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Post by moody28 on Jul 26, 2017 15:38:00 GMT
I was one of the first Zopa investors and I still get a 0.5% monthly Early Adoptor bonus. I have added lump sums, sold loans, made monthly payments, over the years and generally I have been happy with Zopa's methods and reputation. I am not a mega investor but over the years a goodly 5 figure sum has been invested and treated as another element to diversify away from equities, fixed interest and property.
I was planning to open Zopa's isa and sell loans to repurchase but I think I've reached a watershed. With Safeguard coming to an end, loan sizes up to £300, (unless carefully managed), the prospect of rising interest rates (reducing the saleability of my loans), possible higher default rate and no SG net, my risk assessment suggests its time to turn off relending, accumulate cash and make a graceful exit.
If I can get a 3.5% or even 4% yield from a low cost index tracker tax free in an isa, this looks a more attractive option. And there are no transaction costs although there is an isa platform charge about 0.25% a year.
Its been fun but the offer now, and the lending queue, and the attendant market risks are starting to steer me elsewhere.
Any similar or contrary thoughts? Many I bet!
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Post by deddington on Jul 26, 2017 17:20:29 GMT
I am a very similar profile to yourself. I have been running down my PtoP investments over the last few years in fact I can't remember the last time I made a loan.
I took out my small dabble with rate setter when they offered free free sell out.
My intentions where also to open a Zopa ISA but like you I am now unsure. To add to your concerns I have grown increasingly concerned at the level of personal debt which I believe is now above 2007 levels.
If we get a shock to the system, like rising interest rates, then unsecured loans are going to be a long way down the list of priorities for heavily indebted borrowers.
If I did decide to go back in it would be with Zopa who I trust most to be managing their business prudently.
As for where else to invest, the stock Markets feel over priced fuelled by QE so I am not willing to risk capital there for a measly 3/4% yield.
I am well diversified with other asset classes, so you know what, sometimes Cash is not a bad position to be in for spare capital.
I suppose it is an old age thing being more concerned at losing money than growing it.
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aju
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Post by aju on Jul 26, 2017 17:23:08 GMT
shame on you deserting moody28 a sinking ship,  Let me know when you are selling and i'll invest some more. I like to pick up SG's as it seems we still can.  Ok All joking aside. I understand your sentiments and your point about managing the transfer from Zopa to ZopaISA is a valid one. I can vouch that the fine management required to keep the diversification at the best level is a pain every 2 weeks or so adding another £1000 into the ISA feeds. But .... for me Zopa has been a good experience over the most part - I too started early in 2006 and fortunately still get the 0.5% benefit - and I think I've made some good money especially in the bad times of the last few years. I'm not sure the pickings are that great or safe outside the arena and I'm a bit too old to be chasing the more risky stuff so i'll be staying for the foreseeable future. One thing I realised as I was racking up the ISA investment for my other half was that pumping some money into her zopa classic was a good option before the december stop - especially as she is not a tax payer. Locking some good sums behind the safeguard seemed a good call to me. I guess we were lucky in that we had the opportunity to feed both ISA and ordinary accounts at the same time. I wish there were some better reporting tools as in older times on Zopa, especially now that SG is going, but I do tend to leave it to mostly monthly reporting these days. Its a bit busy keeping an eye on the lend rate but that will die off soon as the funds needing to be fed in run out. Of course in December I will have to decide where to direct my money but in my case it will be ISA topups and in Mrs aju's case it will be either safe rates or slightly less safe rates for slightly better returns. What is a concern is that there are a lot more defaults in SG than I had realised so I wonder how many people are going to get their fingers burned. I hope though they don't act like lemmings and jump too early. In my experience on the pre-safeguard side the defaults that don't pay are a lot less than those that eventually do. So far! Thats my slant - good luck out there on the dark side.... |
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Post by moody28 on Jul 27, 2017 11:17:06 GMT
Good points from aju and deddington! My experience with Zopa has been positive too and I am not complaining - now and again we need to step back and see what rebalancing suits us, personally. I'm more cautious than in my early investing years, having retired and now nurturing pensions and investments! Mind you I might end up swapping one form of risk for another - hey ho.
Deddington has a point about cash - many investors are overweight (in cash I mean!!) , and friends of mine are drawing from cash in preference to (taxable) pension income, leaving the pot to grow a while longer...
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ashtondav
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Post by ashtondav on Jul 27, 2017 11:46:53 GMT
Complain? Leave? Sell out of Zopa? No flipping way, Jose!
I've been with 'em since 2005 and still benefit from a full 1% bonus as a founder member. Even in the depths of 2008, and the worst financial crisis since the twenties, I made money.
im 50/50 Zopa+ and classic/core. You just can't beat Zopa for the same risk/reward return. It's the perfect asset between cash and equities, and I'm currently migrating more money from RS, as they seem determined to manipulate rates and have just admitted major lending blunders.
My only concern would be if they overstretch themselves with this new bank malarkey.
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aju
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Post by aju on Jul 27, 2017 12:27:21 GMT
Complain? Leave? Sell out of Zopa? No flipping way, Jose! I've been with 'em since 2005 and still benefit from a full 1% bonus as a founder member. Even in the depths of 2008, and the worst financial crisis since the twenties, I made money. im 50/50 Zopa+ and classic/core. You just can't beat Zopa for the same risk/reward return. It's the perfect asset between cash and equities, and I'm currently migrating more money from RS, as they seem determined to manipulate rates and have just admitted major lending blunders. My only concern would be if they overstretch themselves with this new bank malarkey. I like your style, 1%!, I'm green with envy ... Perhaps we should start an old boy network although I can't compete with your confidence in 50/50 spread. Whats your take on defaults, i'm a bit sanguine about them myself they are there but they are not something to worry about. Having said that the old adage "past does not determine future" is always in back of my mind. I'm not sure they know how to run a platform well enough to make the bank work. Lets hope they don't try and run it off the same system that Zopa is currently on eh!. One of the things that will be causing issues on the existing platform is that instead of being able to quickly switch from ISA to old loans you have to go through a number of screens to get there. Some of them seem to switch quickly other don't. Must be adding to the current resources issues.
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Post by davee39 on Jul 27, 2017 13:10:41 GMT
having retired and now nurturing pensions and investments! Perhaps not the best time to leap into the Stock market if capital preservation is an issue. I think a 20% market fall over the next two years is more likely than a 20% market rise. Brexit, Trump & Eurozone weakness could cause the markets to bite. I see Zopa as one of the stronger platforms, so even if losses in core are > predicted, capital should still be secure. Plus is much more of a risk .
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Post by ingenue on Jul 27, 2017 16:28:02 GMT
having retired and now nurturing pensions and investments! Perhaps not the best time to leap into the Stock market if capital preservation is an issue. I think a 20% market fall over the next two years is more likely than a 20% market rise. Brexit, Trump & Eurozone weakness could cause the markets to bite. I see Zopa as one of the stronger platforms, so even if losses in core are > predicted, capital should still be secure. Plus is much more of a risk . But is Zopa really more secure than a ftse index tracker? Most loans are for a five year duration and historically it would be unusual for equities to show a loss over that period. Even should they do so, you can be pretty certain of getting a large proportion of your investment returned. Nobody knows what the hell will happen if a major p2p platform goes under with no FSCS protection.
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