Investing, without the middleman September 7, 2007
Posted by CamdenKiwi in : Investing , trackbackWith all the doom and gloom around financial markets at the moment, its hard to know where to invest. When the banks are reluctant to lend to each other, I certainly don’t want to be lending my hardearned, albeit small, savings to them. The green stocks have stayed up rather well, though the funds make me nervous. This probably isn’t a good time to be playing with shares, unless you really know what you’re doing.
An interesting thought from Zopa, at the end of a good simple explanation of the problem with collateralised loans, is that they may well benefit from the credit squeeze if it hits the small loans market. I put a few hundred pounds in here a couple of months ago as an experiment, and so far, my money has gone out to help people buy cars in Reading, Dudley and Brighton, do home improvements in Salisbury, plus a few consolidating existing debts. The interest rate beats ordinary savings, and defaults are low. The risk of default is spread across many lenders, so even if one of my borrowers disappears, I’ve only lent them twenty quid. Apparently Zopa have plans to be available to SIPPs, which will make it even more attractive.
Most importantly, its pretty clear where the money comes from, and where it goes and, because its simple, fees are low. Right now, even those who spend their lives at it don’t seem to have a clue where the fallout from all this is going to land. For the rest of us then, transparency and clarity are even more important than usual.
Technorati Tags: zopa
Comments»
no comments yet - be the first?