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Post by henders on Jul 22, 2016 9:17:23 GMT
Thank you; got it now.
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Post by stevefindlay on Jul 22, 2016 10:35:18 GMT
Not that I want to do this but I can't see anywhere on the BM site any automated mechanism or information on how to "sell-out" if one wanted to get their money back. Any idea what the mechanism is? If you click on the Withdraw button (top left of the summary page), it offers the option to liquidate some or all of your funds. I have not used it. I seem to remember the website rather vaguely says they may charge up to 2% for liquidating but I could not find any more specific explanation of this charge. Thanks both - that's right you can request to liquidate your portfolio and withdraw funds at any point. You may like to see this article on liquidityRegarding the withdrawal fee - that is just a protection to stop short-term investors - day traders; coming in and out each day / week and abusing & breaking the system. We've not charged it to any client to date, and if you fall within this category - you will be contacted beforehand to discuss any withdrawal fee that may be due on subsequent withdrawals. We hope to never have to send that email or charge a withdrawal fee.
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locutus
Member of DD Central
Posts: 1,059
Likes: 1,622
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Post by locutus on Jul 22, 2016 10:43:17 GMT
If you click on the Withdraw button (top left of the summary page), it offers the option to liquidate some or all of your funds. I have not used it. I seem to remember the website rather vaguely says they may charge up to 2% for liquidating but I could not find any more specific explanation of this charge. Thanks both - that's right you can request to liquidate your portfolio and withdraw funds at any point. You may like to see this article on liquidityRegarding the withdrawal fee - that is just a protection to stop short-term investors - day traders; coming in and out each day / week and abusing & breaking the system. We've not charged it to any client to date, and if you fall within this category - you will be contacted beforehand to discuss any withdrawal fee that may be due on subsequent withdrawals. We hope to never have to send that email or charge a withdrawal fee. Can you give more information on the circumstances that would cause you to charge a withdrawal fee?
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Post by stevefindlay on Jul 22, 2016 11:00:23 GMT
Replying to a few comments on portfolio mix & rates: (thank you - henders paul123 fp housepriceanalytics bluechip et al) Objective: our aim is to enable Clients to get an attractive risk-adjusted return. Not the maximum possible return. We've run detailed analysis over thousands of loans across multiple platforms and years, and feel that 7.0% p.a. (net of our 1.0% fee) is a sensible target in the current economic environment. This number may go up or down over time, but we hope to keep it reasonably stable, and at a very attractive premium to "high interest" savings accounts - e.g. +4-5%. Loan rates in the portfolios: a little while after launching we wrote this article on rates and returns, discussing in the 7.0% p.a. target return. At that time we felt 6.0% would be towards the lower end of a single loan rate; but we are comfortable with accepting lower rates (e.g. 5.5%) if we feel the risk is suitable in return. It is true that for every 5.5% loan we need another loan of at least 10.5% to compensate (i.e. they average at least 8.0% gross); so we do consider this implication as well when considering which loans to bring onto our platform. We have access to a good volume of loans at 9-12% though, so we can afford to take 5-7% loans as well. Diversification: it is also worth noting, that, for example, we would probably rather have 3 loans at 5.5% than 1 loan at 6.0%; subject to the overall targets being met. As the increased diversification is also a very helpful risk-mitigant. A few final thoughts:(1) You can't turn bad credit into good credit by charging higher rates: we've all seen P2P Platforms with 3+ year corporate loans or bonds to start-ups and small companies priced at 15-18%+ p.a. These tend to end up with 10-30% default rates and zero recovery. We will have defaults, but not because we've invested in these types of loans. (2) Resist the greed temptation: we are aiming to build a long-term sustainable, attractive product. The underlying credit needs to be sound, and so we will resist the temptation to try and drive the 7.0% target higher and higher. In our opinion, 7.0% is a very good risk-adjusted return in the current economic environment. (3) You can always add your own risk(!) : if you are still very keen on increasing your returns via BondMason, then ( and this is not advice) you can always borrow money to leverage your own returns. I.e. borrow at 3% p.a.+ and then leverage your own investment through BondMason to get closer to 10%-11%+. This is not for the faint-hearted though, as your value-at-risk is more than your initial investment amount, and you should always discuss your finances with an IFA or suitably qualified investment professional etc.
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Post by stevefindlay on Jul 25, 2016 16:35:11 GMT
Thanks both - that's right you can request to liquidate your portfolio and withdraw funds at any point. You may like to see this article on liquidityRegarding the withdrawal fee - that is just a protection to stop short-term investors - day traders; coming in and out each day / week and abusing & breaking the system. We've not charged it to any client to date, and if you fall within this category - you will be contacted beforehand to discuss any withdrawal fee that may be due on subsequent withdrawals. We hope to never have to send that email or charge a withdrawal fee. Can you give more information on the circumstances that would cause you to charge a withdrawal fee? Of course - if we found a client repeatedly withdrawing their funds, then reinvesting, and then withdrawing again etc - all within the space of a week or so. In this case we would (i) contact the client first to let them know that a withdrawal fee may be payable, and what it would be and then (ii) allow them to re-confirm that they wish to withdraw their funds. As per my previous response, it is intended to deter any "day traders" from operating through our system.
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