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Post by brokenbiscuits on Jan 2, 2016 13:15:12 GMT
I'm doing my rough budget today for 2016.
Everything I significantly invest in apart from SS is straight forward, I invest as much as I like when I like. Obviously that's not the case here.
I know this might be a bit like asking where the FTSE 100 will be in a year from now, but I wonder if some veterans or even SS themselves could give a indication of expected loan frequency for an average month.
Based on 2015 it would be about 4 a month?
So say, for arguments sake, i like the look of every loan over 2016 and invest in every one an even amount of, say, an even £100 in each.
Would you say budgeting to put £400 into a instant access current account, ready to invest as and when loans come up is about right.. Or do you consider there will be more or less than 48 in 2016?
Appreciate I'm really asking for opinions here rather than facts.
Cheers
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ben
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Post by ben on Jan 2, 2016 14:03:12 GMT
I assume you have a plan of how much you want to invest over the year? I would just keep a month or so of that amount easily available and then top it up every so often
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ablender
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Post by ablender on Jan 2, 2016 14:07:44 GMT
The way I do it is to get my money invested in whatever is available, even if momentarily I go above what I want in a particular loan. As new availability arises then I diversify. I think this is better than leaving the money sitting in an instant access account.
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ben
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Post by ben on Jan 2, 2016 14:17:45 GMT
The way I do it is to get my money invested in whatever is available, even if momentarily I go above what I want in a particular loan. As new availability arises then I diversify. I think this is better than leaving the money sitting in an instant access account. I agree at moment although if they keep doing 4 loans a week at some point the secondary market will not be as busy, however I do not see this happening for a bit yet
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SteveT
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Post by SteveT on Jan 2, 2016 14:22:27 GMT
I'm doing my rough budget today for 2016. Everything I significantly invest in apart from SS is straight forward, I invest as much as I like when I like. Obviously that's not the case here. I know this might be a bit like asking where the FTSE 100 will be in a year from now, but I wonder if some veterans or even SS themselves could give a indication of expected loan frequency for an average month. Based on 2015 it would be about 4 a month? So say, for arguments sake, i like the look of every loan over 2016 and invest in every one an even amount of, say, an even £100 in each. Would you say budgeting to put £400 into a instant access current account, ready to invest as and when loans come up is about right.. Or do you consider there will be more or less than 48 in 2016? Appreciate I'm really asking for opinions here rather than facts. Cheers The quickest way to get invested in new loans is to buy a larger amount in the first few loans and then progressively diversify as more new loans are launched. Taking your 48 figure (which is probably not far off), you might invest £800 in each of the first 6 loans. Then £400 in the next 6, selling £400 of the first 6 each time to pay for them. Then £200 of the next 12 (selling £200 each time). Finally £100 of the next 24, at the end of which you'll have £100 in 48 loans. In theory you're carrying higher risk at first but, since SS retain interest from the amount advanced at drawdown, the actual risk of a loan defaulting in the first few months is pretty small (IMO)
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littleoldlady
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Post by littleoldlady on Jan 2, 2016 17:32:23 GMT
I'm doing my rough budget today for 2016. Everything I significantly invest in apart from SS is straight forward, I invest as much as I like when I like. Obviously that's not the case here. I know this might be a bit like asking where the FTSE 100 will be in a year from now, but I wonder if some veterans or even SS themselves could give a indication of expected loan frequency for an average month. Based on 2015 it would be about 4 a month? So say, for arguments sake, i like the look of every loan over 2016 and invest in every one an even amount of, say, an even £100 in each. Would you say budgeting to put £400 into a instant access current account, ready to invest as and when loans come up is about right.. Or do you consider there will be more or less than 48 in 2016? Appreciate I'm really asking for opinions here rather than facts. Cheers The quickest way to get invested in new loans is to buy a larger amount in the first few loans and then progressively diversify as more new loans are launched. Taking your 48 figure (which is probably not far off), you might invest £800 in each of the first 6 loans. Then £400 in the next 6, selling £400 of the first 6 each time to pay for them. Then £200 of the next 12 (selling £200 each time). Finally £100 of the next 24, at the end of which you'll have £100 in 48 loans. In theory you're carrying higher risk at first but, since SS retain interest from the amount advanced at drawdown, the actual risk of a loan defaulting in the first few months is pretty small (IMO) I guess that's the strategy most of us have used, very successfully so far. But is does depend on the SM retaining it's liquidity. If buyers ever dry up you could be stuck with loans in which you are overweight.
