yields too. Back in 2008 the 10 year UK Gilts were over 3% (base rate fell to 0.5%), and now they're under 0.2% (base rate is at 0.1%). That implies the markets were expecting rate rises back in GFC but now they expect stimulus measures to keep rates hovering around 0% for the foreseeable future. Is that realistic? Far too little upside in P2P but plenty of downside (if only from the lack of liquidity) given the uncertainty at present. |
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). I prefer to exercise patience for now. I might restore the level of my holdings in AC, RS and some others in future depending how the things pan out.
) are suffering from recency bias. Remember, the apocalyptic warnings during the GFC that resulted in share prices diving (didn't the S&P lose 50% or something?) because they expected earnings to be hit for several years. In the end prices rebounded pretty quickly considering and the rise has been pretty meteoric until early this year. Is the market expecting the same this time around, I think it just might be because from where I sit the risks are hard to quantify and certainly hard to justify when the S&P is down just 10% or so from the peak.