Quote Originally Posted by Fisherking View Post
Wow, so your RAR must be ~26%? Well done. To be this high you must be invested in very low grade loans and either got lucky or have not been in for long enough to see the defaults come through - you need a couple of years.
Been away... How can you compare 1 year of strong share growth but then say I can't compare that to 1 year of strong P2P growth - I think you missed my point, it was somewhat subtle but that is my way...

I don't need anything like 26% RAR to achieve 18% growth... Compounding of interest (i.e. reinvestment) is a very powerful growth factor for P2P which shares do not have (many here simply don't seem to get this...). Let's say I earn 15% growth (interest-fees-tax) in a year, that means my principal for the second year (it's monthly I know, but showing it for a year is easier) is 15% larger than it was the previous year, so it will earn an additional 2.25% the second year 3.32% the third year etc. (performance is even better with monthly interest as it is with Harmoney). You do not get compounding with shares.

Even at modest interest rates, I'd suggest Harmoney investments will outperform shares in as little as 5 years, and that's on the up-cycle with shares... Of course you need to make some effort to not pick loans that are more likely to default, same as shares - you don't pick crap shares - this is what makes the difference between those who make good returns and those that don't.

RAR will not show this end-on-end growth, it simply looks at individual loan growth.