Do you really need an IFA? This would seem to say No!

bigfreddiel

This thread has gone off at a very odd tangent to my original post - love it!

Cheers fj

SpeedSouth

jamesd wrote: »

More like 50k in my case, I understated the yield.

Not really likely since it's among four different P2P platforms and spread across a range of loans. I do have a fairly concentrated holding in one loan paying 19% and will do in another paying 15-16% in a little while. Both of those are secured loans, used cars as security for one and what the business is trading in for the other.

Which four platforms are you using to get those rates? I am currently using Ablrate but their loans are few and far between, and want to start diversifying across platforms. Only just really started use/explore P2P as part of my portfolio.

saver861

jamesd wrote: »

It's neither brave - it's less risky than the stock market - nor blind. I just know about the options better than quite a lot of other people, having been paying attention to the area for the least eight years.

I'm not sure it is less risky than the stock market, though clearly it would depend on how you invest in the market.

P2P has not been around that long so is relatively new. To that end, there are still a lot of unknowns. When it has been through a few deep downturns or recessions then it would have some form.

In addition, as new players come into the market place, this will impact on existing players - potentially pushing any weaker ones over the cliff.

jamesd wrote: »

Since I'm using four P2P companies all would have to both fail and have their FCA-mandated procedure for continuing to collect fail for me to get close to a 100% loss. That's not a likely prospect.

No. I think anybody would have to be pretty unlucky to lose all their investments especially with reasonable spread.

However, I think my point is that the general wisdom is that around 5% but less than 10% of portfolio should be the max on P2P. The average returns are around 5%. In your case you are putting in £50k and getting returns at 15%. Your money - your call, of course, but that equation would not sit comfortably with me.

jamesd wrote: »

In the event that all the money did get lost I'd just pay off the cards in some other way from other investments or income.

I think the key thing playing 0% cards is always to have the cash on the ready to pay them back. The advantage this time round is that the 0% periods are generally longer than last time round ... then it was around 12 months. However, they are more difficult to get this time and they are not handing over cash for free like last time.

jamesd wrote: »

I do agree with you I think that 50k borrowed is too much for most people. And most wouldn't want to do it with 1k borrowed.

£50k on cards is not a problem in itself. I've had nearly £100k (using Mrs Saver's quota also). Its all in the management of the cards. However £50k borrowed on cards to invest in any medium or high risk investment would be a no no for me.

I think there will be a lot of people out there making good money on P2P - I think also there will be many who will fall on their face in this area. If P2P stays around then its likely to have a number of bumps and hurdles along its path to becoming established.

jamesd

adam81 wrote: »

Which four platforms are you using to get those rates? I am currently using Ablrate but their loans are few and far between, and want to start diversifying across platforms. Only just really started use/explore P2P as part of my portfolio.

Bondora (don't use this one, the risk-return combination I have is no longer available), a beta product from an existing platform that is not available generally, Ablrate, MoneyThing and SavingStream next on my list.

About 12% is what is available from the public platforms that I'd recommend using. I just happen to have been around in the right places at the right times to accumulate some higher paying deals like that over 15% Ablrate one that ran recently.

jamesd

saver861 wrote: »

I'm not sure it is less risky than the stock market, though clearly it would depend on how you invest in the market.

Yes it would depend on how but I am satisfied that the risk level is lower even though we're quite a way from that being generally accepted.

saver861 wrote: »

P2P has not been around that long so is relatively new. To that end, there are still a lot of unknowns. When it has been through a few deep downturns or recessions then it would have some form.

I've been invested through just one - 2008. Some parts of the Zopa loan book had double the predicted default rate but that was still not too high given the interest rates available during the period..

saver861 wrote: »

In addition, as new players come into the market place, this will impact on existing players - potentially pushing any weaker ones over the cliff.

Mostly it will be the new ones failing, I think, but well financed new ones with an existing large customer base may be another matter. There are a fair number out there now that don't seem to have done any deals for perhaps six months.

saver861 wrote: »

However, I think my point is that the general wisdom is that around 5% but less than 10% of portfolio should be the max on P2P. The average returns are around 5%. In your case you are putting in £50k and getting returns at 15%. Your money - your call, of course, but that equation would not sit comfortably with me.

Rates vary quite a bit. What would you say about the times when I was getting 18-19% from Zopa's main market or a more prosaic 12% or 9% (around the lowest rate I have there)? Those are high compared to the current rates there though they are without the backing of their protection fund.

saver861 wrote: »

I think the key thing playing 0% cards is always to have the cash on the ready to pay them back.

Not necessarily cash, investments will do as well.

saver861 wrote: »

However £50k borrowed on cards to invest in any medium or high risk investment would be a no no for me.

And that's no problem, both borrowing decisions and investment decisions are down to the individuals concerned. Nobody should be investing in something they aren't comfortable with.

SpeedSouth

Thanks, I'll take a look

saver861

jamesd wrote: »

Not necessarily cash, investments will do as well.

Yes - I meant immediate access money regardless of where it is. It would be a very bad idea for anyone to max out there 0% cards and then not have access to cash to pay the cards off if necessary e.g. a simple mess up with a direct debit meaning the payment was late - card immediately charges interest so someone might have £10k on a card but no immediate access to £10k to pay it off.

jamesd wrote: »

And that's no problem, both borrowing decisions and investment decisions are down to the individuals concerned. Nobody should be investing in something they aren't comfortable with.

They are. I think this is also a strength and a weakness of these boards. Generally speaking, people are more inclined to talk about their gains and less ready to talk of their losses! This provides a distorted picture to readers of such boards, particularly those with less experience.

Personally I would not invest in P2P - even with the paltry rates currently etc, I'm still not pulled towards either average 5% returns P2P or your 15%.

That said, personally I think someone needs to have indepth understanding of markets, market forces, different commodities, etc etc etc to be in a position to make knowledgeable judgement on investment. Without that, then it is little more than pinning the tail on the donkey.