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Post by grahamreeds on Sept 26, 2017 9:12:57 GMT
There is a dead zone for investors where the size of the portfolio isn't used fully. The general equation is portfolio ÷ 200 but on my portfolio of £25k I am getting £127 invested (not 125.5). Last week I was on 23k and were only getting £100 blocks since my portfolio ÷ 200 = 115. Since you can't purchase new loan parts for £15 I was left with just £100 of my £115 allocated.
Also has any one had a block amount less than their full size? Ie: you only have £80 left in your account it will use that and not wait until you had the full £100? I had £108 for two days end of last week that sat there so I am suspicious.
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Post by p2perrr on Sept 26, 2017 10:43:15 GMT
Yep: seems determined to invest in £134 parts for me, (£100 + £34). This is madness - I don't want such a large amount in one loan, particularly NOT Property.
There should be more parameters available, rather than just saying Balanced or Conservative.
I think I have had the occasional part from the SM, but mostly £134 chunks in new loans.
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fasty
Member of DD Central
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Post by fasty on Sept 26, 2017 17:41:44 GMT
This is related to my question as to why none of my free funds were being invested.
After complaining to FC, they tell me today that their trained pixie won't loan anything unless the funds available exceed 0.5% of the existing portfolio value.
So, yes, if you intend to just leave funds to earn interest and compound returns, you are frustrated by a significant amount of uninvested funds.
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Post by GSV3MIaC on Sept 26, 2017 20:30:43 GMT
I would not consider 0.5% of anything to be 'significant' .. I usually try to have 1-2% of my funds liquid on any platform which has a SM, so I can pounce if required (no longer an option/issue on FC, of course). The cash drag (average 0.25%, of the average 7.5% you are supposed to be earning .. unless you are conservative investor, in which case it 0.25% of 4.8%) is down in the noise, compared to the default rate, and variability of same.
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fasty
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Post by fasty on Sept 26, 2017 20:43:13 GMT
I would not consider 0.5% of anything to be 'significant' .. I usually try to have 1-2% of my funds liquid on any platform which has a SM, so I can pounce if required (no longer an option/issue on FC, of course). The cash drag (average 0.25%, of the average 7.5% you are supposed to be earning .. unless you are conservative investor, in which case it 0.25% of 4.8%) is down in the noise, compared to the default rate, and variability of same. Agreed, on reflection it's a trivial amount. It would have been nice to have known about it though. Presumably this method helps to reduce the proliferation of £20 loan parts created as interest accrues and is reinvested?
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bloodycat
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Post by bloodycat on Sept 26, 2017 21:22:51 GMT
This is related to my question as to why none of my free funds were being invested. After complaining to FC, they tell me today that their trained pixie won't loan anything unless the funds available exceed 0.5% of the existing portfolio value. So, yes, if you intend to just leave funds to earn interest and compound returns, you are frustrated by a significant amount of uninvested funds. So not only have they removed all control over what loans you are invested in, but are effectively restricting how diversified you can be? I know that statistically the reduction of risk from further diversification becomes increasingly small above a certain number of loans, but I would still prefer to have smaller amounts spread across more loans.
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Post by grahamreeds on Sept 26, 2017 22:21:53 GMT
This is a problem I currently have. A £127 loan defaulting will wipe out my entire months interest. That I consider unacceptable. Fortunately there is way around it but I have told FC that if this work around becomes too tedious or FC close the loophole then I will probably depart for pastures new.
The example I used was walking into a casino and the croupier deciding what number you were going to pick and how much you were to bet for each spin.
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Stonk
Stonking
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Post by Stonk on Sept 26, 2017 23:46:26 GMT
The example I used was walking into a casino and the croupier deciding what number you were going to pick and how much you were to bet for each spin. Not the best example, I'm afraid! Allowing a casino croupier to decide your roulette plays and bets has precisely the same expected outcome as deciding by yourself. It is more interesting to make the choices yourself, but on average it will have the same outcome. Which, many would agree, is exactly the opposite of FC. Anyway. Although you have loan parts that will wipe out a month's interest if they default, the thing is, you have fewer loan parts. With fewer loan parts, you go longer between defaults. Sure, each default hurts more, but there are fewer of them. If you had smaller parts, no individual default would hurt as badly, but there would be more of them. It will, on average in the long term, make no difference (assuming you have "sufficient" diversification). I do think FC should permit a configurable level of diversity, because not everyone -- myself included -- considers 200 businesses to be sufficient diversification. And smaller loan parts would smooth out the losses, which is basically what you are getting at. You would, I suspect, prefer to have a consistent level of small defaults, rather than the occasional big one.
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Post by grahamreeds on Sept 27, 2017 9:29:41 GMT
Had I been able to place my own bets I would gamble with a lot less - that is my main gripe.
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Post by grahamreeds on Sept 27, 2017 15:00:37 GMT
The general equation is portfolio ÷ 200 but on my portfolio of £25k I am getting £127 invested (not 125.5). I am now getting £126 investment per block - it switched some point this afternoon. Coincidence...?
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blender
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Post by blender on Sept 27, 2017 15:34:46 GMT
Nope. The wires on the FC abacus have just cooled a little.
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p2p2p
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Post by p2p2p on Sept 27, 2017 15:36:41 GMT
I'd not want to manage 200+ loans myself. On other platforms I'd like to get to 100 loans but few are big enough players. I'm becoming more drawn to just dumping cash here and stopping the obsessive monitoring and forum reading I feel forced to do elsewhere. Which is of course FCs aim. If you are getting 1% of your portfolio in interest each month and 2% redemptions, the cash drag disappears in the churn.
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