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Post by chris on Nov 11, 2015 18:03:33 GMT
Yes and for me the interesting thing is how the geia is going to act when the two windmills repay.Will it just ignore the 20% rule and leave accounts outside the fund proposal statement to investers or will it start saleing off loan parts to maintain the max 20% investment rule and leave people at present 100% invested with uninvested funds.I am thinking the scheme was designed for a constant churn of new loans to enable loan parts to be moved arround to maintain diversity but with no new loans and old ones starting to repay thing are going to get very messy. have you considered having the 20% rule for purchases only, and ignoring it in the event of loans repaying? The way I look at it it's more important to have your money earning something, and diversification is a secondary issue to this. After all, the GEIA and GBBA accounts can rebalance themselves as and when diversification opportunities come along. I've raised the matter for discussion at the board meeting tomorrow, it's not something I can unilaterally change or solve.
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Post by crabbyoldgit on Nov 11, 2015 20:02:01 GMT
Hi i am sorry i have been gently trying to raise my concerns over the practicle operation of the geia for some time and if my very amateur understanding is wrong i am sorry,but ac sell a product or service, sell of goods act here, lets just forget the fsa for now in which the proposition document says investers will not be exposed to more than a 20% risk in any single investment in a single loan and it does not.Because the 20% rule is turned off in the case of sales, loans in which there is a small holding can be and in my experiance are sold this means that large 20% loans are left the same value in a now smaller pot hence greater than 20%.Even worse the proposition document states the progam will try and even out the risk spread as far as possible in practice one would expect below 20% but with no new loans and the trading between geia members turned off and the new progam to renable this not implimented nothing is being done to address the problem and it must be growing slowly worse. Now as existing loans repay well its a in my opinion a big can of worms.If a couple of wt was to go bad and the provision fund could not deal with the sitution how would ac like to deal in court the product is deigned for unsophisticated investors.So the judge says you lost more money because your share in the loans exceeded 20% why did you not keep due care to ensure this was not so, because mlord ac decided not provide the information to enable me to know what individual loans at what value i was in and as a 73 year old widow i do not understand spread sheets and to filter verious values and sums.I think a real long look at what is happening in in geia and is likley to occur if the fund reduces in value over time with the compliance officer may be in order. if my fears and understanding are wrong again sorry ,but.
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chrisf
Member of DD Central
Posts: 224 
Likes: 67
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Post by chrisf on Nov 11, 2015 20:14:55 GMT
Hi i am sorry i have been gently trying to raise my concerns over the practicle operation of the geia for some time and if my very amateur understanding is wrong i am sorry,but ac sell a product or service, sell of goods act here, lets just forget the fsa for now in which the proposition document says investers will not be exposed to more than a 20% risk in any single investment in a single loan and it does not.Because the 20% rule is turned off in the case of sales, loans in which there is a small holding can be and in my experiance are sold this means that large 20% loans are left the same value in a now smaller pot hence greater than 20%.Even worse the proposition document states the progam will try and even out the risk spread as far as possible in practice one would expect below 20% but with no new loans and the trading between geia members turned off and the new progam to renable this not implimented nothing is being done to address the problem and it must be growing slowly worse. Now as existing loans repay well its a in my opinion a big can of worms.If a couple of wt was to go bad and the provision fund could not deal with the sitution how would ac like to deal in court the product is deigned for unsophisticated investors.So the judge says you lost more money because your share in the loans exceeded 20% why did you not keep due care to ensure this was not so, because mlord ac decided not provide the information to enable me to know what individual loans at what value i was in and as a 73 year old widow i do not understand spread sheets and to filter verious values and sums.I think a real long look at what is happening in in geia and is likley to occur if the fund reduces in value over time with the compliance officer may be in order. if my fears and understanding are wrong again sorry ,but. And breathe...
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Post by chris on Nov 11, 2015 20:30:10 GMT
crabbyoldgit - as coded the system will sell holdings if they exceed 20% of your holding. Currently the only time that rule is ever disregarded is when trying to withdraw funds from the account, the system tries to distribute sales across all loans you hold but the sales happen individually per loan and there aren't always buyers for each loan.
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Post by crabbyoldgit on Nov 11, 2015 21:16:21 GMT
Fine but i have to much loan b within the fund , another has to much loan f by swapping fund holdings you could keep to the proposition rules and ac do not, we the both funds in effect pay ac to manage our funds to the terms within the proposition statement and you dont.Any simple invester expects the proposition terms to be held to in all situations how, not our problem, its what we pay in a reduced return for. Sorry but how program works is of no interest ,its if it produces the results promised in the propostion statements that counts in all conditions ,full stop, and as you just said it does not.
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Post by chris on Nov 11, 2015 21:49:18 GMT
Fine but i have to much loan b within the fund , another has to much loan f by swapping fund holdings you could keep to the proposition rules and ac do not, we the both funds in effect pay ac to manage our funds to the terms within the proposition statement and you dont.Any simple invester expects the proposition terms to be held to in all situations how, not our problem, its what we pay in a reduced return for. Sorry but how program works is of no interest ,its if it produces the results promised in the propostion statements that counts in all conditions ,full stop, and as you just said it does not. Okay consider this hypothetical. You have precisely 20% of your holdings in 5 loans and now want to reduce your holdings. If the system has to be perfect and cannot sell asymmetrically then you cannot do so. If you have close to 20% of your holdings in each of 5 or 6 loans then again you can only sell small amounts at a time, losing out on the potential to exit as other sellers dominate possible sales. The area that could be improved is how the accounts rebalance across lenders but within the GEIA or GBBA, at the moment that system isn't very aggressive or efficient so as to minimise what could easily be a constant flurry of trades. That'll come in time but there are higher priorities at the moment.
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Post by crabbyoldgit on Nov 11, 2015 21:51:41 GMT
Sorry all conditions a bit ott all practicable managable conditions a more balance statement
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Post by chris on Nov 11, 2015 21:58:01 GMT
Sorry all conditions a bit ott all practicable managable conditions a more balance statement Not at all with more recent investors who are struggling to deploy cash or diversify across more loans. For example what if you have 20% of your cash invested in each of two loans with the rest sat idle. If you withdraw any cash then you breach the 20% rule. Do we mandate that you cannot withdraw money that is sat there until such point as those other loans can reduce their holdings? What if they're suspended from trading or there are no buyers?
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