|
Post by Financial Thing on Nov 20, 2015 13:22:11 GMT
I tend to agree with Financial Thing - the BoE will track the Fed with very little lag, primarily to defend the currency. Up to a point. A modest decline in sterling would probably be welcomed at the moment. But in any event rises will be small and should be priced into expectations already. I think the downward pressure on p2p rates when we have p2p ISAs will be the bigger story. Some of these P2P companies seem like they're flying by the seat of their pants so I doubt they are pricing anything in much further than the current day. I see the ISA's as being a double edged sword. The sharper side being too much money, too few loans. The sharp side, more public attention brought to P2P leading to more loans. Only time will tell. Somehow I can't see old Ted & Mildred fiddling with the bidding sites like RS or REBS or with the complicated sites like AC or TC. Plus as I understand, you can't spread your ISA around so you have to put all your dough into one platform? I think that will stop some of the influx of cash. What worries me more are companies like InvestUp who will provide a basket of platforms for people to put their money into, making P2P less complicated for the average folk.
|
|
|
Post by Financial Thing on Nov 20, 2015 13:13:53 GMT
I'm really surprised about this "jumping ship" mentality, especially into high risk platforms. Blinded by interest rates rather than looking at the long term risk reduction? We'll see how this plays out. Well, it’s playing out OK for me so far. I jumped ship with half of my Frail Capital and moved it to SS - having looked at AC and ReBS first but rejected them as having too few deals. It’s fairly high interest at 12% and doesn’t look too risky. In fact, when I look at the many defaults that I’ve suffered on Famously Crumbly, and at the first charge on property with max LTV=70% on SS, then it feels less risky. Also, although the deal flow is erratic, SS tells you what’s in the pipeline. I found that the Frantic Clicking skills from the auction climaxes that I had developed were transferable to the buying frenzy that grips the SS SM when a loans pops out of the pipeline and lenders rush to rebalance their loans. Nearly all these SS loans are under the old structure so if the platform goes down, well I don't want to scare you.
|
|
|
Post by Financial Thing on Nov 20, 2015 13:11:27 GMT
Yep but SS has all its eggs piled into the property market (which is ultra frothy). I would take MT's spread of different types of loans any day. Actually its very stable, relative to say the stock market, that's why the ultra rich always have a large proportion of property in their portfolio Granted, it is only one asset class and you get diversification of assets with others, but you don't get the specialization as you do with SS (eg platform setup (SM and PF), experience in selecting borrowers and track record of low defaults, diversity of borrowers and loans within the property arena etc) Do you want to lend to a platform where this is their first bridging loan with no safety nets, just because they also do loans on cars/watches/gold OR with a platform that has done numerous bridging loans and has those safety features already built in? These safety features you speak of are providing investors with a false sense of security. I received a nice email from Fruitful a few weeks ago saying they were closing their P2P investing operation and that we could expect to receive some of our money within 12 months once they find people to buy out the loans. They too had a provision fund. Nice. Personally I consider P2P investments a gamble knowing in the back of mind that any of these companies could close up their doors any day to never be heard of again. Trustbuddy anyone? So I don't consider these safety nets as much of a plus since I've never seen them at work once a company folds. Oh and nearly all SS loans are under the old structure so if that platform goes down, your money will likely go with it.
|
|
|
Post by Financial Thing on Nov 20, 2015 1:18:35 GMT
Yep but SS has all its eggs piled into the property market (which is ultra frothy). I would take MT's spread of different types of loans any day.
|
|
|
Post by Financial Thing on Nov 19, 2015 19:59:25 GMT
A 1% rise would see me cashing out of Club Lloyds, not Ratesetter though. How come?
|
|
|
Post by Financial Thing on Nov 19, 2015 19:58:35 GMT
I don't see a UK interest rate rise until late 2016 or early 2017. Therefore a small rise in US rates will have little impact in P2P in the UK We don't know how a rate rise in the US would affect the UK's P2P market, but I doubt the UK gov. would wait a full year to change rates after the US raised rates. The US and UK rates have run in very close proximity since 2009
|
|
|
Post by Financial Thing on Nov 19, 2015 14:35:17 GMT
Wonder if this will be the first true test of P2P? True test in what way? Some upset customers for lower rate P2P like RateSetter and to a lesser extent Zopa when people trying to sell discover how expensive it is to match higher market rates there. More trouble if current rates substantially exceed past rates and there are more widespread attempts to withdraw to relend at a higher rate and people at those discover it's expensive to do. If normal savings accounts exceed the P2P rates it'll matter more and short term liending in some monthly P2P or Wellesley might see more widespread withdrawing for this reason. But not universally, after all, they do have money inflow today at lower rates than are available elsewhere in P2P. Beyond that? Not so much in the way of consequences for a while. Eventually those with offset mortgages will find the mortgage offset account paying more than P2P and will withdraw to use that but I don't think there's enough of this to make a big difference. After a while those with flexible mortgages might make the same move when the rates make it worth doing. Higher rate P2P should be fine because there will still be a significant margin above bank rates and the relative change in interest rate will be lower even if rates do increase. Liquidity for older loans might evaporate on par-only secondary markets, though. I don't see a high buyer volume at old par rates when new par rates are say 2% higher and with no opportunity to discount to match the rate the result may be lock-in unless there is a sufficiently high demand or loans to mask the effect and keep the lower rates attractive on the "that's all there is to invest into" basis. Tested if savings rate ever creep towards the "safer" P2P options, or if many people try heading for the exits at once.
