What's higher risk equities or peer to peer

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

in a recession, all markets are affected. including healthcare.

msallen

jamesd wrote: »

When you withdraw money from a flexible ISA like Ablrate's you're allowed to make "replacement subscriptions" up to the amount withdrawn...

I didn't think Ablrate had launched their ISA yet. Do you know that it will be flexible when they do?

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.

jamesd

msallen wrote: »

I didn't think Ablrate had launched their ISA yet. Do you know that it will be flexible when they do?

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

Bank of England warning today that credit card defaults are rising. Is this being reflected in P2P defaults or rising rates?

bigadaj

aldershot wrote: »

Bank of England warning today that credit card defaults are rising. Is this being reflected in P2P defaults or rising rates?

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.