j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Jan 14, 2016 12:09:44 GMT
What would be a safe alternative? Ultra-short dated gilts? Depending on the size of crash we're talking about, have you considered bottled water, tinned food and camping-gaz cylinders? Swiss army knife? (made in China,of course  )
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Jan 14, 2016 12:14:33 GMT
What would be a safe alternative? Ultra-short dated gilts? Gold? I’ve still got some in my portfolio. Over the long term, gold produces a lower return than say property.I'll try to relocate the comparison chart I saw the other day to illustrate this
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Jan 14, 2016 12:17:06 GMT
The only two positive stocks were Smith & Wesson and HJ Heinz. At least it gave us a chuckle. So you can f**t yourself to death?! 
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jan 14, 2016 12:23:43 GMT
The mantra "If it looks too good to be true it probably is" has some truth to it. However the corollary that if the interest rate is lower it must be safer is harder to justify. Property backed loans valued by professional, insured valuers at the same LTV must, IMHO, be equally safe regardless of the interest rate. This is not to say that the borrowers are of equal standing and it may be that the borrower paying the higher rate is more likely to default leading to a delay in the return of funds to lenders. Personally I would prefer to have a well diversified portfolio paying 12% than one paying a lot less, simply because I see no reason why the lower paying one should be any safer.
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Jan 14, 2016 12:32:41 GMT
Gold? I’ve still got some in my portfolio. Over the long term, gold produces a lower return than say property.I'll try to relocate the comparison chart I saw the other day to illustrate this  
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jan 14, 2016 14:54:30 GMT
SavingStream are coming to the rescue with 1000 acres of farmland. That can't crash, we all need to eat.
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registerme
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Post by registerme on Jan 14, 2016 15:09:29 GMT
Until somebody sticks 2000 houses on it.....
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Post by ablrateandy on Jan 14, 2016 15:14:13 GMT
Kill two birds with one stone and make them gingerbread houses?
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pikestaff
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Post by pikestaff on Jan 14, 2016 16:02:46 GMT
...hoarding cash will be worthless in the long run once inflation gets back to normal levels... I tend to the view that the rest of the developed world is becoming like Japan and 0-2% is the new normal. However, time will tell. Government would prefer that inflation was 3-4%, missing the official target on the high side but not by enough to frighten the horses. I think they will struggle to get it there, but factor the possibility of rates up to 5% into my personal projections, just in case.
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pikestaff
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Post by pikestaff on Jan 14, 2016 16:10:59 GMT
...Property backed loans valued by professional, insured valuers at the same LTV must, IMHO, be equally safe regardless of the interest rate... I don't think that's remotely true. Even if they are all first charges (not all are), some properties will have much more uncertain values than others, be more or less likely to find a buyer in a reasonable period, etc etc. And there are many different measures of market value. Always understand the property and look very carefully at the basis of, and the assumptions in, the valuation - especially if lending on development property or anything unusual.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jan 14, 2016 16:42:58 GMT
...hoarding cash will be worthless in the long run once inflation gets back to normal levels... I tend to the view that the rest of the developed world is becoming like Japan and 0-2% is the new normal. However, time will tell. Government would prefer that inflation was 3-4%, missing the official target on the high side but not by enough to frighten the horses. I think they will struggle to get it there, but factor the possibility of rates up to 5% into my personal projections, just in case. What the government should do is include house prices in the inflation figures.
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Post by westonkevRS on Jan 14, 2016 18:39:45 GMT
Hi, I'm not going to go into detail at this point but the Provision Fund is not all in a single bank account, and it isn't all in a simple cash savings accounts. The priority however is security of capital and access (i.e. liquidity). Any benefit is reinvested into the Provision Fund for the safety of lenders. There is ongoing thinking on the best to way to report more clearly specifics on how Provision Fund is vested, but no decision has been made on the best way to disclose this data. I don't want to give a timescale as nothing is defined, other than " in the not too distant future". Kevin.
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oldgrumpy
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Post by oldgrumpy on Jan 14, 2016 18:48:46 GMT
I tend to the view that the rest of the developed world is becoming like Japan and 0-2% is the new normal. However, time will tell. Government would prefer that inflation was 3-4%, missing the official target on the high side but not by enough to frighten the horses. I think they will struggle to get it there, but factor the possibility of rates up to 5% into my personal projections, just in case. What the government should do is include house prices in the inflation figures. Government will adapt the method of calculating inflation figures in any way they like, as long as it suits their agenda, and whatever they do they will always say it is better. Just now it is not convenient to include the cost of housing in inflation figures, despite the fact that it is the biggest part of nearly everyone's actual living costs.  Oh, sorry - that's old news 
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littleoldlady
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Post by littleoldlady on Jan 14, 2016 19:41:05 GMT
...Property backed loans valued by professional, insured valuers at the same LTV must, IMHO, be equally safe regardless of the interest rate... I don't think that's remotely true. Even if they are all first charges (not all are), some properties will have much more uncertain values than others, be more or less likely to find a buyer in a reasonable period, etc etc. And there are many different measures of market value. Always understand the property and look very carefully at the basis of, and the assumptions in, the valuation - especially if lending on development property or anything unusual. All these factors should be considered by the valuer. I am not competent to dissent from his judgement. But even if you are right and some asset values are more reliable than others why should these be the ones paying the least interest? The credit status of the borrower will carry more weight than the asset value when determining the interest rate.
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Post by chris on Jan 14, 2016 22:14:08 GMT
I don't think that's remotely true. Even if they are all first charges (not all are), some properties will have much more uncertain values than others, be more or less likely to find a buyer in a reasonable period, etc etc. And there are many different measures of market value. Always understand the property and look very carefully at the basis of, and the assumptions in, the valuation - especially if lending on development property or anything unusual. All these factors should be considered by the valuer. I am not competent to dissent from his judgement. But even if you are right and some asset values are more reliable than others why should these be the ones paying the least interest? The credit status of the borrower will carry more weight than the asset value when determining the interest rate. My understanding is limited but from what I know that isn't even remotely true. The value could be for vacant possession, the land value alone, the expected value upon completion, the value before works have commenced, the estimated minimum value throughout the development of the property, etc. Depending on the type of valuation being instructed the LTV can start off at a reasonable level but then spike upwards over 100% as development work starts before steadily decreasing as that work is completed. It's not unusual for credit reports to even quote more than one LTV where different methodologies have been used. The main factors governing pricing for borrowers are the probability of default, the loss given default, and the cost of capital. The more reliable the valuation the tighter the calculation on for loss given default, the lower the credit risk should the LTV have sufficient margin. A more volatile valuation even with the same LTV and the range for loss given default (best case vs worst case) will increase which has a knock on effect on the rate to account for that risk. If all loans with a badge on them saying 70% LTV with property as the asset are the same then why are bridging loans so expensive for borrowers? This is well outside my area of expertise but if you want to put some specific questions to me on this then I'll happily speak to our credit team to get answers. Please be as clear as you can though.
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