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Post by brianac on May 29, 2016 18:57:32 GMT
Can someone translate all this thread for us <Proles> please? Brian Returns on P2P lending are around 7% to 9% long term for everyone regardless of platform except the very skilled or very lucky. and therefore less for us "unlucky ones" :-0 Brian (Thx btw)
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Greenwood2
Member of DD Central
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Post by Greenwood2 on May 29, 2016 19:04:25 GMT
Call it guesswork.
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Post by harvey on May 29, 2016 19:06:47 GMT
Yes with the greatest respect to the thread starter who shared his Formula with us, I would say that it's a Risky Business. I don't have a magic formula or any top level risk management financial strategy but I know that if an investment is offering you a 12% return that it comes with quite a bit of risk and you have to be willing to accept that, to never think you will come out the other end having achieved 12% overall and of course you have to do your own due diligence checks on everything you invest in and avoid anything that doesn't smell right to you.
Then there is good day to day management of your accounts and that can reduce your risk a little bit. For example be diversified as you can and try and sell loan parts before they reach maturity.
of course somebody who has been investing with saving stream for a couple of years could exit now and they would have achieved a full 12% return for 2 years and they would have cracked the system in a way but for longer term investors when you look at the longer-term picture if you can get something close to 10% or even 8 or 9% then you can't deny thats still pretty good going.
My advice to anyone would be to say I'm going to try and get a 9% return on my investments and if you do better than that then regard it as a bonus and Pat yourself on the back for your excellent Financial Management skills. And your good luck.
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ben
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Post by ben on May 29, 2016 19:12:57 GMT
Yes with the greatest respect to the thread starter who shared his Formula with us, I would say that it's a Risky Business. I don't have a magic formula or any top level risk management financial strategy but I know that if an investment is offering you a 12% return that it comes with quite a bit of risk and you have to be willing to accept that, to never think you will come out the other end having achieved 12% overall and of course you have to do your own due diligence checks on everything you invest in and avoid anything that doesn't smell right to you. Then there is good day to day management of your accounts and that can reduce your risk a little bit. For example be diversified as you can and try and sell loan parts before they reach maturity. of course somebody who has been investing with saving stream for a couple of years could exit now and they would have achieved a full 12% return for 2 years and they would have cracked the system in a way but for longer term investors when you look at the longer-term picture if you can get something close to 10% or even 8 or 9% then you can't deny thats still pretty good going. My advice to anyone would be to say I'm going to try and get a 9% return on my investments and if you do better than that then regard it as a bonus and Pat yourself on the back for your excellent Financial Management skills. And your good luck. I am aiming for about 7/8% from p2p but then the majority of mine are in the lower paying ones with a smaller amount in SS and the like.
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Post by brianac on May 29, 2016 19:21:59 GMT
I'll settle for that. Brian
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Post by GSV3MIaC on May 29, 2016 21:46:35 GMT
Can someone translate all this thread for us <Proles> please? Brian Returns on P2P lending are around 7% to 9% long term for everyone regardless of platform except the very skilled or very lucky. For 'around' read 'not more than' .. you can lend on Zopa or RS with absolutely no chance of getting 7%-9%. None, nada, zilch. Even on FC you might struggle to get 9%, although 7% is doable. My partner managed about 17% on FC, by selling (at a small profit) before the knee in the default curve, and back when you could get 14.x% on a halfway sane loan if they borrower was in a rush. No more, sadly.
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Post by earthbound on May 29, 2016 21:54:35 GMT
.... I am delighted that you have devised an infallible formula and hope that you earn a huge amount of money on the back of it and don't incur any defaults along the way. You could further capitalise on this by setting up your own P2P platform. I am also sure that you will have every bank in the world hammering down your door offering you billions for the formula. Heart felt Congratulations! Eh? Wots this? Has the the Horace Batchelor of P2P just been "outed"? Wannabe my friend?  belly laughs.... i luv em. ta
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Post by earthbound on May 29, 2016 22:03:06 GMT
That's Kensham ..K-E-Y-N-S-H-A-M ... aww bugger your way ahead of me  but catchin up fast...
