[jonah]

As I mentioned in the subject line, I'm very new to Lending Club, created my account 3 weeks ago.  My question is in regard to diversification within my trading account.

I would be interested to hear opinions based on my trading and current notes invested.

1.  At the moment I invest in notes in Debt Consolidation and Credit Card Refinance in the following grades:
Grade A: 30%   Grade B: 40%  Grade C: 30%

Notes invested in: 40   Will be investing in at least another 60 notes maybe 160 notes with in the next week.  I invest in $25 notes.

I would like to continue investing in Grade A,B,C notes in debt and CC catagories. 

Am I diversified enough for the time being, lets say for the next month.  Or should I invest in other categories? such as car finance etc...

Can an investment be diversified enough only in Grade ABC notes in Debt Consolidation and CC refinance?  Or am I better off diversifying in other categories such as car financing, home down payments etc.... (as an example)?

Now I'm questioning my investment strategy!

My goal is to reinvest and continue to add cash for investments. 

[jz451]

I'de recommend when investing the rest of your money to stay away from A grade it returns only about 5% and B grade returns almost 7% and that is without any filtering. Since you're new I'de recommend going to nsrplatform.com create an account and play with their backtesting filters to optimize note selection for what you are comfortable with. Since you're already heavily invested in A grade loans it would be better to invest in a breakdown something like 10% A, 30% B, 50% C, 10% D, or    10% A, 40% B, 40% C, 10% D.

[TravelingPennies]

I appreciate the input, will keep this in mind when investing.

Thank you,
Jonah

[rawraw]

Step 1: Define your investment objective.
Step 2: Define what risk you are willing to take (how much are you OK with losing?)

After you answer those above, I think you can start to decide how to execute the strategy.  People will be very upset with A borrowers, until the day where they may be the only one with positive returns.  Setting the rules up front on what you want is key in my opinion.  And having arbitrary return numbers is normally a bad idea.  Relative measures normally get you in less trouble

[TravelingPennies]

from: rawraw on November 05, 2016, 02:09:42 PM

[TravelingPennies]

Overall investing in all loan purposes does not make a big different in performance so it's up to you to only invest in only debt consolidation/credit card payoffs.

from: jonah on November 06, 2016, 09:49:19 AM

[TravelingPennies]

from: jonah on November 06, 2016, 09:49:19 AM

[Fred93]

from: jonah on November 05, 2016, 12:16:53 PM

[TravelingPennies]

After doing some more research on Lend Academy and reading the replies I've received, I feel confident with my strategy.

I want to thank those who replied to my post!

[SLCPaladin]

from: rawraw on November 05, 2016, 02:09:42 PM

[Larry321]

I think the proper investment goal should always be to meet or better the Dow.
You can always put your money into a DJ fund and match the market. The goal should be to beat the market.

from: jonah on November 06, 2016, 09:49:19 AM

[TravelingPennies]

Quote

[TravelingPennies]

Two thoughts:

1) That logic just doesn't work across asset classes.  That may be a good conceptual question for other equity strategies, but not when you are looking at the returns of loans.
2) Investments are not always seeking the highest rate of return.  This may be the case for you, but my opinion is that it isn't a good idea to make this assumption for everyone.

[dmcnic]

from: Larry321 on November 07, 2016, 03:36:00 PM

[Edward Reid]

from: rawraw on November 05, 2016, 02:09:42 PM