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Post by moneymagnet on Jul 16, 2016 21:34:48 GMT
Being fairly new to FS, and thinking I have a good strategy that will work for me, I was wondering what strategies more experienced investors use to maximise their returns.
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ben
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Post by ben on Jul 16, 2016 21:40:35 GMT
I only ever invest in what I intend to hold.
Unless you are a business owner or pay no tax then buying on the secondary market makes very little sense. I think a few people will get a rather large shock in future, probably not forum members as it has been discussed to death but casual investors.
I invest in very few loans on FS as I do not feel there set up right. There has been some very good loans which I have happily invested but most of them if things go badly the asset will not be sufficent to cover any losses. There is also to many for anybody to do sufficint DD.
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hendragon
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Post by hendragon on Jul 17, 2016 10:13:24 GMT
fat finger please see below  |
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hendragon
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Post by hendragon on Jul 17, 2016 10:16:06 GMT
Just about an exact match with the previous post. I have in the past, also moved on from Zopa,AC,FC (long time ago) and am running down my RS investments. It is often true that good, new platforms offer the best returns. Success can alter their business models as has happened with AC and FS. Should FS manage their defaulted loans well I would consider increasing investment. Should you be less happy with a platform than you once were the simply leave any profits invested and withdraw the capital. At least you keep and eye on things and can easily re-invest in the future.
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stevio
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Post by stevio on Jul 17, 2016 19:26:55 GMT
Be interesting see what level of risk people think each strategy holds?
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ben
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Post by ben on Jul 17, 2016 20:35:08 GMT
Each strategy will have different risk depending on your tax situation. As a high rate tax payer I will be better of selling at a discount close to end of term. For certain type of people ie ones that pay no tax or some companies they will better of buying at discount close to end of term (providing security is good).
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stevio
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Post by stevio on Jul 17, 2016 21:51:30 GMT
Each strategy will have different risk depending on your tax situation. As a high rate tax payer I will be better of selling at a discount close to end of term. For certain type of people ie ones that pay no tax or some companies they will better of buying at discount close to end of term (providing security is good). The risk is still the same despite your tax, the returns and hence the reward is different though Selling close to end thought decrease risk default, but normally need discount, so returns lower Buying SM take risk default and redeem early, but potentially higher returns if can overcome tax burden
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duck
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Post by duck on Jul 18, 2016 5:07:40 GMT
I use totally different strategies for my personal and business accounts with my business being almost exclusively 'aftermarket'.
That said, I have a sheet on my spreadsheet that works out return based on time held, cost at time of purchase (either primary or secondary market for every loan part) and their relationship to discounts if the loan part was to be sold before term end. This makes life very easy if I want to sell loan parts at any time.
Whilst I currently don't have any defaults (or loans to be treated as irrecoverable for tax return purposes) this 'opportunity' shouldn't be overlooked for personal investors.
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Post by Deleted on Jul 18, 2016 7:41:43 GMT
I buy all the pawn except the art and the weird and wonderful
I look at the boats with care, some are rubbish some not
I buy the cars
I pick up property when a first charge and when the details make sense
I use the secondary market when there is more than 150 days left, the interest is greater than 10% and the assets make sense above
I reinvest as above except property (which I leave well alone)
My level of investment has generally stayed level for the last year with slight withdrawal where I just cannot find anything attractive to invest in.
Slightly disappointed by default rates on pawn, but at least the asset is portable, liquid and in FS's hands.
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