ashtondav
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Post by ashtondav on Jan 22, 2020 10:03:57 GMT
The problem with shares is that at some point they drop by 30% to 50%. Now that’s fine if you’re young and got time for the portfolio to recover and grow (which it nearly always does). If you’re in retirement it’s a big problem.
youd have to be pretty unlucky to lose 30% of your diversified p2p portfolio.
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r00lish67
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Post by r00lish67 on Jan 22, 2020 10:19:41 GMT
The problem with shares is that at some point they drop by 30% to 50%. Now that’s fine if you’re young and got time for the portfolio to recover and grow (which it nearly always does). If you’re in retirement it’s a big problem. youd have to be pretty unlucky to lose 30% of your diversified p2p portfolio. Yeah, but look how youthful ozboy is, shoop-shooping down the slopes there, the young whippersnapper! 
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JamesFrance
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Post by JamesFrance on Jan 22, 2020 10:35:32 GMT
If shares crash before your demise it could save your heirs from death taxes which could well be increased, so they could reap the benefit of the recovery if they hold on to them. With P2P if it's lost it's gone forever.
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zlb
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Post by zlb on Jan 22, 2020 10:35:51 GMT
Worth revisiting this Topic, seeing as many of us I am getting out of Dodge.  I still favour Fundsmith, various Vanguards and their ilk, but wonder if there's summit else out there? P2P could have been SO good.  Hand on heart, the best 'investment' out there without catches at the moment looks like the Coventry regular saver paying an FSCS protected rate that's 1.2% above inflation (2.5%). If you are baller enough to have more than £500 a month to throw around...  well, either a 1.65% 1 year fix with Atom bank, or put it all in VWRL (but don't check the balance for 25-30 years) but doesn't the reg saver end up as 1.35% if one had just deposited the £6k in a savings account? Isn't that the issue with regular savers, they are only a benefit to people who don't have a lump sum to start with?
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r00lish67
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Post by r00lish67 on Jan 22, 2020 10:41:12 GMT
Hand on heart, the best 'investment' out there without catches at the moment looks like the Coventry regular saver paying an FSCS protected rate that's 1.2% above inflation (2.5%). If you are baller enough to have more than £500 a month to throw around... well, either a 1.65% 1 year fix with Atom bank, or put it all in VWRL (but don't check the balance for 25-30 years) but doesn't the reg saver end up as 1.35% if one had just deposited the £6k in a savings account? Isn't that the issue with regular savers, they are only a benefit to people who don't have a lump sum to start with? This is a (very common) misconception. In this case, you are earning 2.5%p.a. on everything you save. In the 2nd month fr'instance, you have £5500 to do with what you will, it's not like it's tied up in this account. Admittedly, it makes it feel "not worth it" and won't get a lump sum working quickly. I personally have the time and inclination so usually have £15k+ earning 2%-2.5% fairly consistently across many of these little buggers (although as with everything else, lower and lower rates, fewer and fewer products).
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zlb
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Post by zlb on Jan 22, 2020 10:49:26 GMT
but doesn't the reg saver end up as 1.35% if one had just deposited the £6k in a savings account? Isn't that the issue with regular savers, they are only a benefit to people who don't have a lump sum to start with? This is a (very common) misconception. In this case, you are earning 2.5%p.a. on everything you save. In the 2nd month fr'instance, you have £5500 to do with what you will, it's not like it's tied up in this account. Admittedly, it makes it feel "not worth it" and won't get a lump sum working quickly. I personally have the time and inclination so usually have £15k+ earning 2%-2.5% fairly consistently across many of these little buggers (although as with everything else, lower and lower rates, fewer and fewer products). so getting value is reliant upon the individual working hard, like you say, so that the rest of the eg 5500 is being invested elsewhere. yes lower and lower rates.
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r00lish67
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Post by r00lish67 on Jan 22, 2020 10:49:41 GMT
If shares crash before your demise it could save your heirs from death taxes which could well be increased, so they could reap the benefit of the recovery if they hold on to them. With P2P if it's lost it's gone forever. I agree. There's a good argument to be made for defying conventional wisdom and actually increasing equity exposure as you go further into retirement. A rising glidepath I believe they call it, talked about here for instance.
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lobster
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Post by lobster on Jan 22, 2020 10:55:40 GMT
The problem with shares is that at some point they drop by 30% to 50%. Now that’s fine if you’re young and got time for the portfolio to recover and grow (which it nearly always does). If you’re in retirement it’s a big problem. youd have to be pretty unlucky to lose 30% of your diversified p2p portfolio. OK , well using this logic, how about simply waiting for shares to "drop by 30% to 50%" and then immediately investing in them ?
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corto
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Post by corto on Jan 22, 2020 11:04:03 GMT
The problem with shares is that at some point they drop by 30% to 50%. Now that’s fine if you’re young and got time for the portfolio to recover and grow (which it nearly always does). If you’re in retirement it’s a big problem. youd have to be pretty unlucky to lose 30% of your diversified p2p portfolio. OK , well using this logic, how about simply waiting for shares to "drop by 30% to 50%" and then immediately investing in them ? You don't know when it happens. What do you do with the cash until then? It is a common strategy to invest this way. You need to keep some free cash and you need to overcome the natural reflex not to invest in something that is nose diving.
