c702
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Post by c702 on Mar 20, 2017 13:05:07 GMT
I've seen people talk about diversifying between risk levels with your portfolio and between various different platorms in P2P lending
But I was wondering how much people diversify within a single platform like SS. Do you have dozens of loans running at any one time?
(I know in Ratesetter and the like it automatically spreads it out for you.)
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Post by d_saver on Mar 20, 2017 13:12:30 GMT
I think conventional wisdom would probably say you should not put more than 1 or 2% of your investable cash into any one of these investments, and perhaps limit your total investment per platform too, to protect against platform failure. I'm sure on SS, many people (including me) break these rules, partly because of the secondary market situation (it's generally been easy to sell your investment and diversify further later), but it might not be the most risk averse way of doing things. For me, it's no more than 30% in any one platform. It does take some time to build a properly balanced portfolio of loans.
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boundah
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Post by boundah on Mar 20, 2017 13:13:56 GMT
I've seen people talk about diversifying between risk levels with your portfolio and between various different platorms in P2P lending But I was wondering how much people diversify within a single platform like SS. Do you have dozens of loans running at any one time? (I know in Ratesetter and the like it automatically spreads it out for you.) On SS I've settled around the 20 loans mark, though not evenly split - I put more into those I feel most comfortable with. I avoid low-interest loans completely (sub 10%) and those with shorter times to run (sub 60d).
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jomantha
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Post by jomantha on Mar 20, 2017 13:22:25 GMT
21 loans and I have everything in SS for now.
I know there is a risk of platform failure but on digging around - we lend our money to the individual loans now and not to SS - so although platform failure would be messy - I feel we would get our money back eventually.
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c702
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Post by c702 on Mar 20, 2017 13:24:41 GMT
I think conventional wisdom would probably say you should not put more than 1 or 2% of your investable cash into any one of these investments, and perhaps limit your total investment per platform too, to protect against platform failure. I'm sure on SS, many people (including me) break these rules, partly because of the secondary market situation (it's generally been easy to sell your investment and diversify further later), but it might not be the most risk averse way of doing things. For me, it's no more than 30% in any one platform. It does take some time to build a properly balanced portfolio of loans. This was more specifically about diversification within SS not about how you diversify your portfolio, I think everyone knows the lessons of cash/property/assets/market investments Though I must say its just cash/property/ratesetter/SS for me right now but then I don't have much in the way of investments.
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c702
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Post by c702 on Mar 20, 2017 13:25:41 GMT
21 loans and I have everything in SS for now. I know there is a risk of platform failure but on digging around - we lend our money to the individual loans now and not to SS - so although platform failure would be messy - I feel we would get our money back eventually. That is an interesting notion, so long as you are comfortable with the security then I guess why not.
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jomantha
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Post by jomantha on Mar 20, 2017 13:31:38 GMT
21 loans and I have everything in SS for now. I know there is a risk of platform failure but on digging around - we lend our money to the individual loans now and not to SS - so although platform failure would be messy - I feel we would get our money back eventually. That is an interesting notion, so long as you are comfortable with the security then I guess why not. I would rather diversify - and am considering an IFISA for 2018 as I had carefully planned to make the most of the £5k additional int allowance but now I guess it will become taxable, but at the moment the other platforms I have looked at seem quite bitty in comparison other than property crowd and I don't meet their criteria.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 20, 2017 13:32:04 GMT
21 loans and I have everything in SS for now. I know there is a risk of platform failure but on digging around - we lend our money to the individual loans now and not to SS - so although platform failure would be messy - I feel we would get our money back eventually. Just remember that on the "Old T&Cs" loans we are lending to Lendy, not the borrower New loans are indeed between us and the borrower, but then you rely on the (unknown?) 3rd party to handle the complex and messy events that would follow. Not to be recommended TBH - and this is advice from someone who was, at one stage in the same boat as you (100% in SS). Your theory is not bad, but it also applies to other P2P platforms, so little reason not to diversify
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jomantha
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Post by jomantha on Mar 20, 2017 13:33:44 GMT
21 loans and I have everything in SS for now. I know there is a risk of platform failure but on digging around - we lend our money to the individual loans now and not to SS - so although platform failure would be messy - I feel we would get our money back eventually. Just remember that on the "Old T&Cs" loans we are lending to Lendy, not the borrower New loans are indeed between us and the borrower, but then you rely on the (unknown?) 3rd party to handle the complex and messy events that would follow. Not to be recommended TBH - and this is advice from someone who was, at one stage in the same boat as you (100% in SS). Your theory is not bad, but it also applies to other P2P platforms. Is there an easy (ish) was to tell which are new and which are old t&cs?
