Is P2P investing now effectively dead?

I don't think the discussion should be p2p *against* S&S

They both have advantages and disadvantages. 

P2p has been going upwards on my sheets in an almost linear way even though there have been defaults.

The platform defaults are the major unknown variable; they cause the jumps, individual defaults are invisible if diversified. 

Still, I use p2p to lower the average variance in my portfolio.

If not too much trouble / effort, could you go into some more detail on this, please?  (I'm not sure what you mean it and, therefore, why you would seek to achieve it.)

I'd say its more of a sawtooth. Upwards steady as she goes and then BAM - a discontinuity.....

Interesting discussion.

I'd toss in that stock markets and their systems have been around for 100 years plus, and in that time, all the crash experiences, regulation etc, they are not perfect, but they are liquid, and risk I would argue is actually easier to quantify through systems like Beta and things like that. You have trends, you have disclosure, ideally you have transparency, and you have govt agencies, active/protest investors, contrarians, etc. 

The biggest mitigation against risk with stocks etc, is time in the market and diversification. You can do this easily.

The main issue for me with P2P is that the FCA has done absolutely jack @@t to enforce transparency, has come up with too many conniving ways to avoid the public holding companies to account, and literally I feel it's an organisation which is not on the side of the lender or the borrower - it's there to facilitate the businesses/industry which is absolutely the wrong approach. 30 day time limits for complaints, companies can go broke for force a policy change through quicker than this!  As a resolution process etc - it's bullshit. These systems and platforms need way more transparency...a statement that says "your investment is not protected by the FCS" is not transparency nor sufficient.

FCA should come up with a standard risk expression information template, a single web page on a per company basis that allows mom's and pop's to understand the platform they are investing in in real time. Simple liquidity ratios, GDP impact assesment, investor/back disclosure and track records on one clean simple page per company. The FCA should demand constant up to the day realtime disclosure, and absolute transparency. It should not allow companies to fold their portfolio or change their 'invitation to treat' for extraneous reasons, the initial investment promise should be a bond, just like when you purchase shares, you have the stock market to uphold the bond. For example, sell a share, irrespective of price, and you know you are getting the money. 

Because of this, with P2P, time in the market is not your friend; because shadow actions persist, because transparency is variable, because platforms can change their @@@@ing minds when they feel like it, it very much feels like you have to pre-empt everything.

I use P2P for portfolio diversification, and try like an amateur to make risk assesments based on rates, track record and business model. Luckily have done ok, with only one unsatisfactory platform so far. Touch wood. But its a crapshoot.

Comparing p2p with equities is comparing apples and oranges. If you’re comparing p2p with anything compare it to the credit and bond markets. Unfortunately the industry branded some of its accounts “access” when, of course they are five year accounts.

but, and it’s a big but, unlike in say the NASDAQ in year 2000 no one in the big 4 p2p companies lost 80% of their money and didn’t see it get back to break even for over 15 years. No, for the most part they continued to receive interest in excess of risk free rates for the duration of the pandemic. Yes, they may have received less than “expected” interest but flippin heck we’ve just had the worst recession ever and you’re in a lending product. OK access to capital hasn’t been up to expectations because of abnormal conditions, but in the meantime that capital has been earning a decent inflation adjusted return.

So, it will take some time for confidence to return and the market to rid itself of the deluded, the injured, the upset, the ill informed and the plain unlucky, but after that I would expect it to continue to deliver very attractive returns compared to cash savings.

It is completely accurate I would say. That Woodford fund was packed full of illiquid shares. Most non professional investors shouldn’t really be investing in that kind of stuff and if they do should realise getting your money out is not guaranteed. Standard equity investments are extremely liquid as long as the markets are open.