|
|
|
Post by Financial Thing on Nov 18, 2015 21:51:02 GMT
All signs are pointing to the US Fed raising interest rates in December. I see the UK following suite and raising rates early 2016. Wonder if this will be the first true test of P2P?
|
|
|
Post by Financial Thing on Nov 18, 2015 21:21:35 GMT
Once upon a time there were three little pigs. One pig built a house of straw while the second pig built his house with sticks. They built their houses very quickly and then sang and danced all day because they were lazy. The third little pig worked hard all day and built his house with bricks. A big bad wolf saw the two little pigs while they danced and played and thought, “What juicy tender meals they will make!” He chased the two pigs and they ran and hid in their houses. The big bad wolf went to the first house and huffed and puffed and blew the house down in minutes. The frightened little pig ran to the second pig’s house that was made of sticks. The big bad wolf now came to this house and huffed and puffed and blew the house down in hardly any time. Now, the two little pigs were terrified and ran to the third pig’s house that was made of bricks. The big bad wolf tried to huff and puff and blow the house down, but he could not. He kept trying for hours but the house was very strong and the little pigs were safe inside. Personally I'm (mostly) sticking with the third pig but each to their own. So you're investing in Pork belly futures like in Trading Places?
|
|
|
Post by Financial Thing on Nov 18, 2015 21:19:41 GMT
Funding Secure is worth a try - 6 mth asset back loans for 12-13%pa. Its difficult to deploy a large amount of cash, but it should be good for £5k and helps diversification. A whole range of assets are lent against in a pawn broker type set-up. I've had one loan default and 100% recovery via auction of the asset held as security which has given a bit of comfort that the process works. No SM, so liquidity could be an issue for some, but all loans have a 6th term and are either settled or rolled over as a new loan. Really dislike the fact FS doesn't pay interest or principle until the loan is over. Increases risk.
|
|
|
Post by Financial Thing on Nov 18, 2015 21:08:18 GMT
savingstream I have to say I mostly detest the new website (aside of the site showing how much total one has invested in a loan), Amazing how a website design could take a monumental leap back in functionality. You know the old saying, "If it 'aint broke, don't fix it"
|
|
|
Post by Financial Thing on Nov 18, 2015 12:57:05 GMT
I'm reading posts about people exiting FC so I'm wondering where people are moving towards? I know many will say SS, but I just can't see this being a safe move since the property market is so frothy and being heavily invested into a single sector could be disastrous once it's tested (see 2008 / 2009). Rebs new loan flow seems slow. AC isn't bad but if you are new, trying to place funds is slow. Fk doesn't have much, TC is too pricey for me, LC is too new. Given your SS reservations, I guess you're not tempted by 12% + 1.5% cashback on MoneyThing's 12 month bridging loan (or 12% on a couple of super-car loans, for that matter) Very attractive rates Steve but I already have more money with MT than I'm comfortable with and I have some concerns which prevent me from placing too much money with them. I do like MT though.
|
|
|
Post by Financial Thing on Nov 18, 2015 12:20:15 GMT
I'm reading posts about people exiting FC so I'm wondering where people are moving towards?
I know many will say SS, but I just can't see this being a safe move since the property market is so frothy and being heavily invested into a single sector could be disastrous once it's tested (see 2008 / 2009).
Rebs new loan flow seems slow. AC isn't bad but if you are new, trying to place funds is slow. Fk doesn't have much, TC is too pricey for me, LC is too new.
|
|
|
Post by Financial Thing on Nov 18, 2015 12:08:28 GMT
savingstream Why did you remove the interest earned amount column from MyLoans page, now I have to click an arrow to see that on each loan, why oh why?? I do like how it shows how much total you have into each loan, but aside of that, I really preferred the way the old site was laid out showing a simple list view with interest earned next to each loan part. Shame.
|
|
|
Post by Financial Thing on Nov 10, 2015 14:29:25 GMT
oik So far all I see is current accounts (TSB, Lloyds etc) offering small deposit allocations small sums or Santander up to £25k with the requirements of direct deposits and other hassles. Since you have found a no-nonsense method to place £150k @ 3-5% in current accounts (without having 10 current accounts), and you are obviously a brilliant researcher (and apparently very smart and savvy) maybe you'd be generous enough to share the specifics with the forum? I'm sure if we all knew how to do this, we would ditch our low % p2p options and sleep much better at night. No, you've misunderstood, I do have more than 10 current accounts and you possibly also misunderstand the amount of hassle involved for anyone capable of setting up a SO or DD. I don't need to touch accounts from one month to the next other than to pick up the interest. For the amounts most people will want to hold as cash it's way less hassle than trying to get a reasonable return on the likes of Ratesetter without locking themselves in for years with only the unpredictabe "Sell out" option to bale them out. It hardly needs a lot of research and I and others posted details here only a few days ago. If you can't find them and are interested, then I'd be happy to find them for you or explain anything you don't follow but I'm not going to drag any horse to water. What interests me is that if people haven't researched and understood what's available from simple accounts with conventional banks then they're unlikely to be in a position to evaluate the more complex propositions from P2P. Some of us actually enjoy the hands-on aspect on p2p. I especially like knowing I'm helping small businesses receive the financing, financing the very banks you are depositing with deny them each day. And as far as misunderstanding, can't misunderstand omission. But now I know, 10-100?? current accounts. Sounds like a pain + fiscally risky since some accounts earn less than inflation. All I've seen listed here is a suggested Tesco account for £3k which some people aren't applicable for (myself included). Haven't seen much else of interest that doesn't involve fiddling around with small sums which have to moved when the variable interest rate changes. And now if you'll excuse me, I have to be dragged back to my stable to receive new horseshoes.
|
|