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Thread: Harmoney

  1. #1101
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    Here's an example of delayed processes, last night I invested in a note 64071. Before my investment there were 3 notes remaining, after my investment was accepted there were still 3 notes remaining.
    As at 0847am today almost 12 hours after my investment there are still 3 notes remaining??
    Last edited by permutation; 20-05-2016 at 08:53 AM. Reason: spelling

  2. #1102
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    Quote Originally Posted by permutation View Post
    Here's an example of delayed processes, last night I invested in a note 64071. Before my investment there were 3 notes remaining, after my investment was accepted there were still 3 notes remaining.
    As at 0847am today almost 12 hours after my investment there are still 3 notes remaining??
    I'm in the same boat here. It's not the first time this stuck loan issue has happened to me either.

    It's likely that our order will be rejected as in reality the loan has been 100% filled while the front-end is stuck on 3 notes remaining for some reason.

  3. #1103
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    I have decided to start withdrawing my money. A few reason:

    - my defaults seem very high - over 10% of capital invested. And we haven't even gone through a recession yet.
    - churn is very high - my capital has been repaid and reinvested
    - my returns are good at the moment but are basically the average RAR even though I have taken a higher risk profile
    - my returns will drop to below 10% with the new fees
    - there is a lot of effort required - have to log in 2+ times a day just to keep fully invested.
    - investments are illiquid. no secondary market yet.

    Thats all I can think of for now. I didn't put to much cash into it at this stage as I was just testing it and didn't want to lock to much up until the secondary market was created since this was effectively by 'bond' portfolio.

    Will put my money back into yeild stocks. Div plus growth will hopefully be about 10% anyway and far more liquid. Will keep an eye on the other ones but they seem high effort too (need to keep check to see if any loans avaliable) and the returns look to be under 10%.

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    So what was your investment levels - did you use single $25 amount or larger ? how much we roughly talking about ?

    Its a good point in regards to liquidity.

    For your other investments - are you talking about smartshares and stuff or other ?

    My worry is the the sharemarket is fill of grannies pushing the price up due to the low bank deposit rates. Either its going to be housing or shares.

  5. #1105
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    Mainly 1 note but I think I did a few 3's as well. I was just under $10k so the decision was to invest more to get into the next fee level, or start withdrawing.

    I have a large portion of funds in very high risk start up investments (My Gamble bucket) and a mix of high risk and growth/yield NZX investments (Diversified equity bucket). My kiwisaver is in index funds. I will put this money, and the other money I had set aside for Harmoney into a yeild/low growth diversified bucket.

    Sharemarket is full of Kiwisaver funds struggling to invest the constant flow of cash coming in.

  6. #1106
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    Quote Originally Posted by Harvey Specter View Post
    I have decided to start withdrawing my money. A few reason:

    - my defaults seem very high - over 10% of capital invested. And we haven't even gone through a recession yet.
    - churn is very high - my capital has been repaid and reinvested
    - my returns are good at the moment but are basically the average RAR even though I have taken a higher risk profile
    - my returns will drop to below 10% with the new fees
    - there is a lot of effort required - have to log in 2+ times a day just to keep fully invested.
    - investments are illiquid. no secondary market yet.

    Thats all I can think of for now. I didn't put to much cash into it at this stage as I was just testing it and didn't want to lock to much up until the secondary market was created since this was effectively by 'bond' portfolio.

    Will put my money back into yeild stocks. Div plus growth will hopefully be about 10% anyway and far more liquid. Will keep an eye on the other ones but they seem high effort too (need to keep check to see if any loans avaliable) and the returns look to be under 10%.
    Is that 10% estimate after tax?
    Harmoney P2P is definitely at the risky end of a "fixed interest" portfolio and needs a high return as a result. Harmoney reckon the charge-off rate is under their forecast but your default rate does seem high, even after allowing for the fact that the first year of a loan normally has the largest default rate. Despite churn, if most of your loans are now beyond their first year, perhaps the return will have fewer charge-offs impacting it from now on?

    Impact of a recession is an unknown. I know with my shares I have always suffered a paper loss at some stages of the market cycle, which is translated to an actual loss if I sell. I guess with Harmoney p2p you could try to reduce the impact of a future recession by taking money out as notes are repaid or by re-investing more into A & B grade notes (and then increase lower grade notes when you think a recession has peaked.)

    As a fixed interest comparison the unsecured 5 year bonds just announced by IFT earn 4.9%pa gross interest and will be listed on the DX. With Harmoney's new fee structure, does the about 5% extra net interest earned fairly compensate for the extra risk?
    Last edited by Bjauck; 20-05-2016 at 01:59 PM.

  7. #1107
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    Less than 10% is my guess at what my RAR would have been if the new fees had been in since the start. Probably reflects in part my high write offs.

    Not sure why my write offs have been so high. But when you find out you don't understand an investment like you thought you did, time to get out.

