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Post by westonkevRS on Dec 17, 2014 6:23:35 GMT
I know different lenders have different strategies, ranging from jumping to the front for fast lending at the expense of a few basis point returns (e.g. me) to sitting high waiting for the spikes. Some are happy with Market Rate to lend and forget, but I suspect not many on this forum. And there is much strange behaviour in between, like leaving money high above 6% (5 year market) hoping for an abnormal occurrence or money being "stranded" because of Your Rate.
Will you guys/galls share your strategies?
I would say say that I expect the Chistmas lull to begin around now for a variety of reasons, but the borrower lull will depress market demand. So anyone sitting high in the queue of 5.9% or above might want to set a lower order. Please don't take this as advice or (the dreaded) manipulation, there is no insider knowledge here. Just my experience of lending over the years. So don't complain if it's wrong, just my take if you want the money lent before the New Year....
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Post by cautious on Dec 17, 2014 8:17:21 GMT
Hey Kev,
I invest in two ways......
If a bond matures (which has just happened), I invest those funds at the best rate I can get for that days chunk (usually in 5k blocks).
In this ex B&M bond example it was earning 5% so anything over 5% is acceptable to me (to maintain my income, and get it leant ASAP)....I therefore jump in at the bottom of the queue.
For RS capital + interest re-investment I try to match my average RS return which is currently 5.8%....if I judge I can better that by waiting in a queue for a couple of days I will do so........if the queues look to long at 5.8% I'll go for 5.5 to 5.7 ish.
Regards Jon
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pikestaff
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Post by pikestaff on Dec 17, 2014 8:21:56 GMT
In theory, I reckon it's worth waiting 10 days for an extra 0.1% on the 5 year market, allowing for prepayments, but I'm not that patient. I also suspect (but don't know) that if you catch a big spike the prepayment risk may go up sharply. So I never set my rate very high.
As to where I set my rate, that depends on market conditions. At the moment there is enough waiting to be lent at 5.9%, with more being added all the time, that I'm setting my rate at 5.9%. If the 5.9% band was much thinner I would ask for 6.0%, but not at the moment. In present conditions, the main benefit that I see in setting my rate is to avoid any downward spikes in the morning market rate. The 5.9% queue is moving fast enough that I would not consider lending at a lower rate, unless enough lenders break ranks that the market looks like settling lower.
If the market moves sharply down over the holiday period I will not chase it down below 5.8%, in the hope/expectation that it's just a downward spike.
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Post by p2plender on Dec 17, 2014 10:55:12 GMT
When's peak borrowing season then Kev, mid spring?
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markr
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Post by markr on Dec 17, 2014 13:01:16 GMT
I have a general rule not to invest in the 5 year at less than my current overall rate. So far this has been fairly easy since I invested a lump sum when the rates were much lower than now, so my current rate is 5.7% although it's been there for a while so I'm expecting it to become 5.8% any time now (oh for another decimal place!) If I can't achieve that or I think the rates are in a trough and will pick up soon, I'll park funds in the monthly. My monthly market is set to reinvest at market rate so these funds will just churn round until I turn it off because I'm happy with the 3 or 5 year rate. My contracts in the monthly market have repayment days spread though the month so after turning off reinvestment funds start to return quickly.
Whether all this faffing about has earned me more than just setting auto invest and forgetting about it, I don't know. But for me P2P is about the taking part as well as the winning (probably why I still persevere with Figgy Constipation) so I don't mind.
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Post by yorkshireman on Dec 17, 2014 13:27:57 GMT
At current rates my strategy is to withdraw my brass from RS and place it elsewhere and I don’t mean spend it. 
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spiral
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Post by spiral on Dec 17, 2014 16:39:40 GMT
I'm pretty much with pikeman here.
I will not normally add at the lowest rate as it usually clears within a few hours. I'm happy to wait a couple of weeks for an extra 0.1% or even a month for an extra 0.2%. Usually rates rise towards the end of the month so most get matched before the month has passed. I know December will not be typical.
I'm also happy to have a couple of % of my overall funds sitting in the queue as they don't overly affect my overall return.
I check my account at least once per day so am able to adjust settings in response to what I see.
I do like to spread the risk across multiple loans (no more than 2% of funds in any loan) which as I've said before, is not easy on RS as you need to let money build up between your offers and hope that the money between those offers doesn't get removed. I try to maintain at least £50K between my offers if they are at the same rate but would much prefer to be able to add say £1000 and stipulate a maximum exposure of £100 per loan rather than manually having to add the £100 10 times.
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Post by geoffrey on Dec 17, 2014 20:56:48 GMT
My "strategy" is simple. I'll lend on RS at 6% or above for 4/5-year, but when rates go below 6% as in the first half of this month, I switch my funds to AC, where the Green Portfolio offers 7% right now, no waiting around, and with both a provision fund and asset security. Oh, I can also sell out pretty quickly if I need to, at no cost (yes, I know I'm not guaranteed to find a buyer). I'm prepared to accept 1% less from RS due to its tried-and-tested rock-solid reputation for safety, but I can't take a bigger hit than that atm.
As for the lull, I imagine there will be one while people eat their turkeys and pull Xmas crackers, but the RS volume tab is showing approved demand for 4+5 years at £2.7 million, so I'm wondering whether this might be the year that bucks the trend. We'll see. And sorry, Kev, forgive me for being a cynic, but the idea that you have no special insight into the RS order book and the need to attract new lender funds strikes me as... poppycock  . In full Xmas spirit of course!
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duck
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Post by duck on Dec 18, 2014 5:09:39 GMT
RS has been criticised for being boring, a badge I believe is worn with some pride at RS Towers.
My "strategy" is simple, liven it up, give the internet scribblers something to get all heated about.
I dump money onto the markets at well below market rates. I chose the rate in a totally random manner, sometimes at 0.5% below, other times I pick 1.5% below and extreme boredom brings on a 2.1% below. Excess funds are added at 8%+ in the 5 year market (got some in the 3 year as well ) to ensure that I can continue to have fun.
Now what was rule 1 of the internet ....................
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Post by westonkevRS on Dec 18, 2014 17:33:08 GMT
When's peak borrowing season then Kev, mid spring? For loans, it's January (it's the time where people get themselves in order, debt consolidation, beginning of home improvement projects, etc). For credit cards; the peak spend periods are April (Easter time) and November/December.....
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jlend
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Post by jlend on Dec 18, 2014 22:10:04 GMT
Must admit that these days i usually do just stick with the market rate.
I have learned to like the simplicity of leaving the money to keep ticking over and have weaned myself off from checking quite as often as i use to....
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Post by p2plender on Dec 19, 2014 14:35:49 GMT
Thanks for reply kev.
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. In full Xmas spirit of course!