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boble
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Post by boble on May 30, 2016 17:30:38 GMT
Yes with the greatest respect to the thread starter who shared his Formula with us, I would say that it's a Risky Business. I don't have a magic formula or any top level risk management financial strategy but I know that if an investment is offering you a 12% return that it comes with quite a bit of risk and you have to be willing to accept that, to never think you will come out the other end having achieved 12% overall and of course you have to do your own due diligence checks on everything you invest in and avoid anything that doesn't smell right to you. Then there is good day to day management of your accounts and that can reduce your risk a little bit. For example be diversified as you can and try and sell loan parts before they reach maturity. of course somebody who has been investing with saving stream for a couple of years could exit now and they would have achieved a full 12% return for 2 years and they would have cracked the system in a way but for longer term investors when you look at the longer-term picture if you can get something close to 10% or even 8 or 9% then you can't deny thats still pretty good going. My advice to anyone would be to say I'm going to try and get a 9% return on my investments and if you do better than that then regard it as a bonus and Pat yourself on the back for your excellent Financial Management skills. And your good luck. Harvey, I'm just a little confused, as my original post at the head of this thread was to clearly point out to those who may have been blissfully unaware, that P2P lending certainly carries risk and that this should be factored in to the anticipated net returns.
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gnasher
Member of DD Central
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Post by gnasher on Jun 1, 2016 4:09:29 GMT
Can someone translate all this thread for us <Proles> please? Brian Returns on P2P lending are around 7% to 9% long term for everyone regardless of platform except the very skilled or very lucky. Indeed, well said, and of course that only applies to self pick loans, not PF protected black box affairs like RS, AC GBBA et al. Although I invest in SS I have always felt a bit uneasy about it and keep my account to about 30% of what I have invested in other platforms. This is based on no more than that old adage "if something seems to good to be true it probably is". A reliable PF protected 12% is frankly too good to be true. I think some SS investors have been displaying an irrational exuberance and level of confidence. This default may restore some needed sanity. When some of the bigger loans go tits up, as they probably will, SS could be a pretty ugly place to have your money.
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Post by p2plender on Jun 1, 2016 4:45:34 GMT
"When some of the bigger loans go tits up, as they probably will, SS could be a pretty ugly place to have your money."
Well at least it'll free up the sm a bit...
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Post by solicitorious on Jun 1, 2016 8:58:43 GMT
This is a very complicated subject, and players in the P2P market would have different views and subjective risk models. I came from a quantitate background and in my mind I would like to build a quant model to address every possible risk factors and quantify them. When all data as crunched it will give me scores and I will exit from high risk and enter low risk loans. Loans not meeting minimum requirements will never be considered. These loans has fixed income but definitely not fixed income securities as they are not interest rate sensitive and hence has no yield curve as such. Or the yield curve is flat. But I am sure every one on SS recognise the main risks are credit risk and early repayment (reinvestment) risk and liquidity risk. It is then upto everyone of us to quantify, or qualify, them. Another point, when your return is fixed at 12%, the individual loan sharpe ratio is very easy, you don't even need the 12% to calculate in order to compare, the lower risk the higher sharpe will be. The question becomes, what is your calculated risk to input to sharpe ratio? But if you like consider a portfolio wide sharpe, then correlation come in play. What do you think, in normal market, the risk correlation between loans? Is 0 a good assumption? You got the idea, if you know the idea of Sharpe. I therefore think sharpe is bit overkill to assess, because there is only one driving factor, risk; risk adjusted return assessment is unnecessary. My view anyway. Have you seen this? p2pindependentforum.com/thread/4585/faq-newbies-read-post-answers?page=2&scrollTo=99227
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but catchin up fast... 