  8. #1108
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    Some stats on my portfolio:
    Harmoney.jpg
    The first 10 loans I invested in:
    Harmoney_1.jpg

  9. #1109
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    Quote Originally Posted by Harvey Specter View Post
    Less than 10% is my guess at what my RAR would have been if the new fees had been in since the start. Probably reflects in part my high write offs.

    Not sure why my write offs have been so high. But when you find out you don't understand an investment like you thought you did, time to get out.
    Some thought the 3-year terms were a safer bet than the 5 year terms - your portfolio seems to disagree with that.

    At least you are "in business" so the charge-offs are more likely to be deductible. Otherwise if charge-offs are non-deductible your net after tax RAR would have been about 5% by my guesstimate or a RAR of 7.5% grossed up. Not particularly high given the risk and as you say in a non-recessionary period.
    Last edited by Bjauck; 20-05-2016 at 04:49 PM.

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    Quote Originally Posted by Bjauck View Post
    Some thought the 3-year terms were a safer bet than the 5 year terms - your portfolio seems to disagree with that.
    I had that assumption to start with, however have found 5 year terms appear safer.
    I've got two harmoney accounts (different entities), I've invested in similar risk profiles, but one is weighted more to 3-years and the other 5-years. I'm finding the RAR is much higher with the 5-year weighted account.

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    Quote Originally Posted by Harvey Specter View Post
    Less than 10% is my guess at what my RAR would have been if the new fees had been in since the start. Probably reflects in part my high write offs.

    Not sure why my write offs have been so high. But when you find out you don't understand an investment like you thought you did, time to get out.
    Possibly not diversified enough? My rule of thumb is at least 200 loans for each grade - the more the better. I don't do E's or F's but would be wanting more like 300 of each if I did as the higher the risk the higher the volatility.

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    Quote Originally Posted by RMJH View Post
    Possibly not diversified enough? My rule of thumb is at least 200 loans for each grade - the more the better. I don't do E's or F's but would be wanting more like 300 of each if I did as the higher the risk the higher the volatility.
    more diversification may have helped but I should have had enough that the benefit would be minimal. More loans should just push me even closer to the average RAR which I was close to anyway. It would interesting to know the platform RAR per grade.

    I don't see why there is a need for so many in each grade - I think total loans regardless of grade is the key to diversification.

  13. #1113
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    Quote Originally Posted by scottwalshnz View Post
    I had that assumption to start with, however have found 5 year terms appear safer.
    Interesting

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    An automatic withdrawal function would now be useful. Saves having to login to arrange each cash withdrawal payment.

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    Quote Originally Posted by Wsp View Post
    An automatic withdrawal function would now be useful. Saves having to login to arrange each cash withdrawal payment.
    I agree. I will be using Squirrel Money's automated withdrawal feature from next month.

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    Quote Originally Posted by Chickens View Post
    I agree. I will be using Squirrel Money's automated withdrawal feature from next month.
    Peeling out? If so, for any specific reason?

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    Quote Originally Posted by Darchie View Post
    Peeling out? If so, for any specific reason?
    Not at all. After "peeling in" enthusiastically for the last couple of months I'm about to use the interest to meet a monthly expense (rates). In the words of JB@squirrel, "to synthesise an income".

    (apologies for digressing from the topic of Harmoney)

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    Quote Originally Posted by Harvey Specter View Post
    more diversification may have helped but I should have had enough that the benefit would be minimal. More loans should just push me even closer to the average RAR which I was close to anyway. It would interesting to know the platform RAR per grade.

    I don't see why there is a need for so many in each grade - I think total loans regardless of grade is the key to diversification.
    You got me thinking maybe I was being too cautious so I did some googling....
    http://www.lendingmemo.com/risk-dive...n-p2p-lending/

  19. #1119
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    Quote Originally Posted by permutation View Post
    Here's an example of delayed processes, last night I invested in a note 64071. Before my investment there were 3 notes remaining, after my investment was accepted there were still 3 notes remaining.
    As at 0847am today almost 12 hours after my investment there are still 3 notes remaining??
    And it is still stuck. Had it before too. But continues to make me wonder about their processes.

  20. #1120
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    Quote Originally Posted by RMJH View Post
    You got me thinking maybe I was being too cautious so I did some googling....
    http://www.lendingmemo.com/risk-dive...n-p2p-lending/
    That's great. Thanks for that. I would like to see a Harmoney version.

    Dispute my higher risk, I think I did have enough loans to diversify. I think it also prices my point, that more loans would just result in reversion to the mean which is what I have seen occurring.

    What is unknown is what is what is the RAR for each grade. If you look at the link you provided for the overseas version, B grade looked to have the highest, with the two riskiest grades being zero.

    So potentially I could have been an outlier and been sitting on the red line, so more loans could have improved my position slightly, but statistally speaking, I was probably average so probably would have seen minimal difference. But with the new fee structure, the new average would have been lower so I have decided to put my money elsewhere.

    I will probably still be invested here in a couple of years time as the loans do wind down, sound I do jump back in, I will probably pick a lower risk profile, which may give me a higher return.

    Conclusion - I want to see RAR by grade.

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