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 20, 2017 13:39:03 GMT
Just remember that on the "Old T&Cs" loans we are lending to Lendy, not the borrower New loans are indeed between us and the borrower, but then you rely on the (unknown?) 3rd party to handle the complex and messy events that would follow. Not to be recommended TBH - and this is advice from someone who was, at one stage in the same boat as you (100% in SS). Your theory is not bad, but it also applies to other P2P platforms. Is there an easy (ish) was to tell which are new and which are old t&cs? SS don't (despite it being a fairly important detail when investing...) A pig once informed me of an "updates thread", where Old & New T&C loans have been separated  p2pindependentforum.com/thread/2635/savingstream-loans-updates-useful-links
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jomantha
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Post by jomantha on Mar 20, 2017 13:40:31 GMT
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p2p2p
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Post by p2p2p on Mar 20, 2017 13:53:47 GMT
I'm a believer in diversification rather than due diligence, as I suspect its hard to get a true position at one remove, and I'm no property developer.
So 50 loans, with ideally no more than 2.5% of my SS investment in each.
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Post by charliebrown on Mar 20, 2017 14:21:05 GMT
I'm a believer in diversification rather than due diligence, as I suspect its hard to get a true position at one remove, and I'm no property developer. So 50 loans, with ideally no more than 2.5% of my SS investment in each. Im no financial advisor, just giveIng my 2p worth. Saving Stream is a different animal. I'm not sure the "maximum diversification" strategy is a good strategy. At the time of writing this there are 11 defaulted loans (yes, 11) and there are at least 2 or 3 more close to default and by the looks of it many more heading for trouble. A fully diversified investor would have money in these loans and frankly would probably be looking at capital loses far exceeding any interest gain. i am not fully diversified and I don't have money in any of these toxic loans. Instead, what I have done is choose which loans I like and put large % amounts into them. I then pray every night and watch this forum like a hawk, the first smell of trouble and I hit the eject button. The liquid SM has allowed me to offload loans without too much trouble. SS has become a game of musical chairs, or you might say Russian roulette. I Guess the question is, with the defaults tab rapidly growing there's a high chance that we are going to start to see capital loses. Is the risk outweighing the rewards? I haven't been tracking the numbers but from memory we've seen a lot more defaults than repayments in my recent memory.
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c702
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Post by c702 on Mar 20, 2017 15:03:23 GMT
I'm a believer in diversification rather than due diligence, as I suspect its hard to get a true position at one remove, and I'm no property developer. So 50 loans, with ideally no more than 2.5% of my SS investment in each. Im no financial advisor, just giveIng my 2p worth. Saving Stream is a different animal. I'm not sure the "maximum diversification" strategy is a good strategy. At the time of writing this there are 11 defaulted loans (yes, 11) and there are at least 2 or 3 more close to default and by the looks of it many more heading for trouble. A fully diversified investor would have money in these loans and frankly would probably be looking at capital loses far exceeding any interest gain. i am not fully diversified and I don't have money in any of these toxic loans. Instead, what I have done is choose which loans I like and put large % amounts into them. I then pray every night and watch this forum like a hawk, the first smell of trouble and I hit the eject button. The liquid SM has allowed me to offload loans without too much trouble. SS has become a game of musical chairs, or you might say Russian roulette. I Guess the question is, with the defaults tab rapidly growing there's a high chance that we are going to start to see capital loses. Is the risk outweighing the rewards? I haven't been tracking the numbers but from memory we've seen a lot more defaults than repayments in my recent memory. You read my mind, I started the topic thinking this.
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Post by scerbera on Mar 20, 2017 15:07:19 GMT
I have been in ss since the start, I am very picky with loans, currently just 3 and 10k in each. I never hold to term.
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