Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Fatbritabroad
    • By Fatbritabroad 4th Apr 17, 9:56 PM
    • 184Posts
    • 79Thanks
    Fatbritabroad
    What's higher risk equities or peer to peer
    • #1
    • 4th Apr 17, 9:56 PM
    What's higher risk equities or peer to peer 4th Apr 17 at 9:56 PM
    Hi just gauging opinion really for my own interest as I don't actually think there's a right or wrong answer on this.

    how do people view cash vs equities(in this case meaning funds rather than individual shares ) vs the more well known peer to peer sites (rate-setter zopa funding circle) in terms of risk of capital loss. And has people's view changed since p2p has come under the fca

    I personally find peer to peer hard to gauge. I see some people counting it as part of their 'cash' savings and others saying the risk of platform fraud and defaults mean they are higher risk over long term (ten years) than equities (given that your investments in funds can 'never' go to zero) I'm actually leaning towards the list going cash, equities then peer to peer (accepting you can diversify across platforms)

    Having fixed my mortgage at a low rate for ten years I'm free to start really ramping up my savings (I already put a decent amount in pensions) and weighing up the cash vs peer to peer vs equity split I may do.

    So. Thoughts welcome. Have at it
Page 3
  • jamesd
    Your statement about loans being snapped up in seconds is wrong
    ...
    The point with respect to flexible isas has been made to several platforms on the p2p platform and acknowledged, whether platforms progress with this remains to be seen. Obviously this wouldn't necessarily toe you into any loan more than a non isa investment, you can always sell and stay in cash, wit for a suitable loan. Withdrawing would of course reduce your isa allowance for the year.
    Originally posted by bigadaj
    Generator loan 71 filled in a couple of minutes due to a combination of size and interest rate. Ablrate are considering what to do to prevent a repeat.

    When you withdraw money from a flexible ISA like Ablrate's you're allowed to make "replacement subscriptions" up to the amount withdrawn that don't count against your annual allowance. If you have the money you could withdraw and resubscribe a million pounds ten or however many times you liked during the year.

    I flexibly withdrew money from a cash ISA in 2016-17 to invest in P2P lending and used replacement subscriptions before the end of the tax year so I didn't lose the ISA wrapper for the money. I've done the withdrawing part in 2017-18 as well.
    • Tallmark
    • By Tallmark 25th Jun 17, 7:59 AM
    • 7 Posts
    • 3 Thanks
    Tallmark
    I have £1.5k invested through Zopa which is giving me a return rate of 3.9%. I don't plan to increase the amount as, on balance, the risk levels associated with a downturn in the UK economy for the rate of return I'm getting are too great. Although there is diversity in the number of borrowers I have lent too, I believe all are UK based. Equities give me a return of c.6-7% and are globally diversified. I'd also add that some P2P websites have a large proportion of loans going to property developers. Pretty much the worse area to have your money invested in during a recession!
    • elephantrosie
    • By elephantrosie 25th Jun 17, 9:54 AM
    • 372 Posts
    • 102 Thanks
    elephantrosie
    in a recession, all markets are affected. including healthcare.
    Another night of thankfulness.
    • msallen
    • By msallen 25th Jun 17, 10:04 AM
    • 565 Posts
    • 511 Thanks
    msallen
    When you withdraw money from a flexible ISA like Ablrate's you're allowed to make "replacement subscriptions" up to the amount withdrawn...
    Originally posted by jamesd
    I didn't think Ablrate had launched their ISA yet. Do you know that it will be flexible when they do?
    • Tallmark
    • By Tallmark 25th Jun 17, 1:33 PM
    • 7 Posts
    • 3 Thanks
    Tallmark
    Elephantrosie- That's true. However equities and investment trusts enable you to spread the risk much more widely across different economies and sectors than is possible with Zopa. Personally I have concerns about the potential economic impact on the UK of Brexit and UK focused P2P investments are exposed to this.
    Last edited by Tallmark; 25-06-2017 at 1:36 PM. Reason: To reference previous poster
  • jamesd
    I didn't think Ablrate had launched their ISA yet. Do you know that it will be flexible when they do?
    Originally posted by msallen
    Yes, they have said it will be flexible and will accept transfers in, including money from past years.

    No telling quite when it will be available though their last update was that the development was going well. "When it's ready" is the sensible time to expect software but it shouldn't be more than a few more weeks.
    • aldershot
    • By aldershot 13th Jul 17, 11:59 AM
    • 148 Posts
    • 148 Thanks
    aldershot
    Bank of England warning today that credit card defaults are rising. Is this being reflected in P2P defaults or rising rates?
    • bigadaj
    • By bigadaj 13th Jul 17, 6:43 PM
    • 10,731 Posts
    • 7,015 Thanks
    bigadaj
    Bank of England warning today that credit card defaults are rising. Is this being reflected in P2P defaults or rising rates?
    Originally posted by aldershot
    Not necessarily connected, some platforms are consumer focused but many are business connected.

    The platforms I invest in, and others that I monitor, don't seem to have been affected. Though there is a tendency on some platforms to string out defaults rather than formally wind up and potentially show a capital loss.

    Returns are very variable, the secured lending I look at has had rates vary but it can be difficult to compare directly as different loans have different terms, levels of security or borrower record, amongst many factors. Supply and demand is also a factor as well as confidence, rates do drop where platforms think they can get away with it, but some have suffered when they do and have had to launch subsequently at a higher rate, presumably having and to rely on expensive underwriters for the lower rate loans.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,202Posts Today

6,860Users online

Martin's Twitter