You are on to it mate, esp the last sentence
The money men might be able to resist th temptation
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"We've looked at the P2P lenders from the perspective of borrowing - but how about if you want to invest?"
http://www.interest.co.nz/personal-f...ou-want-invest
except that they are highly correlated to and share many similarities with the credit card market
and the credit card market was fine in the biggest recession of recent times, the GFC, as was p2p lending.
http://www.lendingmemo.com/p2p-lendi...n-performance/
"Investing" in Harmoney loans is almost the same as gambling especially the E & F grades. It's a pretty addictive game this so called P2P investing which a fairly new game in NZ and the real test for P2P lending will come during a recession. Harmoney keeps boasting about how much money it's lent but IMO HM should be talking more about how much of "investors" money it has recovered.
IMO Squirrel Money is the best platform out of all the p2p platforms in NZ as you are far more likely to at least get your money back when a recession hits. Warren Buffet's two rules are: 1) Don't loose money and 2) Don't forget the first rule
But returns did steeply dive by 20-40%...
i could easily suggest that it is a leap of faith to correlate credit card debt and p2p lending.
It might work out that way.
As I said I am totally for the industry , I think its a great innovation, I just want folks to have a good idea about the risk.
Question for everyone here investing in P2P:
How much of your portfolio is in P2P lending? I have roughly 18% at this stage