Peer to peer lending

[Condi]

LooneyTunes said:

No you've not. Caveat emptor is not the same as someone being able to properly determine risk and PD.

Can you please tell me anything you can properly determine risk on please? Every investment has opaque risks which are impossible to understand or predict. For example thinking about the business' we supply at work, the weather is a risk for all of them, but that is impossible to predict from season to season. You can 'average' the risk, but that is worth nothing if you get a 1 in 100 year event and the business is unable to survive it!

[Behemoth]

LooneyTunes said:

I just question whether people actually know what they're in to and whether it should really be a retail product (instead of being sophisticated/HNWI investors only).

If you've a problem with how it's marketed then go complain to the ASA etc. I'm sure some platforms push the boundaries and make inappropriate claims. I'm not subject to these ads as I don't watch the sort of TV it's probably aired in.

By all means clamp down on the marketing claims but you can't restrict people's freedom to decide for themselves what's risky and what isn't. We live in a liberal capitalist democracy and the information to make investment decisions is freely and transparently available to all who choose to do their research. Invest only in what you understand. That goes for finance professionals as well as individuals.

I have some sympathy for the old world where, for the vast majority, you had a job, made contributions, and the state sorted you out a reliable pension. But we're way past that stage.

[h0b0]

I'm in a US P2P group that is returning 12% after I take into account late payment. If everyone paid on time I would be at 19.5%

My exposure is only $25 per loan and I have a spread of credit profiles covering low risk, low return all the way to nearly 30%.

The numbers are very impressive and it's looking sustainable. After the first test year I plan on ramping up my investment and getting relatively serious.