What % of your cash savings do you have in P2P...

edinburgher

Currently 0%, was as high as 50% back in the days where you got a return

Now something like 60% equities/20% bonds/20% cash

N1AK

beancurd wrote: »

I'm fascinated by all the risk comments.

It'd be interesting to know what % people hold in corporate bonds and if they approach it very differently to p2p.

Personally I see the loans in P2P as low risk. You can spread your money over a huge number of loans and it would take an unprecidented financial crash for defaults to exceed interest and a notable percentage of my capital investment.

I see the risk in P2P being the P2P company. Yes, in theory, my loans with Zopa/Ratesetter/FundingCircle should remain if they crash and burn but it's no certainty and it'll be a major hassle.

Thus I am happy to have considerably more in index funds than P2P. Funds vary in value but I have no concern at all about them vanishing entirely.

chucknorris

N1AK wrote: »

Personally I see the loans in P2P as low risk. You can spread your money over a huge number of loans and it would take an unprecidented financial crash for defaults to exceed interest and a notable percentage of my capital investment.

I see the risk in P2P being the P2P company. Yes, in theory, my loans with Zopa/Ratesetter/FundingCircle should remain if they crash and burn but it's no certainty and it'll be a major hassle.

Thus I am happy to have considerably more in index funds than P2P. Funds vary in value but I have no concern at all about them vanishing entirely.

That is my perception too (and I stay away from individual shares for the same reason), also I don't like the idea that you have to hang around waiting for your cash to be loaned out before earning interest, which means this is going to drag the rate of return down. From what I have read, the more you invest, the longer you wait, and I wouldn't bother investing less than £50k and even then it would be a taster with the hope of investing more, so I don't think that P2P is for me.

But I'm happy to listen to counter arguments, because I did like the concept of something else offering more diversity in my portfolio.

N1AK

chucknorris wrote: »

That is my perception too (and I stay away from individual shares for the same reason), also I don't like the idea that you have to hang around waiting for your cash to be loaned out before earning interest, which means this is going to drag the rate of return down. From what I have read, the more you invest, the longer you wait, and I wouldn't bother investing less than £50k and even then it would be a taster with the hope of investing more, so I don't think that P2P is for me.

But I'm happy to listen to counter arguments, because I did like the concept of something else offering more diversity in my portfolio.

It does take some time for money to be lent out, however depending on the period you are lending for the impact on your overall return is likely to be pretty minimal. Lending more (within reason) doesn't automatically mean it will take longer. I've limited my lending to £20 per loan, but on a £50k pot I would happily lend ~£250-400 per loan.

Personally my biggest issue with FundingCircle, which seems to offer the best returns, is that you can't use Autobid without being forced to buy up loans that other people divest. This means that unless you want to manually manage your lending (not a worthwhile use of my time) then you get stuck buying loans that other people who are managing their time are getting rid of because they think something might be wrong. If it wasn't for that I'd have around twice as much money with them.