Peer-to-peer lending sites: MSE guide discussion

takesyourchances wrote: »

Is anyone investing in Ablrates new portfolio loans and any thoughts on these?

I have invested £500 so far and thinking to invest some more, interested if others have. Also when single loans are dry, I would like to reinvest interest into the portfolio loan.

Thanks

Not as yet because the first portfolio is to a single company which I already have loans to (at a higher rate).

When the existing loans repay later this year then this particular portfolio will just be another loan to diversify in alongside their standard loans (albeit at a lower rate). Future single company portfolio loans will be the same.

Multi-company portfolio loans, when they start, may be of interest as a "ready diversified" option, and they will also include an element of protection from default via Ablrate giving up some of their profit on them.

In general I am not overly enthused by these portfolio loans, but they have a place.

jamesd wrote: »

I'm not really sure of how this particular structuring of portfolio loans makes sense:

Low rate and large size both tend to lead to delays getting money out. Lack of premiums and discounts does as well. If it's used as a short term money park where's the half million or million Pounds needed to let people withdraw when an attractive new loan arrives going to come from?

Not going to get any of my money. It looks like a low rate liquidity trap.

i am a bit confused by this product/loan as although this loan has not completed people on the P2P indie forum are saying they have already taken money out as a test and had one days interest paid as well.So would seem there is some liquidity at the moment as it looks like new sales are coming from resells first (i think)

takesyourchances wrote: »

hoping it could have a solid place as a long term hold on the platform for some funds. ...I was wondering when loans repaid when fresh loans are slow could this be a good place to at least invest repayment interest.

Why? It's usually easy to buy on the secondary market and get a higher effective interest yield. Not so if everyone was doing it, perhaps, but it is today.

I like the idea of easily liquidity but I don't see how this delivers enough of it to meet the demand when a new loan comes along. If MTF has drawn and lent say 1.5 million with 100k in the queue for the next tranche, how do people get out say 750k they want to invest in a new loan? That's the sort of answer I need.

At one point I had around 25k in loans to MTF and I like their onward lending model on invoice finance. If I thought the product could deliver liquidity I'd be happy to use them.

takesyourchances wrote: »

with the recent stockmarket movements are you still investing as heavy in P2P or are you diveresting a bit more back to the stockmarket?

Not as much as I want in P2P yet and I sold about 20% of my equity holdings on Monday, about 10% of my total investments. I'm looking for a far deeper drop before going the other way and at the moment we're still potentially in catch a falling knife territory. There's clearly significant buying demand but I wouldn't be positioned as I want to be for a possible bigger drop if I went back in.

What I might do is place some short financial spread bets with guaranteed stop-loss as further downside protection.

Guaranteed because in market conditions like this prices can gap a lot lower or higher overnight or even during the trading day and cause the stop-loss to be missed or carried out at a very different price. Say you bought short at 100p with a stop-loss at 105p and the market went up to 110p overnight. A non-guaranteed stop-loss could only be executed at 110 but with a guaranteed one you'd get the 105.

All of my equities other than VCTs are in pensions so this has the potential advantage of taking losses inside a pension and profits outside, effectively extracting money from the pension.

Financial spread bets are a high risk product with the potential to lose more money than your initial investment. What I just described, though, was how to use them to reduce your overall potential loss.

jamesd wrote: »

Why? It's usually easy to buy on the secondary market ang get a higher effective interest yield. Not so if everyone was doing it, perhaps, but it is today.

I like the idea of easily liquidity but I don't see how this delivers enough of it to meet the demand when a new loan comes along. If MTF has drawn and lent say 1.5 million with 100k in the queue for the next tranche, how do people get out say 750k they want to invest in a new loan? That's the sort of answer I need.

At one point I had around 25k in loans to MTF and I like their onward lending model on invoice finance. If I thought the product could deliver liquidity I'd be happy to use them.

Not as much as I want in P2P yet and I sold about 20% of my equity holdings on Monday, about 10% of my total investments. I'm looking for a far deeper drop before going the other way and at the moment we're still potentially in catch a falling knife territory. There's clearly significant buying demand but I wouldn't be positioned as I want to be for a possible bigger drop if I went back in.

What I might do is place some short financial spread bets with guaranteed stop-loss as further downside protection.

Guaranteed because in market conditions like this prices can gap a lot lower or higher overnight or even during the trading day and cause the stop-loss to be missed or carried out at a very different price. Say you bought short at 100p with a stop-loss at 105p and the market went up to 110p overnight. A non-guaranteed stop-loss could only be executed at 110 but with a guaranteed one you'd get the 105.

All of my equities other than VCTs are in pensions so this has the potential advantage of taking losses inside a pension and profits outside, effectively extracting money from the pension.

Financial spread bets are a high risk product with the potential to lose more money than your initial investment. What I just described, though, was how to use them to reduce your overall potential loss.

Thanks James always great to read your thoughts - very valid point on the secondary market, at the moment it has been easy to buy on Ablrates secondary market, which has been great and I have been using my interest repayments between loans to do this. I can always try and draw down the portfolio loan if needs be, I have been given second thoughts on increasing what I have already put in. I understand your point on the liquidity of the portfolio loans.

At the moment Albrate is still my favourite platform out of what I hold. I try to balance between P2P and S&S with new money going in. Recent loan offerings in MT and Collateral which I did not fancy slowed my P2P pace down a bit, what is your thoughts on these platforms at present? that is interesting you are still looking to increase your P2P. My overall P2P has reached £17k at present and I have started to see the return so far, hopefully that continues and always looking to learn.

The recent stock market drops I understand are not extremely deep to go back in heavily, really only going back to prices of a few months ago. I am building some cash as well on the side to use for any larger drops, but balancing investing regular between S&S and P2P.

The spread betting is something a bit beyond me, bit too complicated being honest for my stage of investing. I have took the buy and hold approach with my equities and drip feeding but I read with interest what you have decribed.

Thanks again James, great input and I appreciate it.

economic wrote: »

im looking to exit from P2P slowly. I figure that the next recession in the UK is within 2-3 years away. Itll probably take a year to derisk from everything (some loans would have to be sold for a small cost) by which time i think the risks of a recession occurring would have increased. increase in defaults should happen prior to actual recession anyway.

Remember P2P has not been tested in a recession. I imagine many of the loans i own are at serious risk of default if a recession were to occur. P2P is not a long term investment - its highly cyclical + it can be argued its good now given low rates. Worse then the stock market as there is a much higher risk of permanent loss. Which is why i will invest the money in stocks instead.

Interesting various thoughts on P2P at the moment. I did slow down my input over recent months, the quality of some loans were not as good I thought compared to earlier last year. A few are in default still, but at the moment overall it has returned well. Would you feel you want to 100% exit P2P?

I have a much higher investment overall in stocks than P2P but my P2P balance has grown. I was withdrawing some money from Moneything and Colateral recently on repayments and those went into stocks as little of interest was around.

Which platforms are you invested in?

It is hard to know which direction the UK is headed, but most P2P platforms have not seen a recession thats true. My first P2P was when Zopa started with smaller amounts.