Investboy
Member of DD Central
Trying to recover from P2P revolution
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Post by Investboy on Nov 26, 2015 11:52:10 GMT
Some people got lucky. I don't invest in 1yr, consider 1mth and 3yr a bit better deals. But maybe will put a punt next time I have some funds
It looks like now there is about 150k <= 4.5% - that is half of available funds, another 150k is for 4.5% to 60%. So in surge of big demand you go through those high yield offers very quickly as each of them has few hundred to few thousand each. So you can go through bands 6%-9% and only raise 10k (as it is atm)
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Post by brokenbiscuits on Nov 26, 2015 12:47:04 GMT
That is truly daft considering I have not matched in the 5 year for over a month now!
I've even dropped to 6.2 to see if it will move.
What I should be doing is placing it in the 1 year at 8%!
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Investboy
Member of DD Central
Trying to recover from P2P revolution
Posts: 564
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Post by Investboy on Nov 26, 2015 16:55:08 GMT
That is truly daft considering I have not matched in the 5 year for over a month now! I've even dropped to 6.2 to see if it will move. What I should be doing is placing it in the 1 year at 8%! Not really. If everyone / most / some do that then it will never happen again. If more people put high(er) bids once demand hits it will have more money in the lender queue and just stop in the 5-6% range. That was possibly once in the lifetime opportunity.
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Post by westonkevRS on Nov 26, 2015 18:58:42 GMT
That is truly daft considering I have not matched in the 5 year for over a month now! I only really look at the monthly and 5-yr markets. But what I can see is that they have consistently been well funded for a few months now, rarely dropping below £1m on offer in either market. I'd noticed there has been quite a lot of lenders patiently waiting at 6.4%/6.5% hoping to get the spikes we saw in the summer. The usual #day21 spike didn't occur as lenders continued to invest more money throughout the month. Perhaps this phenomena has now been arbitraged away.... It could be, and I'm not providing advice on rates, that those previous summer spikes in the 5-year market might not re-occur. Especially now that the end/start of the month is upon us. Although the monthly could spike early December '15 as those "gamers" who got their free £50 remove their money. Kevin.
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agent69
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Post by agent69 on Nov 26, 2015 19:57:04 GMT
That is truly daft considering I have not matched in the 5 year for over a month now! I've even dropped to 6.2 to see if it will move. What I should be doing is placing it in the 1 year at 8%! I've had several nibbles at 5.9% in the 3 year market over the last week. Would prefer 6.5% in the 5 year but currently not going to happen.
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Post by geoffrey on Nov 27, 2015 9:09:05 GMT
I'd noticed there has been quite a lot of lenders patiently waiting at 6.4%/6.5% hoping to get the spikes we saw in the summer. It's the opportunity cost, westonkev. It's just not worth my while locking the money up for 2.5 - 5 years for less than about 6.2%. There are better opportunities elsewhere for similar risk. So I'm happy to sit around that level using RS as a quick-access account for those funds as and when other opportunities arise, or as and when RS makes it worth my while locking up my hard-earned with them. Less than 6% and I'm out of here!
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Post by brokenbiscuits on Nov 27, 2015 17:50:08 GMT
I'd noticed there has been quite a lot of lenders patiently waiting at 6.4%/6.5% hoping to get the spikes we saw in the summer. It's the opportunity cost, westonkev. It's just not worth my while locking the money up for 2.5 - 5 years for less than about 6.2%. There are better opportunities elsewhere for similar risk. So I'm happy to sit around that level using RS as a quick-access account for those funds as and when other opportunities arise, or as and when RS makes it worth my while locking up my hard-earned with them. Less than 6% and I'm out of here! I wrote almost an identical post to this earlier today but connection failed and i couldn't submit it. I've pulled about £600 out of ratesetter in the last 3 weeks. I don't want to leave as an investor but for me the risk/reward doesn't sit right at 5.9 and locked in for 5 years.
