dandy
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Post by dandy on May 23, 2017 17:18:04 GMT
After all the advice given how could the answer be FC? Shakes head in disbelief.....  i agree with his decision having considered it in a lot of detail The average return on FC across all lenders over many years is 7%. That is after defaults. You cannot argue with that. Of the top 3 platforms they win hands down, but I am happy to be corrected if this is not the principle means to compare. If it was to be invested into Zopa or RS easy access then ~ 3% is the absolute best that can be achieved. Also FC appears to have largest volume, largest valuation and therefore most likely to stick around and face any music as many hundreds of millions of shareholders money is at stake on its success. With a 0.1% diversification (perhaps a bit higher) 5% plus should be achievable. I appreciate all the advice and that FC might handle defaults badly on occasion and screw up DD from time to time but it does seem to me that overall they are unquestionably the safest platform, taken as a whole. I kind of feel provision funds are good only until platform scale allows sufficient diversification, after which they are bad.
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Post by Deleted on May 23, 2017 17:29:41 GMT
The average return on FC across all lenders over many years is 7%. That is after defaults. You cannot argue with that.
Can and do, the rate has dropped year by year.
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jonno
Member of DD Central
nil satis nisi optimum
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Post by jonno on May 23, 2017 17:54:28 GMT
Look guys we've tried; horses and water spring to mind. Time to wrap this up methinks.  |
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mary
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Post by mary on May 23, 2017 19:55:52 GMT
The average return on FC across all lenders over many years is 7%. That is after defaults. You cannot argue with that. Can and do, the rate has dropped year by year. Agreed, likewise RateSetter, what was is no more, latest is 2.2% for a year, I could get 5% occasionally a year ago. Seems the big platforms are starting to take the p***. There are other options, just do your DD.
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Post by yorkshireman on May 23, 2017 21:48:11 GMT
After all the advice given how could the answer be FC? Shakes head in disbelief..... i agree with his decision having considered it in a lot of detail The average return on FC across all lenders over many years is 7%. That is after defaults. You cannot argue with that. Of the top 3 platforms they win hands down, but I am happy to be corrected if this is not the principle means to compare. If it was to be invested into Zopa or RS easy access then ~ 3% is the absolute best that can be achieved. Also FC appears to have largest volume, largest valuation and therefore most likely to stick around and face any music as many hundreds of millions of shareholders money is at stake on its success. With a 0.1% diversification (perhaps a bit higher) 5% plus should be achievable. I appreciate all the advice and that FC might handle defaults badly on occasion and screw up DD from time to time but it does seem to me that overall they are unquestionably the safest platform, taken as a whole. I kind of feel provision funds are good only until platform scale allows sufficient diversification, after which they are bad. The average return on FC across all lenders over many years is 7%. That is after defaults. You cannot argue with that. Can and do, the rate has dropped year by year. The average return on FC across all lenders over many years is 7%. That is after defaults. You cannot argue with that. Can and do, the rate has dropped year by year. Agreed, likewise RateSetter, what was is no more, latest is 2.2% for a year, I could get 5% occasionally a year ago. Seems the big platforms are starting to take the p***. There are other options, just do your DD. I beg to differ folks. p2pindependentforum.com/post/187168I’m not suggesting that FC is suitable for the situation described by the OP, I’m simply saying that it is still possible to achieve a reasonable return.
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sl125
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Post by sl125 on May 23, 2017 22:03:42 GMT
The negativity directed towards FC by some of the forum posters is baffling. Particularly the last two comments, which give the impression that rates are low.
Given the OP's states aims of wanting the safest platform with minimal effort expended, then FC with autobid would satisfy that aim completely. The returns after fees and bad debts are about 7% this way. Proven returns year on year by seeing the results in the loan book.
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Post by df on May 23, 2017 22:55:21 GMT
After all the advice given how could the answer be FC? Shakes head in disbelief..... i agree with his decision having considered it in a lot of detail The average return on FC across all lenders over many years is 7%. That is after defaults. You cannot argue with that. Of the top 3 platforms they win hands down, but I am happy to be corrected if this is not the principle means to compare. If it was to be invested into Zopa or RS easy access then ~ 3% is the absolute best that can be achieved. Also FC appears to have largest volume, largest valuation and therefore most likely to stick around and face any music as many hundreds of millions of shareholders money is at stake on its success. With a 0.1% diversification (perhaps a bit higher) 5% plus should be achievable. I appreciate all the advice and that FC might handle defaults badly on occasion and screw up DD from time to time but it does seem to me that overall they are unquestionably the safest platform, taken as a whole. I kind of feel provision funds are good only until platform scale allows sufficient diversification, after which they are bad. FC is probably a good choice, but he is not going to achieve any near to 7% by restricting auto investment to A*/A and up to 24 months. These loans are paying 5.5%-6.5%. There will be a massive cash drag due to low availability of loans in this category. There is 1% fee on invested capital. All monthly returns will be automatically reinvested in 24 months loans, which will result in a large loan book left to sell at the end of desired 2 year term. To sell it quick, it will have to be at par - another loss at 0.25% (selling fee). Also A*/A's are not always 'safer' than C's, they do default. So at the end of 2 years the actual return can be as low as 3%.
