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Thread: Harmoney

  1. #2361
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    Quote Originally Posted by myles View Post
    A couple of additional thoughts on this, this morning. 13.8% per year is equivalent to 19.7 compounding interest over 5 years. You will pay capital gains tax on the sale of the shares in NZ? So I think the comparison would be back into the high B or C1 grade loans?

    You wouldn't want to put all of your money into one Smartshare (even though it is a mixed portfolio) - so you would want to diversify into others that would not have such a good return. [Some of the mix would be hit hard in a down turn].

    In a downturn shares will likely run at a significant lose, a good mix of P2P loans may not. Historically P2P performed better in the last down turn.

    My thoughts only, others will likely see it differently. [N.B. I watch 200K disappear in shares in and around 2008, but gained it all back, but not by simply holding the same shares...]
    Well heres my spread - if my net investment value where indexed to $100

    Rental property - $109.61
    Managed Funds - $22.10
    Harmoney - $17.31
    Shares - $9.18 (my own picks)
    Kiwisaver - $4.18
    International ETF's - $3.16
    Private Equity - $3.12
    Other (lego... lol) - $1.53
    Cash - $0.29

    Debt - $70.49

    Net Investment Value - $100.00

    Excluding my mortgage free private residence and my car.

  2. #2362
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    Quote Originally Posted by icyfire View Post

    Picking individual shares is risky. Investing in ETFs is a much safer bet.
    Less variance, over a large sample size would be interesting to see which has higher ROI.

    I have had awesome picks like Scales, Tower at 72c, FPH, Airwork, Summerset, Genesis @ IPO etc

    But then dogs like Orion health, Warehouse, Xero (although its making a comeback)... and then my biggest monumental loss - slater and gordon, I kept buying as it was dropping...

  3. #2363
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    I like Warren Buffett's quote on this article "you do not want to ever get the impression that you can pick stocks" and that "can enable you to have an edge. It just doesn't work that way."
    Picking loans on Harmoney is pretty much the same as picking individual shares.

    I still think that investing in local and international index funds via Smartshares would produce a higher net return in the long term (5 - 10 years) than investing in Harmoney loans considering Harmoney's high fees, time-consuming process and risk.

  4. #2364
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    Quote Originally Posted by icyfire View Post
    I like Warren Buffett's quote on this article "you do not want to ever get the impression that you can pick stocks" and that "can enable you to have an edge. It just doesn't work that way."
    Picking loans on Harmoney is pretty much the same as picking individual shares.

    I still think that investing in local and international index funds via Smartshares would produce a higher net return in the long term (5 - 10 years) than investing in Harmoney loans considering Harmoney's high fees, time-consuming process and risk.
    I don't pick loans in harmoney, I have 1200+ loans, so I effectively buy the index lol - the index of B - E loans.

  5. #2365
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    Quote Originally Posted by alistar_mid View Post
    I don't pick loans in harmoney, I have 1200+ loans, so I effectively buy the index lol - the index of B - E loans.
    Are you investing in all B - E loans?

  6. #2366
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    Quote Originally Posted by icyfire View Post
    Are you investing in all B - E loans?
    Was investing, am on auto withdrawal now until i get back to a safer level cause I had just over $100k in at one point.

    But yeah was investing in everything but the overly safest B loans, and the overly unsafe E loans - I think anything above a 5% default rate I ignored. My split is detailed in earlier posts.

  7. #2367
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    Quote Originally Posted by Cool Bear View Post
    I have about the same number of loans as you but my charge off is about 20% of gross interest - about 2 in a 100 loans goes bad so far. You are in the safer A to D loans, which carries lower risk if the world economy turn to custard. Mine is quite well spread out over the 6 grades. I presume my current RAR should be higher than yours as I am carrying much much higher risk if the economy goes down. My current RAR is just over 14%. What is yours? (the pertinent question is whether the extra percentage or two is worth the risk?)
    Bumps along just under 14%. With last month's increase in availability of loans it dropped to 13.8%. I don't think E's and F's add much to return. But if you are struggling to get volume I can see why people buy them even though not the best value.

  8. #2368
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    Invested money for the first time today. Just doing one note per loan and i've been on most of the day checking whats available. I can see that without using autolend it's going to take ages to invest quickly. I'm enjoying the experience so far

  9. #2369
    yeah, nah
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    Quote Originally Posted by icyfire View Post
    Are you excluding the compounding interest you earn on Harmoney?
    No? The average yearly interest (each year) to get 19.7% compounded is 13.8% - i.e. this is what you need to get with Harmoney (after fees and tax) to match your 19.7% compounded over 5 years.

    Quote Originally Posted by icyfire View Post
    If one company in the fund goes down another company takes its place in the fund.
    The point is, in a down turn it won't be just one company. The return of your shares will likely turn negative for at least a year or two - this is what happened in 2008 to many, many, many funds. Unlike P2P Lending - if you review what happened overseas - would it be any different here?

    Quote Originally Posted by icyfire View Post
    Picking individual shares is risky. Investing in ETFs is a much safer bet.
    The 200K loss was over more than 100 different shares and various managed funds - significantly more diversified than the Smartshare you refer too. The Smartshares are made up of individual shares... You sound like you think it is a sure thing, even in a down turn - I can assure you it is not.

    On tax - that depends on how and what you trade in - accountant required.

  10. #2370
    yeah, nah
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    icyfire the graph below might help picture what can happen with shares - the S&P 500 is the one referred to in the link you provided about Warren Buffet:

    Attachment 8968

    So a mix of the top 500 US companies.

    If you invested in 2000, you had a wait of nearly 15 years (2014), before you got back to were you started. Timing is everything, but very difficult to predict. One or two bad years can take a long time to claw back... If you have the time, you 'should' always come out on top. However, if you need to draw down on the money at a fixed point in time (i.e. when you retire), you might have to draw at a time of loss.

    How that compares to P2P Lending - time will tell, you can only look at what happened OS in 2008 to get a feel for what might happen? There are no guarantees either way...

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