Quote Originally Posted by blackcap View Post
Agree compounding is a very powerful growth factor. But disagree that you do not get compounding with shares. You do. Dividends are/can be reinvested and any earnings the company retains are often reinvested in the company which leads to higher EPS the following year.
15% growth on lending is not sustainable long term. You have probably got lucky. At 15% you will experience total capital degradation or write off of a few of your loans over time.
I don't fully disagree, but the compounding effect is very different. In 'lean' years you don't get dividends, typically dividends run at only 2 - 3%. When shares drop significantly, which they do, it can take a very long time to claw back those losses. Neither of these occur with P2P Lending. However you do get share value growth in good years, but to offset that you get share value loss in bad years (usually quite significant).

My return is currently running at just under 18% (after tax and fees), but I view my predicted actual return based on deducting all loans in arrears over 30 days, which gives me a current return of just over 15%. The total number of loans in arrears over 30 days appears to be fairly stable for me now, but perhaps this will change? Interestingly if I use Harmoney figures of expected defaults I get a predicted return of 15.47% (seems to be a reasonable value). My actual over 30 days arrears rate is 1.23%, Harmoney predicted figure 1.58%, however the loans in arrears returned in the exported report from Harmoney do seem to have major issues i.e. loans in arrears are not reported as being in arrears...

With over 1000 loans I don't think 'luck' has all that much to do with it?