|
|
Post by Financial Thing on Jul 23, 2015 21:14:27 GMT
So forumers (is that a word?)
I've been reading some very interesting articles about P2P recently and also about the next expected economic downtown, probably which will be caused by the U.S. economy / stock market correction.
How do think P2P platforms will fair in general during the next economic downturn? As I see it, default rates are what will bring P2P to its knees and when the economy fairs poorly, I would expect default rates to soar.
I imagine some forum members have a few quid tied up in P2P so what say you? Concerned?
|
|
registerme
Member of DD Central
Posts: 6,624 
Likes: 6,437
|
Post by registerme on Jul 24, 2015 9:09:28 GMT
Forumites?
And yes, I am concerned. The one thing that goes some way to mitigating the risk on some of the platforms is that regular return of capital allows you to alter your reinvestment strategy - eg slowing it down or demanding a higher return. Also, with the relatively short term of most of the loans (at least when compared with bonds or equities), it's not impossible that we will see some of the platforms themselves adjust to to a downturn, in their risk models, their pricing, their choice of which loans to offer.
We're in an extremely benign credit environment at the moment. Rates have never been lower, corporate profits are at an all time high. This simply isn't sustainable. Rates will start rising next year and profits will soften. But, rates offered by more traditional institutions will rise too. That implies that rates offered by P2P platforms will need to rise to offer the same kind of risk premium.
|
|
|
|
Post by Financial Thing on Jul 24, 2015 11:29:54 GMT
Do you think that some platforms pose higher risk than others in concerns to stability during troubled times?
I wonder if any lenders here have experienced a platform defaulting and if so, if they received any of their funds?
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on Jul 25, 2015 17:26:10 GMT
I wonder if any lenders here have experienced a platform defaulting and if so, if they received any of their funds? There is a collection of threads on this forum for ex-platforms. p2pindependentforum.com/board/72/defunct-p2x-platformsI have been lucky to avoid them so far, but I do remember much discussion about yes-secure on another discussion board. I think that they paid out everyone when they shut down.
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Jul 27, 2015 19:28:28 GMT
The pawn-based platforms should do well, with an increase in business from the pawn side. This is an interesting way of getting some investments without equity or bond correlation, assuming the loans are held to maturity.
The others will depend on their particular investment types, loan durations and interest rates.
I'm looking to invest more in P2P in part as a protective measure against a stock market downturn.
|
|