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registerme
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Post by registerme on May 24, 2017 0:52:19 GMT
Given the OP's states aims of wanting the safest platform with minimal effort expended, then FC with autobid would satisfy that aim completely. The returns after fees and bad debts are about 7% this way. Proven returns year on year by seeing the results in the loan book. /mod hat off. Define "safe".
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r00lish67
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Post by r00lish67 on May 24, 2017 7:09:47 GMT
I didn't expect debate over Failing Considerably to be so divided. It's hardly a well of positivity over on the FC thread.
I think we're clearly not all going to agree on their relative merits. One further thing I would point out to the OP though is that after looking at Autobid again (not somewhere i venture often on FC), I don't think it's actually technically possible to restrict it to pick up loans with 24 months or less remaining, so they're going to have to change their plan anyway. Happy to be corrected by any active Autobiddies if I'm wrong.
P.S. In the interests of disclosure, I do still use FC in a limited, very active, way and am very happy with it for that purpose. Touching the Autobid lever, however, is about as appealing to me as grasping that lever that the Indiana Jones' girl had to reach through a centipede and various bugs infested hole to stop him being spiked to death in 'The Temple of Doom'. A picture would be worth a thousand words, but I'll refrain for fear of offending.
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SteveT
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Post by SteveT on May 24, 2017 7:58:23 GMT
On average, across the entire loan book, FC works absolutely fine. Specifically, on certain individual loans, it's beyond pathetic.
Understanding just how badly a few individual loans were approved / managed by FC can mask lenders' wider appreciation of the consistency of loanbook returns on average. Diversification is everything on FC, mitigating the damage of the inevitable "dog" loans lenders will snag along the way.
That's why, once variable-rate auctions and cashback disappeared, I gave up lending directly via FC and bought into the Funding Circle SME Income investment trust instead, via my ISA. I get the loanbook average 7-8% income (tax free) and no longer hear about the stupid stuff. As a bonus, I'm also currently looking at a 7% paper gain on the share price!
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dandy
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Post by dandy on May 24, 2017 9:25:14 GMT
I didn't expect debate over Failing Considerably to be so divided. It's hardly a well of positivity over on the FC thread. I think we're clearly not all going to agree on their relative merits. One further thing I would point out to the OP though is that after looking at Autobid again (not somewhere i venture often on FC), I don't think it's actually technically possible to restrict it to pick up loans with 24 months or less remaining, so they're going to have to change their plan anyway. Happy to be corrected by any active Autobiddies if I'm wrong. This is correct which makes it more difficult. Also to speed it up the money is being spread over all loans (all risk categories) of any length as the higher rates account for the higher risk it seems and should even out over so many loans. When access is needed in a couple of years, paying a 0.25% fee seems very reasonable.
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sl125
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Post by sl125 on May 24, 2017 12:41:24 GMT
Exactly right. The liquidity has been very good such that a 5 year loan can easily be offloaded almost immediately. So you wouldn't need to limit to short term loans.
As others have pointed out, diversity is the key to managing risk... not just with FC but with all P2P platforms. That's why I am perplexed by the FC bashers that decry the individual loans that go bad whilst ignoring the overall returns.
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shimself
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Post by shimself on May 24, 2017 16:32:16 GMT
Bond funds could get hammered if inflation (and thus, one hopes, interest rates) goes up, but index linked 'ought' be a bit safer. The Bank of England employee pension fund (which of course takes a long long view) is something like 90% in index linked.
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Post by corriefan on May 24, 2017 16:42:44 GMT
Bond funds could get hammered if inflation (and thus, one hopes, interest rates) goes up, but index linked 'ought' be a bit safer. The Bank of England employee pension fund (which of course takes a long long view) is something like 90% in index linked. That's a coincidence. I spent some time today pondering whether to add some index linked gilts to my ISA. I chickened out eventually on the basis that I don't know what is going to happen to inflation. But if it's good enough for the Bank of England.....hmm. I might reconsider.
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shimself
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Post by shimself on May 24, 2017 18:44:20 GMT
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