Investment advice

[Roger Irrelevant]

All that jazz said:

I've used both RateSetter and SavingStream for some small amounts (£1k a piece) over a year at 6% (iirc) and it all worked out fine. When I did some beermat comparisons it worked out roughly double the return I'd have got on an ISA or the highest paying high street savings account over the same period, so all good imho.

It's great that this has worked out for you, but comparing FSCS-backed high street savings account and cash ISAs (i.e. very low risk investments), with P2P lending is a little bit odd. With the latter you carry a much higher risk of capital losses so you'd want a higher expected return to compensate. It's a legitimate investment alright but I wouldn't want a significant portion of my investment portfolio in it, especially with the economic outlook being a bit shaky.

[Mal001]

Thanks for your reply Jon.

I'll take a look on the other thread and make some notes.

It might be a good idea to implement a better strategy now given the current turmoil!

[otherman]

All that jazz said:

I've used both RateSetter and SavingStream for some small amounts (£1k a piece) over a year at 6% (iirc) and it all worked out fine.

This shows why I recommend thin cats. These vehicles should not be compared to savings accounts or isa products, and 6% is not enough when there's some risk involved. Both of the companies you mention allow very small investors and bidding on loans takes the rates unrealistically low. Not what OP wants at all I don't think.

[SirBlade]

digger_R said:

I'm looking for some advice, looking mid to long term (5-15 years)

I have over 100k -150k I want to invest, and I'm looking for a good return (8% +).
To the smart investors, where would your money go? Ideally (relatively) low maintenance on my part would be fantastic.

For some background, I haven't been able to get a mortgage - as I've been living out of the country for a long time and don't have a PAYE job. I was an IT contractor and I'm now looking at moving overseas again (and not being in the regular working sphere for a while) so I'd like the cash that I have to be working for me.
Over to you!

Contact Horseman capital in London.
Shorting has worked well for them, 25% well.
Minimium entry is 100K, currently in soft close.
I was not allowed in, probably because of who I am.
Muscular director, etc, etc.

[SirBlade]

In addition to my stellar advice, I shall say this.

Dividend reinvestment is frequently over-looked by people,
who usually dismiss it by say "it requires loads of capital".
You can check that box, so why not invest and be happy with 3% and a dividend growth rate of 15%?

One last thing, XAU is going to go ballistic, get your hands on some phyz.
Paper gold to phyz ratio is now 550:1
Rhodium is not doing nearly as well.
Store your phyz in a vault under your control.

[All that jazz]

Roger Irrelevant said:

All that jazz said:

I've used both RateSetter and SavingStream for some small amounts (£1k a piece) over a year at 6% (iirc) and it all worked out fine. When I did some beermat comparisons it worked out roughly double the return I'd have got on an ISA or the highest paying high street savings account over the same period, so all good imho.

It's great that this has worked out for you, but comparing FSCS-backed high street savings account and cash ISAs (i.e. very low risk investments), with P2P lending is a little bit odd. With the latter you carry a much higher risk of capital losses so you'd want a higher expected return to compensate. It's a legitimate investment alright but I wouldn't want a significant portion of my investment portfolio in it, especially with the economic outlook being a bit shaky.

It isn't though if you read the blurb. No disrespect to you but I see that sort of misinformation posted all the time and that's not how it works. Your money is not loaned out in one big chunk, it's split into loads of tiny amounts and every borrower only gets a very small amount from one person, with the rest of the loan made up of equally small chunks from all the other lenders. So if the borrower defaults then you only lose say, a tenner, rather than the full grand.

Also those lower interest rate ones (c. 6%) are considered to be the lowest risk borrowers with an extremely miniscule chance of default. It's the 10-15% ones which are considered medium to high risk and naturally the interest rate reflects that, but even so the same principle applies and if one (or more) of those borrowers were to default then sure, you're down a few quid but it's not the end of the world. There are several threads on there where this has happened.

As for the faith in the FSCS - well forgive me if I pass on that one thanks. If the st were to hit the fan big style over here and banks/building socs started going belly up I wouldn't want to fancy my chances at being able to move any sizeable amount out and elsewhere, despite the regular repeated promises on the radio and TV. We only have to look in the direction of Cyprus to see how well government promises panned out for them.

[Roger Irrelevant]

All that jazz said:

It isn't though if you read the blurb. No disrespect to you but I see that sort of misinformation posted all the time and that's not how it works. Your money is not loaned out in one big chunk, it's split into loads of tiny amounts and every borrower only gets a very small amount from one person, with the rest of the loan made up of equally small chunks from all the other lenders. So if the borrower defaults then you only lose say, a tenner, rather than the full grand.

Yeah I know how it works, and I never said it was a binary choice of 'get 6% (or whatever) return OR lose the lot'. Spreading the amount you invest over lots of loans does reduce the risk but the fact remains that you are still exposed to one very narrow asset class with a reasonable degree of correlation between each asset in it. I.e. it's all very well saying that if one loan goes belly up you've only lost a tenner so who cares, but there's a not-insignificant chance that there was an underlying cause of that loan going bad (say a general economic slowdown), that means others may well go bad too, and you end up with a capital loss.

I'm not saying it's a bad thing to invest in, or even that it's any riskier than any other investment that promises a 6% return, but people need to realise that P2P lenders aren't financial alchemists who can magic up a 6% return that's just as safe as a cash ISA, and it's not really the sort of thing that somebody who's after something safe like a cash ISA should be considering.

[digger_R]

To summarise

-> Property for cash (anywhere from 5-12% gross - not accounting for voids, management, upkeep)
-> P2P (6-15 % gross). I'm interested in some of those suggestions as they look to be pretty easy to manage online. Though I'm uncertain of the risk profile, after a little reading it looks quite specific to the platform. Thin cats is one of the few along with FC that is recommneded?
-> Shares (requires a separate thread/book etc a lot more effort in trying to beat the market)
-> funds (6-15%) inc Woodford - I had Invesco in an ISA for a few years, seems the best fire and forget approach


Was wondering if any on here own HMOs (managed), the returns look to be quite decent if you account for long term capital growth.