Future of P2P investment. Is diversification the real answer?

keyboardworrier

Aceace said:

Thrugelmir said:

Aceace said:

To compound this the FCA have shown themselves to be rather inept in their regulation and their protection of investors, so best not to rely on them.

When there's money to be made everyone's happy. When it goes pear shaped it's someone elses fault. Investors have to learn to be responsible for their own choice of investment and the risks attached. 

That's precisely the point I was intending to make. Don't rely on the FCA. 
However, the FCA is supposed to protect investors and it has spectacularly failed due to its own incompetence.

As an investor in Collateral, I completely agree with this!

Thrugelmir

Aceace said:

Thrugelmir said:

Aceace said:

To compound this the FCA have shown themselves to be rather inept in their regulation and their protection of investors, so best not to rely on them.

When there's money to be made everyone's happy. When it goes pear shaped it's someone elses fault. Investors have to learn to be responsible for their own choice of investment and the risks attached. 

That's precisely the point I was intending to make. Don't rely on the FCA. 
However, the FCA is supposed to protect investors and it has spectacularly failed due to its own incompetence.

People need to question their own competances before making any investment decision. Not seek to blame with hindsight.  Getting ones fingers burnt is part and parcel of risk taking. You'll never stop learning throughout your lifetime. 

Albermarle

Investors have to learn to be responsible for their own choice of investment and the risks attached. 

It's a nice idea but the reality is that gullible/inexperienced ( sometimes experienced as well ) need to be protected from scams/over optimistic or misleading advertising etc .

Although in practice the protection is at best patchy and often it is a case of shutting the stable door after the horse has bolted 

dunstonh

Yes but that is with the benefit of hindsight 

Its not hindsight. You generally look to get medium risk or higher to more or less double in ten years.

Thrugelmir

Albermarle said:

Investors have to learn to be responsible for their own choice of investment and the risks attached. 

It's a nice idea but the reality is that gullible/inexperienced ( sometimes experienced as well ) need to be protected from scams/over optimistic or misleading advertising etc .

Although in practice the protection is at best patchy and often it is a case of shutting the stable door after the horse has bolted 

Over optimism is generated by investors themselves. Self fuelled by discussion on public forums. There's little time for negative views or opinions. Investors like the comfort of being in the herd.  

mikb

Lukelo said:

... some of my friends told me about P2P investment.

Wait until your friends get round to tipping you off about Bitcoin! Then you'll be all set!


What appears to have happened is that your friends have told you about a stonking party, which you have just arrived at to discover it's winding down, and we're starting the clean-up phase. Grab a bag, a mop and bucket, and some gloves and join in!


A lot has changed since P2P started -- returns have fallen, risks have increased (or at the very least, been made more visible), platforms that introduced Safeguard/Provision funds either withdrew them entirely, or suddenly started getting people warmed up to the idea that it was a discretionary payment, and may not pay out some, or all, of any losses, and the clear relationship between lenders and borrowers has been muddied by all sorts of "black-box" simplifications.


And worse, borrowers have cottoned on to the fact that some platforms don't do due-diligence before, or enforcement after. So it's an easy touch for some free money.

Lukelo

mikb said:

Lukelo said:

... some of my friends told me about P2P investment.

Wait until your friends get round to tipping you off about Bitcoin! Then you'll be all set!

Haha, I think I missed this train already  

A lot has changed since P2P started -- returns have fallen, risks have increased (or at the very least, been made more visible), platforms that introduced Safeguard/Provision funds either withdrew them entirely, or suddenly started getting people warmed up to the idea that it was a discretionary payment, and may not pay out some, or all, of any losses, and the clear relationship between lenders and borrowers has been muddied by all sorts of "black-box" simplifications.

Thank you for your feedback! Can I ask if you tried to invest in P2P loans?

Lukelo

Aceace said:

Unfortunately,  P2P has been tainted by some very bad, and in some cases fraudulent, platforms. Understandably, well intentioned victims of those platforms are very vocal in discouraging others from getting similarly burnt. It's important to take these views into consideration as a warning as to what can go wrong. To compound this the FCA have shown themselves to be rather inept in their regulation and their protection of investors, so best not to rely on them.

Hello Aceace, 

Thank you very much for this detailed information. 

Maybe you can name those platforms that you have used or are using right now? Thanks!

Thrugelmir

mikb said:

Lukelo said:

... some of my friends told me about P2P investment.

And worse, borrowers have cottoned on to the fact that some platforms don't do due-diligence before, or enforcement after. 

Alternative view is that expectations were misguided at the outset. Far too high. 

jamei305

It's not a viable business model. It's good for borrowers but to make it sustainable the lenders need institutional-sized pockets. The pool of consumer-lenders isn't capable of lending profitably through all the ups and downs of the market.