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macq
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Post by macq on Jan 22, 2020 11:11:30 GMT
The problem with shares is that at some point they drop by 30% to 50%. Now that’s fine if you’re young and got time for the portfolio to recover and grow (which it nearly always does). If you’re in retirement it’s a big problem. youd have to be pretty unlucky to lose 30% of your diversified p2p portfolio. Not sure that a 30% drop on a p2p diversified portfolio would surprise me as unlucky - but the point that people always make about shares dropping is based on a couple of hundred years of knowledge but at the moment you can't say with p2p what the historical figure would be (unless using data the banks have on lending but its not quite the same thing)
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lobster
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Post by lobster on Jan 22, 2020 11:15:49 GMT
OK , well using this logic, how about simply waiting for shares to "drop by 30% to 50%" and then immediately investing in them ? You don't know when it happens. What do you do with the cash until then? It is a common strategy to invest this way. You need to keep some free cash and you need to overcome the natural reflex not to invest in something that is nose diving. I agree - my comment above what somewhat tongue-in-cheek. Very often it's a mistake to buy something when it's nose-diving, as you say. However , it can be worth considering buying any such share after it has visibly formed a bottom on the price chart and begun to climb again, but unfortunately the timing of this is really hard to gauge (guess?)
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JamesFrance
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Post by JamesFrance on Jan 22, 2020 11:16:33 GMT
If shares crash before your demise it could save your heirs from death taxes which could well be increased, so they could reap the benefit of the recovery if they hold on to them. With P2P if it's lost it's gone forever. I agree. There's a good argument to be made for defying conventional wisdom and actually increasing equity exposure as you go further into retirement. A rising glidepath I believe they call it, talked about here for instance. I reached 65 in 2003 when the market was at a low. My small private pension fund had been invested in commercial property units which had not dropped during the poor market period and I linked my pension to the all share index, which has given me a much better income than a standard annuity was offering even then. My main investments are in ETFs and Investment Trusts producing an average of about 3% in dividends so to sell these and use cash deposits would drop my income considerably so I have no intention of doing that.
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corto
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Post by corto on Jan 22, 2020 11:54:53 GMT
You don't know when it happens. What do you do with the cash until then? It is a common strategy to invest this way. You need to keep some free cash and you need to overcome the natural reflex not to invest in something that is nose diving. I agree - my comment above what somewhat tongue-in-cheek. Very often it's a mistake to buy something when it's nose-diving, as you say. However , it can be worth considering buying any such share after it has visibly formed a bottom on the price chart and begun to climb again, but unfortunately the timing of this is really hard to gauge (guess?) Not any. I think it's a reasonable strategy to buy a nose diving product if one has trust in it, ie believes it is undervalued and especially if the cause of the dive is clearly external to it, like a general crash or market correction. Those usually recover within months. It is not possible for me to guess one is at or just through the bottom but it is at least occasionally possible to take advantage of fast falling or rising slopes. One problem is you need liquid funds to throw in; you can do it in chunks, drip feeding just as for long-term investments, only within a day or a few. It's not that I play games like this often or with large amounts of money. My biggest gamble is p2p.
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zlb
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Post by zlb on Jan 22, 2020 12:09:13 GMT
The problem with shares is that at some point they drop by 30% to 50%. Now that’s fine if you’re young and got time for the portfolio to recover and grow (which it nearly always does). If you’re in retirement it’s a big problem. youd have to be pretty unlucky to lose 30% of your diversified p2p portfolio. Not sure that a 30% drop on a p2p diversified portfolio would surprise me as unlucky - but the point that people always make about shares dropping is based on a couple of hundred years of knowledge but at the moment you can't say with p2p what the historical figure would be (unless using data the banks have on lending but its not quite the same thing) but... do banks expect a loss on lending? I thought yes, one reason for the Government issuing quantitative easing (as planned again, when I last read about it). It would be handy to know what risk level banks are taking presently.
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macq
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Post by macq on Jan 22, 2020 12:19:26 GMT
Not sure that a 30% drop on a p2p diversified portfolio would surprise me as unlucky - but the point that people always make about shares dropping is based on a couple of hundred years of knowledge but at the moment you can't say with p2p what the historical figure would be (unless using data the banks have on lending but its not quite the same thing) but... do banks expect a loss on lending? I thought yes, one reason for the Government issuing quantitative easing (as planned again, when I last read about it). It would be handy to know what risk level banks are taking presently. i would say yes banks do expect to make a loss on lending as nobody can get it right 100% They work in the same way as p2p in that returns and recovery outweigh losses and have an expected profit margin and have data and people like actuaries to crunch the numbers
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well, either a 1.65% 1 year fix with Atom bank, or put it all in VWRL (but don't check the balance for 25-30 years)