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Post by closetotheedge on Nov 28, 2015 11:38:25 GMT
I am mostly an idle observer of the comments on this forum but I read quite regularly of the better opportunities at a similar risk level that are 'elsewhere'. I wish I could find some. At present RS seems the only game in town for investing sensible chunks of cash at 6% with an acceptable risk.
Would anyone like to share with me some of these better offers which I seem to be unable to find. I do not mean the contrived regular saver accounts from the high street where you can only put a few thousand.
Pointers gratefully received.
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bigfoot12
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Post by bigfoot12 on Nov 28, 2015 16:03:22 GMT
I am mostly an idle observer of the comments on this forum but I read quite regularly of the better opportunities at a similar risk level that are 'elsewhere'. I wish I could find some. At present RS seems the only game in town for investing sensible chunks of cash at 6% with an acceptable risk. Would anyone like to share with me some of these better offers which I seem to be unable to find. I do not mean the contrived regular saver accounts from the high street where you can only put a few thousand. Pointers gratefully received. I asked a similar question a few month ago Established platforms paying high rates. I am not recommending any of these, just relaying what I've heard. Some people have managed to put much more than a few thousand into high street banks, by having one for themselves, one for a spouse and one more in joint names. One of the banks used to allow up to four accounts in each name, providing the standing orders/direct debit terms and conditions were met for each. Many people feel more comfortable with secured lending, rather than the unsecured lending at ratesetter. Mostly these days it seems to be bridging loans paying (us) 9%-12%. Popular P2P platforms doing this are Assetz Capital, Thin Cats and from now on Saving Stream. I have done some of this and have had losses, but my total return has probably been higher than RS, but probably not enough to justify the extra effort. Some people are doing bridging loans directly via a private bank or a broker - thought the minimum investment seems to be about £50k and all of that is in one deal, so much more needed if you are going to diversify. P2PGI and VSL are listed investment trusts. They are buying portfolios of P2P loans, targeting a yield higher than RS. These can be bought inside SIPP or ISA which makes them attractive to some. There are lots of non listed funds engaged in the bridging loan type lending, and some have had reasonable payout, but I think that the minimum investment might be £25k+. There are a lot of EIS and VCT wrapped schemes which promise much, but watch out for fees - I have seen schemes in which the manager takes fees about as large as the tax credit. Should I diversify further? is an active thread which discusses one VCT in particular that one forum member likes. There are bond funds with yields higher and lower than RS. The risks are probably higher and lower respectively, but there isn't enough track record to know (the risks of RS). These can often go in a SIPP or ISA. Some people like PIBs though lots got burned in 2007/2008. You will see significant price movements each day, and losses should base rates rise higher or faster than expected. If you tried to exit ratesetter early and rates had risen you would see significant losses too, they are just not as obvious. (With the listed funds you have a chance of gains as well as losses, something not possible on Ratesetter.) Hopefully others will add some more ideas.
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Post by Deleted on Nov 28, 2015 17:14:39 GMT
I guess it is all about "risk acceptable". I feel comfortable lending to asset backed schemes like 1) Gov backed income streams for green energy 2) Hi end retirement/care homes 3) Pawn at LTV ~50% on retail prices but add in a lot of diversity to spread the money around My area of concern with all the various offering is the quality of the asset and the time any portal has to check the reality. Certainly I find I use a de-select process (and I de-select a lot), rather than an selection process. Some portals are struggling with converting the idea of a loan into a loan suitable for their usual characteristics. As such you do need to invest a small amount of time to read the details and just check on this site to see if you've missed the b@@ ding obvious. While you can ask a portal a question about a loan via their direct systems, I have not, in 1 year of investing ever received clarity from any portal and so I would recommend not bothering. The accounts I would look at are (FC no, AC with a large pinch of salt), MT, SS, FS. Of these, fingers crossed, I've not seen many defaults, but time will tell. I keep a simple spreadsheet and budget for 1 to 2% losses each year (varies by portal and 1st year not reached). I now have my full investment in place and as new investments come up I re-invest income, increase diversity or keep my investments as young as possible. (I believe that borrowers are more likely to run out of cash towards the end of a project than at the start so keeping a young loan book should help with defaults). Of my portals to cash out of RS and FC are at the front of my mind. I do think RS has a place in anyone's portfolio but offering less 6% for 5 year loans is not it. Hence as cash is returned I either take 6%+ loans or I cash out. .