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adrianc
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Post by adrianc on Jan 2, 2016 18:10:54 GMT
The way I do it is to get my money invested in whatever is available, even if momentarily I go above what I want in a particular loan. As new availability arises then I diversify. I think this is better than leaving the money sitting in an instant access account. I agree at moment although if they keep doing 4 loans a week at some point the secondary market will not be as busy, however I do not see this happening for a bit yet Don't forget about the effect of loans repaying... There's £7.25m overdue right now, and another £4m due in the next 60 days - before we consider those loans which might repay early, predicted by updates or not. That's almost exactly the same amount of money as the pipeline.
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Post by brokenbiscuits on Jan 3, 2016 12:11:04 GMT
Thanks for the replies.
I don't have a lump sum right now.
I'm one of those frugal types that invests a large percentage of my pay each month the day I get paid.
Obviously with SS its possible that there could be nothing to invest in on or around payday and that's why I was saying about holding the funds allocated for SS in a instant access account...
I had considered trying to get the entire months allocation into the first loan that pops up, then just using the SM to even out the spread when the next (3?) Loans appear that month, but was concerned about getting stung.
The recent loan that didn't fully subscribe... Did anyone over bid and if so how difficult was it to sell off the bits you didn't want?
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star dust
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Post by star dust on Jan 3, 2016 13:19:11 GMT
The quickest way to get invested in new loans is to buy a larger amount in the first few loans and then progressively diversify as more new loans are launched. Taking your 48 figure (which is probably not far off), you might invest £800 in each of the first 6 loans. Then £400 in the next 6, selling £400 of the first 6 each time to pay for them. Then £200 of the next 12 (selling £200 each time). Finally £100 of the next 24, at the end of which you'll have £100 in 48 loans. In theory you're carrying higher risk at first but, since SS retain interest from the amount advanced at drawdown, the actual risk of a loan defaulting in the first few months is pretty small (IMO) 6 out of the current 9 pipeline loans are =<£1m so if SS implement their "new" stated pre-fund policy and any of these are the first loans out of the stable then you're being a tad optimistic to expect to get £800 in each IMO  . As as a general policy though brokenbiscuits, I would use pre-fund (including bidding for more than intending to hold long term) and also buy what you can when you can, selling down later. Right now there is no problem selling anything, but you would need to bear in mind that this could change at any moment, and so make sure you're happy to hold what you do buy if needs must.
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ben
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Post by ben on Jan 3, 2016 15:11:03 GMT
Thanks for the replies. I don't have a lump sum right now. I'm one of those frugal types that invests a large percentage of my pay each month the day I get paid. Obviously with SS its possible that there could be nothing to invest in on or around payday and that's why I was saying about holding the funds allocated for SS in a instant access account... I had considered trying to get the entire months allocation into the first loan that pops up, then just using the SM to even out the spread when the next (3?) Loans appear that month, but was concerned about getting stung. The recent loan that didn't fully subscribe... Did anyone over bid and if so how difficult was it to sell off the bits you didn't want? I did not overbid at time but for one reason or another I wanted to get rid of a bit and sold it within seconds although was only a few hundred so I would not expect that to be an issue. I do not buy into every loan only the ones I think would get about the loan value on sale which is not many as most of there valuations are a bit generous
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merlin
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Post by merlin on Jan 3, 2016 15:16:50 GMT
Well said @star dust. However as always there is the small problem of a couple of elephants in the room. In this case in the shape of a big floating gin palace and a near stately home both of which just might end this coming week or shortly there after if we are to believe SS. These would yield a tidy sum and the resulting free cash will be urgently looking for a new home. Add to these a couple of other loans running late and others due to finish imminently and there could be quite a lot of cash circulating.
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Post by Deleted on Jan 3, 2016 15:32:52 GMT
There is of course a danger in the invest big and diversify strategy...
If I were budgeting the way the OP suggested I'd work on 4 or 5 a month, but then I'd also budget on MT doing say 3 or 4 a month and accept that at any one time one will be down and one up.
What I did in 2015 was budget into two chunks, the 12% portals with assets and the 9.5% portals and let the portals battle it out over who got the money, while I limited every loan to £1k max aiming for 1% of total per loan.
The timing issues are actually pretty important. MT is very fast which must hurt busy people, SS at least give 24 hours to sort it out. Neither is a problem to me as I'm time rich and that makes MT a more attractive option, money in and invested in the same 4 hour period.
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