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Post by eascogo on Feb 10, 2016 1:22:59 GMT
One third of my total is outside P2P in S&S trackers. That dipped badly over the last couple of months but should bob up eventually (may take a couple of years). Another third is invested long-term with Wellesley at 7%: excellent for passive investors. The remaining third is in FC, FS, MT, RS, and Z (now nearly empty). I bear a light grudge against FC on finding out (thanks to this forum) that activity by investors on the SM "helped" to concentrate my share of problem loans (my 5-yr return is 5.4% after fees and bad debts) but really my fault for poor homework. I reduced my holding in Z to nearly zero to reinvest with FS and MT. The cost of selling is absorbed fairly quickly by the higher interest. I am not convinced it is necessary to diversify over a large number of platforms as none are immune to market shocks and it is tedious to have to follow them all up. Could you explain the SM activity on FC that caused the light grudge please, or tell me where on this forum to look for details. Hi gusgorilla, I invested in FC over 2012 and 2013 on a 5-year basis, all risk bands, with autobid enabled. In my mind the SM was to allow liquidity but I took no further interest. However this forum alerted me to a strategy of (a) routinely selling loans well before end of term and/or (b) do research to help filter out loans likely to default. Perfectly legitimate but has the effect of loading onto the SM a disproportionate share of loans that may default but are being reinvested via autobid. A number of comments on this forum support this view. However could the remedy be in setting autobid Secondary Offer Rate at the highest possible rate for all risk bands? Would autobid then draw only from the PM? Is this assumption correct?
The platform gives my returns as follow: Gross yield: 8.7%. Annualised return (after fees and bad debts): 5.4%. Estimated fully diversified return (after fees and bad debts): 5.8%. (Losses amount to 30% of total interest after fees). Of course recoveries may still alter results but forum members have mentioned far higher returns (IIRC 10%-12%).
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Post by gusgorilla on Feb 10, 2016 2:27:18 GMT
Hi eascogoThanks. I started recently on FC and did just what you suggest with the autobid because the SM looked so scary and hard to understand. I think it worked because all the remaining payments are whole years so most likely off the PM. My main problem is the large number of 5 year loans I picked up. I will sell these and reinvest by hand I think. Hard work. I assume the absence of options like loan duration and LTV in autobid is to prevent certain loans such as 5 year being left on the shelf. |
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