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Post by brokenbiscuits on Nov 28, 2015 18:09:58 GMT
Im not going to fall into the trap of suggesting investment opportunities when we probably have very different attitudes to risk. Depends what you mean when you talk of risk as well?
If you lend at 6% fixed, and the borrower's credit situation improves so that he can borrow at 5%, or perhaps rates generally drop at ratesetter, then he is likely to repay you, denying you profit. You could relend at a lower rate again at that time I guess?
If, on the other hand, the interest rate rises to 6.4% plus generally across ratesetter, you cannot renegotiate the fixed-interest offer you made, so you lose the opportunity to get the higher rate. This is not instant access and so if you were uncertain about the rate at the time you are either locked in when rates rise or having to decide to go lower again if they fall.
It seems when most talk about risk they are talking about risk of losing their money. Ratesetter is low risk but not no risk. There are many types of risk. Opportunity risk being one of them.
If I lock in for 5 years at 5.9% and better options or even similar options with lower risk again come along I'm tied up and cannot take the opportunity.
Comparing instant access current accounts to a 5 year loan with massive penalties for early withdrawal is not a good comparison. Perhaps the 1 month and the yearlies could be compared to current accounts at a push.
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Post by closetotheedge on Nov 28, 2015 19:28:35 GMT
Thank you for your responses the amount of detail is much appreciated. Perhaps I have been to narrow in my perspective. As a slightly aging saver and having lived a life putting money into simple cash savings accounts perhaps my net needs to be cast wider.
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Post by brokenbiscuits on Nov 28, 2015 19:56:53 GMT
When you have fewer paydays from now until retirement its always advised to look to capital retention ahead of capital gains to a degree.
If I work to 65 then i have just shy of 400 pay days to top up my position. I could take on more risk, monumentally fail, and still rebuild my position as a person in my 30's.
Ratesetter is a decent return (most of the time) with a good level of security.
It's a decent addition to any balanced holdings of investment.
My frustrations are that I decided to significantly add to my ratesetter holdings just at the time when rates dropped. I was getting 6.5% and intended to increase my total holding in ratesetter by 50% over the next 6 months. That's not happening now at 5.9% but It still may if rates go where I want them to be.
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Post by Financial Thing on Nov 28, 2015 20:35:40 GMT
In my very humble opinion...
I consider Ratesetter a much safer platform option then SS, MT or FS, and am therefore willing to accept a lower rate as a trade off. For me, being able to sleep at night is worth a lower percentage. Having recently received a "our platform is closing and we will try to resell your loans to cash you out" letter from a platform with a short track record, platform safety remains high up on my priority list.
Also I keep the % rates in perspective. The difference on a £1k investment between 6.5% and 5.5% over 5 years is £70. So if you were willing to invest in a safe platform at 6.5% but not at 5.5%, is £70 the reason why when you factor risk into the equation?
A single event occurrence (ex. big default, owner disappearing) could really damage one of these smaller platforms offering 12% whereas I doubt it would affect the larger long standing platforms.
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Post by brokenbiscuits on Nov 28, 2015 20:50:43 GMT
Your opinion is fair, but only considers peer to peer.
For example, some of my money is with neil woodford in an ISA. he achieved 2000% growth in about 20 years with his previous efforts. I could add to my position there and see if he could do something similar. That has instant access.
I have more traditional passive funds. I could add to my position there. That has instant access and historically returned more than ratesetter especially when you consider the tax position.
I own property. I could increase my holding there. Maybe slightly less illiquid but historically, especially when you include "gearing", has grown more than ratesetter.
I hope ratesetter remains one of my core holdings but it is certainly not my only option.
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