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Post by Deleted on Oct 29, 2016 17:03:36 GMT
Having just made my first deposit into Saving Stream and realising there are only 12 available loans which aren't already late.
How diversified do people aim to keep their total pot?
I am used to aiming for exposure of 1% or less on sites such as Funding Circle per loan but doesn't seem possible here.
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SteveT
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Post by SteveT on Oct 29, 2016 17:07:39 GMT
Yes, it's possible on SS too but you either have to be patient and invest in new loans as they launch (a couple per week typically, with a launch email the day before) or devote time and effort to pick up parts in decent loans that others are selling via the SM. Personally I wouldn't recommend buying into loans with less than, say, 60 days remaining, but there are a few exceptions with stronger security. FC it ain't.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Oct 29, 2016 17:12:05 GMT
12? I guess you mean on the SM? You're lucky; usually, there is nothing!
My advice is to take advantage of any loans on the SM that passes your DD, and then bide your time with the pre-funding! Other positive term loans will appear on the SM, but you will have to be fast.
As for diversifying; I try not to have more than 10% (of my SS pot) in any one loan, and try to push weight towards the better-looking loans. 1% is going to be hard/ impossible to achieve TBH, unless your willing to put money into some of the negative loans.
Don't go shoving your money in every loan; there will be some to avoid altogether (or if liquidity looks good, hold to 100day and then sell).
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Post by Deleted on Oct 29, 2016 17:17:14 GMT
Personally I wouldn't recommend buying into loans with less than, say, 60 days remaining, but there are a few exceptions with stronger security. FC it ain't. Having said this would you then look to sell loans which have less than 60 days remaining ?? Less than 60 days does reduce the SM options to 1 ...... By stronger security do you simply mean lower LTV ??
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Post by Deleted on Oct 29, 2016 17:20:07 GMT
My advice is to take advantage of any loans on the SM that passes your DD, and then bide your time with the pre-funding! Other positive term loans will appear on the SM, but you will have to be fast. Don't go shoving your money in every loan; there will be some to avoid altogether (or if liquidity looks good, hold to 100day and then sell). What are you looking for with you due dilgence on Savings Stream? Is there much to go on other than LTV and the recent updates? What leads you to decide which loans are best avoided?
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Post by brokenbiscuits on Oct 29, 2016 17:20:33 GMT
Over time it's realistic to achieve diversification over about 40 loans. You will struggle to invest in 100 loans, mainly because there are currently less than that number live right now.
I'm usually around the 40 mark. Reducing exposure as the loan gets closer to zero and being completely out of most well before it gets near the proposed repayment date.
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SteveT
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Post by SteveT on Oct 29, 2016 17:25:24 GMT
Personally I wouldn't recommend buying into loans with less than, say, 60 days remaining, but there are a few exceptions with stronger security. FC it ain't. Having said this would you then look to sell loans which have less than 60 days remaining ?? Less than 60 days does reduce the SM options to 1 ...... By stronger security do you simply mean lower LTV ?? Most of my SS loan holdings have 100+ days to run. However there are a handful that I'm happy to hold to term, even once days have gone negative, since I'm comfortable that there are sensible exit routes for the borrower (sale / refinance / etc.) and there is ample value in the security to cover capital & interest in full if it ever came to default. Lower LTVs are a good start but you really need to read the loan details, the valuation report and search this forum for the appropriate thread where the loan has been discussed previously. That said, there are a few where past discussion has become slightly hysterical so I shouldn't believe everything you read here! Take it slowly, start by pre-funding a few new ones and take advantage of any "feast" periods on the SM, when other lenders sell down parts of existing loan holdings to fund new ones.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Oct 29, 2016 17:29:17 GMT
My advice is to take advantage of any loans on the SM that passes your DD, and then bide your time with the pre-funding! Other positive term loans will appear on the SM, but you will have to be fast. Don't go shoving your money in every loan; there will be some to avoid altogether (or if liquidity looks good, hold to 100day and then sell). What are you looking for with you due dilgence on Savings Stream? Is there much to go on other than LTV and the recent updates? What leads you to decide which loans are best avoided? It really does depend on how deep you want to go. Every loan has a valuation report, so make sure you have a good read; sometimes they will note something of concern. LTV is important, but where available use the 90-day market price, not the market vale that SS use to calculate to LTV Where possible, have a good look at the borrower, including the company and the people behind the company Companies House. SS don't release any finance records, so it's a good idea to go to companies house have a glance over the most recent accounts for the borrower's company (and the parent company). Google is your friend; google the company and property to see if it produces any negative results Always keep an eye on this forum; there used to be some sad git who used to produce DD posts for each loan, but he stopped for some reason  . In any case; mass DD does occur here, and members are likely to flag up any worrying details about a loan or borrower. SS is a hands-on platform; be prepared to put in some graft!
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Post by Deleted on Oct 29, 2016 17:34:04 GMT
Wow having read those last two posts I'm wishing I had more than £1000 to deposit as the workload might struggle to justify the outcome!
