I signed up for LC in June 2015 which I think was really not a great time to sign up. As you all know, LC had some serious issues with loan quality in 2015 and 2016. While LC initially presented my account as having a 10% return, what I actually experienced over the following two years was less than a 4% return. Mostly due to excessive charge-offs. For context I was mostly invested in C/D/E with a few F/G loans and a WAIR of around 18% or so.
Recently though I've seen my returns ticking up. My overall return has risen from a low of 4% to 5.5% and seems to be climbing. I'd guess if current trends continue it's going to get to 6.5% or so, maybe even 7%, which while not the 10% I originally expected, is also not the 4% I saw over the last couple of years.
On my side, two things have changed. I've become more conservative in my automated investing, investing only in B/C/D. I've also started making use of Folio, where I target seasoned loans that have a rising credit score and never late. My folio buying has a WAIR of 19% but my automated buying of new loans has a WAIR of 12%. Overall that's giving me a WAIR on newly invested loans of around 17% vs a historically higher WAIR in 2015/2016, so I've become slightly more conservative.
However, my gut says that my increased return is not because I've become slightly more conservative, or that I'm suddenly better at picking notes. My guess is that the underlying return on the platform has just generally improved by a couple of percentages and that rising tide is floating my boat.
I am curious to see what other's have experienced.
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