stevio
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Post by stevio on Sept 11, 2015 16:35:01 GMT
I have got some substantial chunks of the new loans recently and I am now in a dilemma that I hope the experienced investors can help advise on! I have got rid of the loans with 0-3 months left, theory that the close they get to repayment, the more risk they carry Now left with sizable chunks of the new 12 month loans and other bits 8-11 months DILEMMA - Do I: a) get rid of the 8-11 months and risk not being diversified but not having to put much effort in for full 12 months b) reduce some of the 12 month chunks, remain fairly diversified, but may need to put some work in 8-11 months time Thanks for your wisdom!       |
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Investor
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Post by Investor on Sept 11, 2015 16:38:56 GMT
b) and next time don't be so greedy, there will be plenty of opportunities in that time frame to keep diversification moving along. Please read other threads on the 'Naughty Boy Syndrome'  |
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SteveT
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Post by SteveT on Sept 11, 2015 16:39:51 GMT
Don't be fooled by the fact that all new loans have a nominal 12 months term. They can be repaid at any point the bridging finance is no longer needed.
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stevio
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Post by stevio on Sept 11, 2015 16:43:20 GMT
Don't be fooled by the fact that all new loans have a nominal 12 months term. They can be repaid at any point the bridging finance is no longer needed. Sure, but hedging your bets, would you not think the 12 months are more likely to last longer?
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Investor
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Post by Investor on Sept 11, 2015 16:47:25 GMT
Don't be fooled by the fact that all new loans have a nominal 12 months term. They can be repaid at any point the bridging finance is no longer needed. Sure, but hedging your bets, would you not think the 12 months are more likely to last longer? But with the trust structure imminent, diversification will outweigh the loan length dilemma. What percentage of your total loan book is your highest loan, and more importantly are you ready to lose all of it?
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stevio
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Post by stevio on Sept 11, 2015 16:54:12 GMT
Hear Ya!
20%
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registerme
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Post by registerme on Sept 11, 2015 16:57:21 GMT
The approach I took was to diversify my original deposit as much as possible across all extant loans (it was much easier a month or so back), and then sell down / reinvest earned interest across new loans or loans I didn't have exposure to over time (again this was easier before, but I suspect will become easier again as pre-funding settles down). My maximum exposure is now around 7.7% of my total SS portfolio, with a long term downwards trend. Going forwards I'll pick up pieces of new loans via the pre-funding approach where I like them, and apply a similar approach to the secondary market as and when possible (very hit and miss though given the funds merry-go-round). I agree with Investor that diversification is more important than age. I'd also prefer to have funds sitting earning nothing for a time than be overly exposed to one loan, or be exposed to a loan I'm not comfortable with. |
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Post by solicitorious on Sept 11, 2015 17:19:53 GMT
My strategy, with the help of a bloody complex spreadsheet, in order of importance.
1. A heavy bias to the smaller loans which are entirely covered by the Provision Fund. Approx 75% of my funds are in such loans.
2. No more than 5% of my funds in any one loan in any event, with lesser %s in the riskier loans (although no loan from SS looks remotely risky at the moment, to be fair)
3. A gradual shifting from the oldest loans to newer ones, only bothering really with those which have overrun or have just days to run.
4. Trying to equalize, as far as possible, across loans in each category.
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Post by max47 on Sept 11, 2015 18:14:50 GMT
I've not had to,or wished to,yet but how do you actually sell an investment on the secondary market. Can't see anything obvious on the platform.
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Post by fiatlender on Sept 11, 2015 18:24:27 GMT
I've not had to,or wished to,yet but how do you actually sell an investment on the secondary market. Can't see anything obvious on the platform. On the dashboard page, click "view details" next to "Total live loan parts". Then click on the loan you wish to sell. Select the amount you want to sell and "Sell Loan Part"
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jonah
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Post by jonah on Sept 11, 2015 19:16:40 GMT
I've not had to,or wished to,yet but how do you actually sell an investment on the secondary market. Can't see anything obvious on the platform. On the dashboard page, click "view details" next to "Total live loan parts". Then click on the loan you wish to sell. Select the amount you want to sell and "Sell Loan Part" You give up interest on that part you are selling as soon as you put it up. You don't get the cash until it is all gone. So early in the morning might help close it down and get you the money to reinvest or move without losing interest.
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Investor
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Post by Investor on Sept 11, 2015 21:37:19 GMT
Or simply sell your 20k in 20 x 1k chunks. You are still likely to sell them all but at least you get your cash back available to you when each chunk is sold
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webwiz
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Post by webwiz on Sept 12, 2015 7:40:13 GMT
Or simply sell your 20k in 20 x 1k chunks. You are still likely to sell them all but at least you get your cash back available to you when each chunk is sold I am sure Investor means this but just to clarify: sell the chunks one at a time, then you are still getting interest on 95% of your money even if the chunks do not sell immediately. It's a bit more work though.
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jonah
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Post by jonah on Sept 12, 2015 11:30:48 GMT
Don't be fooled by the fact that all new loans have a nominal 12 months term. They can be repaid at any point the bridging finance is no longer needed. In fact, before you sign on, SS's site suggests that loans typically have a 7 month term. Taking the ones repaid to date give you the following first graph attached. The second one is just PBLs as that seems to be the direction of travel for this platform.  As you cab see, the number 'going to term' isn't huge. I expect that the numbers of tilted due to different term lengths on historical loans. As I am not 100% sure on the rules for this sort of data (although it doesn't reference any borrowers... it is using data?) I've flagged this for moderation. Also savingstream tag for their visibility.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 12, 2015 12:03:21 GMT
Don't be fooled by the fact that all new loans have a nominal 12 months term. They can be repaid at any point the bridging finance is no longer needed. In fact, before you sign on, SS's site suggests that loans typically have a 7 month term. Taking the ones repaid to date give you the following first graph attached. The second one is just PBLs as that seems to be the direction of travel for this platform. As you cab see, the number 'going to term' isn't huge. I expect that the numbers of tilted due to different term lengths on historical loans. As I am not 100% sure on the rules for this sort of data (although it doesn't reference any borrowers... it is using data?) I've flagged this for moderation. Also savingstream tag for their visibility. 7 months was the boat term. Are you counting boat loans with the same name as one term? Boat loans that needed extensions were relaunched as new loans so the figures need to be added together in these instances. Also there are a few PBLs that were pulled so would need to be excluded to prevent distortion, also how do you treat delayed drawdowns (eg 11-12) Very few boat loans AFAIK repaid early and most PBLS have gone to term. Full 12 month terms is a relatively new phenomena, anything from 3-12 months before.
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