I guess you fellas are in for rather more than that but I've been trying to stick to 10% of savings in p2p and I've got some already in other platforms.......
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Oct 29, 2016 17:50:14 GMT
Wow having read those last two posts I'm wishing I had more than £1000 to deposit as the workload might struggle to justify the outcome! I guess you fellas are in for rather more than that but I've been trying to stick to 10% of savings in p2p and I've got some already in other platforms....... Like I said; it does depend on how deep you want to go! I perhaps go over the top, but I like to keep an eye on the bigger picture. Most do simply diversify, and some have a set date to dump loans (i.e. 100days) to minimise risk; but I would still recommend carrying out some quick DD on each loan, even if that is just a glance at the valuation report and this forum. 
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Liz
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Post by Liz on Oct 29, 2016 18:01:50 GMT
Wow having read those last two posts I'm wishing I had more than £1000 to deposit as the workload might struggle to justify the outcome! I guess you fellas are in for rather more than that but I've been trying to stick to 10% of savings in p2p and I've got some already in other platforms....... Like I said; it does depend on how deep you want to go! I perhaps go over the top, but I like to keep an eye on the bigger picture. Most do simply diversify, and some have a set date to dump loans (i.e. 100days) to minimise risk; but I would still recommend carrying out some quick DD on each loan, even if that is just a glance at the valuation report and this forum. CD that first sentence sounded a bit rude! I'm in at the deep end too with p2p. I don't see much point in earning nothing having funds in a bank, if shares then fine, but earning negative real returns is not for me. I would say diversification of 1-2%, so only 50-100 loans across all platforms. So maybe 12-25 across 4 platforms. Although I mainly use 2 platforms and will put 5%+ in 1 loan, in for a penny...
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am
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Post by am on Oct 29, 2016 18:07:34 GMT
Having just made my first deposit into Saving Stream and realising there are only 12 available loans which aren't already late. How diversified do people aim to keep their total pot? I am used to aiming for exposure of 1% or less on sites such as Funding Circle per loan but doesn't seem possible here. I reckon that diversification within an asset category has to extend to the use of other platforms. I'm currently in 25 loans, but 2/3rds of my total SS portfolio is in only 9 loans.
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star dust
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Post by star dust on Oct 29, 2016 18:12:54 GMT
I was just about to say, how well and evenly you get diversified will probably depend on how large a stake you are planning to put on SS. With their pre-fund allocation method and increasing popularity some of the smaller loans are giving investors a maximum of a few hundred through pre-funding. For a larger investor or BH (big hitter) this leads to having fewer loans to choose from that can take a reasonable slice of their investments; for the smaller investor however, this could be ideal in becoming well and less lumpily diversified. For the time restricted investor of any kind, patience and pre-funding would be the way to go, as picking stuff up on the SM these days requires quite a heavy time investment as well as very fast fingers! Even if you're well diversified I would still suggest, like others here, at least reading the loan details and valuations on the platform if not much else.
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adrianc
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Post by adrianc on Oct 29, 2016 18:37:19 GMT
It's all a balancing act.
My own strategy? I have parts in 57 loans. I have a nice round figure to aim for - the same for each, with a few exceptions. Mostly, they're because of multiple loans to the same borrower. I keep a spreadsheet showing what I have in each loan, time remaining, latest comments etc.
There's three colour-codings - green (buy more), orange (sell list - either because it's one of the ones I'm happy to shed when a new loan comes on, or because I'm overweight on it), red (the loan/s that I'm actively selling atm).
Time-wise, of the 57...
6 are -ve. Two are orange for shedding. One is red. Two of the others are the Welsh and Scottish land that's apparently had a 12mo extension, which hasn't (yet?) been reflected in the date. The last is the Shropshire land rumoured to be heading for a DFL roll-over.
16 are <60 day. One is orange for shedding. The rest have a strict eye on the comments.
2 are 60-100 day.
33 are 100+ day.
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Post by GSV3MIaC on Oct 29, 2016 20:21:26 GMT
/mod hat off
@nirish , you certainly won't achieve 1% at SS, there are just not enough (decent) loans .. not even enough total loans. However achieving 1% of your overall P2P portfolio should be possible, if you look at other similar sites (MT, Collateral, Ablrate, to name but three). Also bear in mind that 'diversified' on SS still has a lot more risk that being spread around more widely .. platform risk, and the fact that all the loans are property, in one form or another, so are rather highly correlated (i.e. if property prices crash, the whole portfolio is affected). Running multiple platforms is a bit of a PITA, but probably worth it is you are planning to punt with a sum that would worry you if it got dented.
The SM is a royal pain to use for buying, so prefunding new loans is the easiest way to go .. just accept you can't (and shouldn't) stick all your money in on day1, or even month1. Took me over 6 months to get my modest 5-figure sum distributed how I like it, and now it is merely maintenance to do whenever a new loan appears (i.e. a) do I want some, and b) what would I prefer to swap for it .. assuming I can sell it on the SM).
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. In any case; mass DD does occur here, and members are likely to flag up any worrying details about a loan or borrower.
