jw01
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Post by jw01 on Mar 8, 2016 14:19:28 GMT
In the past the question has been asked what percentage of available cash is held in P2P.
I want to look at it from a different perspective.
During this year more and more of my 5 year fixed rate bonds (6-7%) are maturing, and so far I've been putting the proceeds into a spread of P2Ps.
However, the more I put in the more nervous I get as the % in P2Ps is growing rapidly.
My question, therefore, is this: In the interests of diversification and given no need for immediate access, what other investments do people have which provide a reasonable return? By reasonable, I mean at least 4% (and at that level it would have to be really safe) and preferably higher.
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hazellend
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Post by hazellend on Mar 8, 2016 14:33:23 GMT
Equities, corporate bonds, property
Over the very long term, equities will probably trump everything else
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webwiz
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Post by webwiz on Mar 8, 2016 16:15:39 GMT
IMHO there is not anything that meets your criteria. If anybody knows of one please tell. Equities, bonds and property can all go down as well as up. Really safe investments where the capital is not at risk and are covered by the FSCS will have much lower rates. The best TMK is Santander's 123 account which will pay 3% on £20K. There is a monthly charge which for most is covered by cashback of 1% or 2% or 3% on certain bill payments. Otherwise it is a question of looking at the risk:reward ratio and diversifying as much as possible so that the extra gains earned on investments which do not lose money covers the losses on those that do.
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ben
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Post by ben on Mar 8, 2016 16:19:53 GMT
LLyods have a £5,000 at 4% and monthly saver at (£400) 4%, if married can have 3 in total plus subscription to a magazine or similar which is a nice little bonus
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Post by Deleted on Mar 8, 2016 16:24:33 GMT
Very hard to say, quantative easing has ensured that capital has no value.
Open ended PIBS perhaps?
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webwiz
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Post by webwiz on Mar 8, 2016 17:22:01 GMT
The price of any traded fixed interest instrument will generally move in the opposite direction to interest rate. From now interest rates have practically no room to fall so can only go up which means that values will fall. Some bonds can be kept to term to avoid a capital loss if you do not require access to the funds.
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jw01
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Post by jw01 on Mar 8, 2016 17:46:38 GMT
Thanks for the replies so far.
I am prepared to accept an equivalent level of risk to P2Ps for an equivalent return in the interest of diversification.
The comment about corporate bonds sent me on a search as I know nothing about them.
The first item I came across was the Shenton Asset-Backed Bond quoting 9% pa for 2 years; a Singapore organisation entering UK for the first time, they say that in 4 years all 10,000 of their customers have been paid completely and on time.
That sounds promising, but I need to understand more about this area.
Can anyone recommend comparison sites and/or forums/fora such as this one.
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registerme
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Post by registerme on Mar 8, 2016 18:19:17 GMT
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alanp
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Post by alanp on Mar 8, 2016 20:11:46 GMT
There is an extensive set of threads on the moneysavingexpert Savings & Investment forum that sets out the various mainstream FSCS protected bank accounts that pay a reasonable level of interest (3-6%). These include Current Accounts and Regular Savers along with information on how to meet the required "terms" e.g. DDs, minimum amounts to pay in each month.
It takes a bit of effort to set lots of them up but some people have done it - couples can get >£100k into 3% and higher accounts.
There are also threads on there re various Bonds and the like.
Might be worth investing a couple of hours in going through some of them
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Post by ablrateandy on Mar 8, 2016 20:24:19 GMT
Please be aware that there is a world of difference between mini-bonds (which are fundamentally no different to p2p lending and in many cases less liquid) and "corporate bonds". The Shenton bond is a mini-bond in a borrower that is effectively outside the UK and dealing in property outside the UK. A corporate bond is : (a) listed on a recognised stock exchange (b) tradable so that you can buy and sell holdings (c) eligible because of (a) to be in your ISA or SIPP Have a look at the retail bonds on the LSE's ORB platform where there are secondary markets that you can buy and sell bonds on because those bonds are listed and regular accounts are provided to the LSE. Bonds, typically, involve exposure to one client, but certainly have a look at some corporate bond funds - some HY funds now yield higher than some P2P, have diversification and you can easily buy and sell your holdings. Some people on here are much better versed on these than me ( Financial Thing springing to mind). |
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Post by bracknellboy on Mar 8, 2016 21:41:01 GMT
...You're still picking up pennies in front of a steamroller though ... I remember you using the phrase before. And I love it. Not sure where I need to 'post it up' to keep it at the forefront of my mind
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Post by ablrateandy on Mar 8, 2016 22:13:52 GMT
Apologies. I meant to tag samford71 in this too! Much better knowledge than me on this. My first job was at Salomon with some of the Liars Pokers legacy guys. |
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registerme
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Post by registerme on Mar 8, 2016 22:34:36 GMT
The first book I read about finance was Liars Poker. The first interview I had in finance was with Salomon Brothers. Didn't get the job. They said it was because the headcount was removed. I suspect it was because I turned up with the annual report before the interviewers had seen it. Let's call it a combination of the two  . The last (good*) film I saw was The Big Short (almost as good as the book). The main reason I didn't like it was because I know the person who's mug was in the last shot. For all he did wrong, to present him that way, in that film, in that context, was.... inaccurate. FX carry trades are another good examples of pennies and trains. Japanese housewives have proved to be one of the heaviest and fastest trains going. Going against them has been proved to be painful  . Mind you, according to the last census the population was a million less than previous census. Maybe that trade will come good one day. * I saw The Revenant at the weekend. My advice, don't bother. |
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locutus
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Post by locutus on Mar 8, 2016 22:47:39 GMT
Sounds like a few of you have quite impressive career histories and are obviously very financially astute. For the benefit of the less experienced, would you share info on your other investments outside P2P? I believe that was the OP's original objective and would be educational for the rest of us.
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Post by Financial Thing on Mar 9, 2016 0:15:07 GMT
The price of any traded fixed interest instrument will generally move in the opposite direction to interest rate. From now interest rates have practically no room to fall so can only go up which means that values will fall. Some bonds can be kept to term to avoid a capital loss if you do not require access to the funds. Possibly true but also income rises to offset short term value drops. Interesting read explaining this: insights.schwab.com/fixed-income/investing-bonds-looking-bonds-vs-bond-funds-now
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