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Post by Financial Thing on Nov 4, 2015 15:26:14 GMT
With interest rates all over the place on RS, what's your strategy with regards to RS investing and re-investing? Do you watch the rates often or simply set an interest rates and hope it gets filled? If so what are your target % rates for 3 & 5 year? I used to set at 5.8% for 3 year and 6.6% for 5 year but am noticing some dead time on unmatched money. As a side note westonkevRS why isn't an email notification sent to lenders when payments are made into their account?
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Post by Financial Thing on Nov 4, 2015 12:51:15 GMT
Risk involves far more than interest rate levels.
Can the platform sustain long term as a business? Are the Directors using the investors money as intended? Is the quality of underwriting high? Are the security valuations correct? How will the platform sustain if 2 or 3 big loans default?
SS for example. Consumers deem safe because of security held but they've only generated less than £1m interest on loans that have been repaid. Not much history there. Is it really safe?
Safety is a consumer perception made by many assumptions.
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Post by Financial Thing on Oct 28, 2015 17:33:18 GMT
P2P capped at 5% of net worth. SS presently 9% of P2P likely to rise to 15% and stop there. Strong believer in diversity, 6 portals, +400 loans. Compared to UK shares (normally earn 10 to 17% a year on shares, so falls into the lowest quartile, but the P2P details are sometimes more interesting and more transparent). Compared to US shares (normally earn 20 to 40% in the US but far riskier so US takes more reading and thinking). On the other hand P2P is taking me away from learning Italian. Never value the house, always value the pension. Struggle to believe 12% to the lender (+12% to the borrower) is sustainable so prefer shorter term loans at these rates. Find the whole idea of ROCE >10% too attractive, so wary. @bobo if you are earning those types on market crushing returns on your shares, why on earth would you settle for p2p risks/ lower returns?? What investments earning 20-40% stateside consistently?
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Post by Financial Thing on Oct 28, 2015 17:28:11 GMT
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Post by Financial Thing on Oct 28, 2015 13:17:16 GMT
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Post by Financial Thing on Oct 28, 2015 13:08:28 GMT
Are we certain they (SavingStream) hold back the interest on loans advanced? I've looked around their website for mention of this but can't find reference anywhere. That certainly makes a big difference on risk. (afaik) yes, the interest is retained from the loan advance. The only mention I can find of it is here where SS are talking about something slightly different. (not a perfect find I admit, but at least it does mean that they do retain the interest) The question about SS profitability was summarised by SS here. Thanks pepperpot. Good to know SS is profitable.
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Post by Financial Thing on Oct 28, 2015 2:59:11 GMT
So to clarify, we will be lending to the MT platform as a whole?
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Post by Financial Thing on Oct 28, 2015 2:03:01 GMT
registerme My reasonings would overlap many of the things mrclondon pointed out. I am certainly no expert on property or raw development land valuation but IMHO, the LTV's are overly optimistic possibly to entice investors into the water. We are so reliant on the underwriting / valuation quality within these platforms. After the Trustbuddy fiasco, I started to think, what do we really know about these P2P companies and their directors? Yes we eagerly hand over thousands without a care. Personally I don't know much but I trust the process. (Maybe the key is never turst a p2p platform with the "trust" in it's name.) There are so many unknowns as to how a loan book would be handled if a platform were to fail, especially a platform that is sector specific. I have no doubt in my mind if the platform were to fail, the administration problems could reduce the yield much lower than 7%. In the grand scheme of things, a 12% return for the risk involved isn't really that wonderful. What we really need to know is whether SS is a profitable business and whether it can sustain it's business model.
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Post by Financial Thing on Oct 27, 2015 22:18:52 GMT
Anyone care to share what your total p2p portfolio % is held with SS at the moment and if you're considering increasing or decreasing?
Mine's 10%
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Post by Financial Thing on Oct 27, 2015 21:30:41 GMT
Financial Thing: Each loan will have a Bridging loans particulars file in pdf format. The following text is quoted from one of them: "Lendy Ltd has full underwriting in place for £3,000,000 of this loan if required. Interest will accrue immediately upon your commitment to this loan. If the loan does not go ahead, Lendy Ltd will pay all interest owed to all committed investors." The way I understand it is that they are advancing the money and then we buy parts from this loan. They will keep what is not sold. What do you think? I've never seen an issue with loans being undersold so I can't comment on how they would handle this but they sometimes offer cashback when loans are slow to fill.
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Post by Financial Thing on Oct 27, 2015 21:17:10 GMT
There is also the fact that SS is lending its own money in many of the loans. . ablender Can you link to where they state this? I wasn't aware. After seeing what happened to Trustbuddy and the negligence that has occurred, you have to have an iron stomach to trust that companies are doing right by their investors. At the end of the day, companies can tell their investors one thing and doing whatever they want. The recourse is unknown.
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Post by Financial Thing on Oct 27, 2015 21:12:01 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. Not sure why you think that we are going into higher risk platforms? A chunk of my FC cash taken out this month has gone into RS 36 months at an average of 5.5% after costs and with a provision fund. I am convinced that a lot of the non property A+/A loans coming up on FC would have been A/B six months ago. Plenty of mentions of high risk platforms on this thread, read again.
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Post by Financial Thing on Oct 27, 2015 17:09:36 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. After two years (A and A+ only) my feeling about Fragile Credit is that there are so many defaults that it is itself a high risk platform When you have just South of £1bn in loans, defaults are par for the course. Statistically speaking, I don't see FC as being a high risk platform but if their underwriting standards drop, that's another story. I look at platform sustainability more that anything because if the platform can't sustain, then the real headaches will follow. Newest example is Fruitful, they just announced winding down their P2P platform after finding they can't sustain their business model. FC has shown its ability to scale and grow and should be profitable soon. Now if they could sort out their web tech issues.
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Post by Financial Thing on Oct 27, 2015 16:07:45 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.
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Post by Financial Thing on Oct 23, 2015 13:59:14 GMT
I have to weigh in here....
If you like to gamble and can afford to lose the money, then put it all on 2 high risk platforms and go for broke. (I think you'll be sweating once a recession hits and default rates rise).
I think the more you can diversify the better and the more platforms you diversify over the better if you can stand fiddling with them all. I'm sure some of the "savers" over at Trustduddy are wishing they had diversified over a few more platforms. I wonder if I should be committed to an asylum for handing over money to strangers, hoping they act morally and legally. Unfortunately there are unscrupulous business people that exists in this world that won't hesitate to take advantage of those who trust too easily. Some of the p2p platforms are tiny so if a single Director were to fall ill or die, there is so many unknowns as to how this would affect investors in regards to how well the company would be run.
As far as VCT's, they are inherently risky and the returns don't stack up to the volatility involved. I was looking at a popular one a few weeks ago that had lost money over the last 5 years. Yes there might be some tax advantages but they don't outweigh the risk. These VCT's tend to get hammered during rough economic times and what people tend to miss are the high running costs and fees of these Trusts.
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