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Post by Deleted on Jul 4, 2015 16:01:54 GMT
First of all apology for creating a new thread if one already exists. After testing water with saving stream, I think I might use it for a fair chunk of my investment (on short term basis) as I'll be trying for mortgage in half or so year.
I was wondering if I put my investment in secondary market, and already funds are available for others to pick, will my share of loan be picked before SS's share of loan?
For example, if amount available to invest in PBL 99 is £100K and I decide to put £1K of my share in secondary Market, will that £1K be taken before £100K?
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mikes1531
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Post by mikes1531 on Jul 4, 2015 17:58:57 GMT
First of all apology for creating a new thread if one already exists. After testing water with saving stream, I think I might use it for a fair chunk of my investment (on short term basis) as I'll be trying for mortgage in half or so year. I was wondering if I put my investment in secondary market, and already funds are available for others to pick, will my share of loan be picked before SS's share of loan? For example, if amount available to invest in PBL 99 is £100K and I decide to put £1K of my share in secondary Market, will that £1K be taken before £100K? Welcome to the forum. If nothing has changed since the last time I remember this subject coming up, then if the other £100k available is from SS underwriters still trying to exit their positions then, yes, your £1k will be at the front of the queue. If, however, all the underwriters already have exited their positions and the £100k is from investors like you and me, then your £1k will be behind the other £100k. And if, for whatever reason, nobody wants to buy any more PBL99 parts then it won't matter where your parts are in the queue because you'll be stuck with them until the loan is repaid by the borrower. My point is that while the secondary market is very active now, and selling parts is easy at the moment, there's no guarantee that it will always be the case. So bear that in mind when investing money that you might need to have back at some particular point in the future.
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Post by Deleted on Jul 4, 2015 18:26:17 GMT
Thanks Mike. So I'll have to be very careful with how much I put in, as I may be stuck for a year (depending upon loan length) or more if SM doesn't perform well.
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mv
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Post by mv on Jul 4, 2015 19:13:51 GMT
In theory yes, but at present the SM is very functional. Just no guarantees
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mv
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Post by mv on Jul 4, 2015 19:19:58 GMT
If you want to access your money in 6 months or so i would invest it in to recent loans and then sell on every couple of months or so when new opportunities arise. That way the loans in your portfolio are 'fresher' and may be easier to sell on. Also, if you can be quick off the mark with the small loans that pop up and get gobbled v. quickly as these have the most people keen to buy on the SM (as they didn't get a piece first time around).
It's not wouldn't be a great idea to diversify in to loans with a short period of time life as there is a risk that they may a) extend or b) default and this could tie up you money in a loan that is harder/impossible to sell on.
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david42
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Post by david42 on Jul 4, 2015 22:05:25 GMT
First of all apology for creating a new thread if one already exists. After testing water with saving stream, I think I might use it for a fair chunk of my investment (on short term basis) as I'll be trying for mortgage in half or so year. I was wondering if I put my investment in secondary market, and already funds are available for others to pick, will my share of loan be picked before SS's share of loan? For example, if amount available to invest in PBL 99 is £100K and I decide to put £1K of my share in secondary Market, will that £1K be taken before £100K? Welcome to the forum. If nothing has changed since the last time I remember this subject coming up, then if the other £100k available is from SS underwriters still trying to exit their positions then, yes, your £1k will be at the front of the queue. If, however, all the underwriters already have exited their positions and the 100k is from investors like you and me, then your £1k will be behind the other £100k. And if, for whatever reason, nobody wants to buy any more PBL99 parts then it won't matter where your parts are in the queue because you'll be stuck with them until the loan is repaid by the borrower. My point is that while the secondary market is very active now, and selling parts is easy at the moment, there's no guarantee that it will always be the case. So bear that in mind when investing money that you might need to have back at some particular point in the future. Because the web site does not distinguish whether the funds on offer are from underwriters, before selling anything on a loan that is still being sold by underwriters, you can try selling a small part and immediately buying it back. If you find you have bought your own loan part then you know parts you sell will go to the front of the queue. It is a tedious workaround but better than leaving your loan parts stuck in a queue earning no interest.
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star dust
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Post by star dust on Jul 4, 2015 22:45:32 GMT
Because the web site does not distinguish whether the funds on offer are from underwriters, before selling anything on a loan that is still being sold by underwriters, you can try selling a small part and immediately buying it back. If you find you have bought your own loan part then you know parts you sell will go to the front of the queue. It is a tedious workaround but better than leaving your loan parts stuck in a queue earning no interest. I have never tried this, but I presume you have, does the loan part you purchase have the same Loan Part ID as the one you've sold?
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david42
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Post by david42 on Jul 4, 2015 23:39:12 GMT
Because the web site does not distinguish whether the funds on offer are from underwriters, before selling anything on a loan that is still being sold by underwriters, you can try selling a small part and immediately buying it back. If you find you have bought your own loan part then you know parts you sell will go to the front of the queue. It is a tedious workaround but better than leaving your loan parts stuck in a queue earning no interest. I have never tried this, but I presume you have, does the loan part you purchase have the same Loan Part ID as the one you've sold? The loan part IDs do change but I ignore them. I just look at my cash balance in the dashboard. If my purchase bought my own loan part, then my cash balance does not change because the purchase cost is instantly cancelled out by the sale proceeds. But if I did not buy back my own loan part then my cash balance drops by the purchase price I just paid. Yes, I used this technique to sell some of PBL033 ahead of the underwriters when PBL040 was launched and I wanted to diversify my holding.
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Post by Deleted on Jul 5, 2015 7:08:11 GMT
Thanks David,
I'll keep that method in my mind and will target newer loans.
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star dust
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Post by star dust on Jul 5, 2015 12:57:38 GMT
I have never tried this, but I presume you have, does the loan part you purchase have the same Loan Part ID as the one you've sold? The loan part IDs do change but I ignore them. I just look at my cash balance in the dashboard. If my purchase bought my own loan part, then my cash balance does not change because the purchase cost is instantly cancelled out by the sale proceeds. But if I did not buy back my own loan part then my cash balance drops by the purchase price I just paid. Yes, I used this technique to sell some of PBL033 ahead of the underwriters when PBL040 was launched and I wanted to diversify my holding. Thanks for the confirmation, I suspected loan part ID's died on sale but wasn't totally sure, I was pondering their system really. The various sales and purchases should have shown up (with their differing IDs!) in your transaction history too, although it seems they don't necessarily appear strictly chronologically.
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