[howler99]

Like most LC investors I've had a tough time the last couple of years. However, June was a "monster" month, and I netted nearly .6% across all my LC accounts. This was by far by best month in long over a year, and my crudely calculated annual investment return is 3.4%, so I don't anticipate this going forward.

My question is what's working for people these days? I'm not asking for your finely tuned credit filters...but just some insights on how the different note grades, etc.  are doing over the last 6-12 mos.

I come from "old school" LC of investing in the highest note grades filtering on a few of the more profitable criteria, but obviously that strategy crashed and burned a while back. I haven't kept up with recent returns, but for the last year I've just been investing A, B, C, with maybe only 20% in A...and filtering on a few things, inquiries etc..

In the old days I knew where to look for this analysis, but I've lost track as my returns have disappointed.. Even some pointers/links on how to do this analysis would be appreciated.

Thanks.

[.Ryan.]

I'm not sure what, if anything, is working any longer.

I've started the process of liquidating my personal investment accounts over a year ago. This process in itself has proven to me that any investment of significant size in LC or P is HORRIBLE idea. The liquidity on these are horrendous, and watching your RoR vaporize while running off your accounts is PAINFUL.

That being said, I kept my small LC IRA open for fun. I had solid secondary market filters that were creating high single digit returns fairly consistently. Now those filters don't match against nearly as many loans (I often end up with small cash piles), and the short term returns are wavering around 4.5%

An investment returning 5-6% usually has my interest. But keep in mind that nothing out signals that this return from LC/P will ever rise from that. The economy & job market are doing fantastic, and default rates are low(er). This should be the golden age for P2P investing, and the reality is that returns only have a path to get worse. MUCH WORSE in my opinion with a bad economy & job market.

I just don't feel like the risk of holding an investment with mediocre returns when times are great is worth it. Especially when it is so difficult and tedious to liquidate (and accelerating liquidation by using the secondary market is a total PITA!) when you do want to exit. FDIC insured 5 YR. CD rates are nearing 3.5%, which leaves you 0 default risk - At this point the choice is clear for me.

Already leaving LC/P has given me back 20+ hours a week I was spending on trying to learn/understand/monitor/beat the system. That time back with my family is priceless! 

[SLCPaladin]

Ryan, you've articulated much of my own sentiments. I never invested in the secondary market because I always dreaded what the tax implications was since my own personal tax situation has been relatively simple and I didn't want to add complexity with having to account for cost basis on hundreds of notes. At one point my investment in LC was over 100k and I'm now down to about $30k including all accounts. My main gripe has been that the interest rates are not high enough to offset the tax implications and the increased default risk that we've seen over the past few years. As I've drawn down my account, almost all of my funds have been going to 3.3% FDIC insured CDs.

[dr.everett]

from: SLCPaladin on July 21, 2018, 12:14:10 PM

[lascott]

from: SLCPaladin on July 21, 2018, 12:14:10 PM

[BruiserB]

I'm continuing to reinvest in my IRA account, however I didn't transfer this year's IRA deposit into LC.  I'm using NSR's Fully Managed Aggressive tool in my IRA.  This year my IRA is yielding 7.91% YTD which is up from last year...my history is below. 

Overall Yield   7.36%
2013 Yield   13.10%
2014 Yield   12.86%
2015 Yield   11.11%
2016 Yield   3.69%
2017 Yield   5.87%
2018 YTD   7.91%

I've been letting my taxable account run down, withdrawing cash each Friday morning and putting it into a balanced portfolio of ETFs I've been investing in for the last couple of years.  My return is better this year (I suppose a lot of the defaults have already happened).   I'm contemplating turning reinvestment back on at some point, but still want to get the overall value lower as I've run into the same writeoff limits as lascott.  My taxable account performance is:

Overall Yield   7.48%
2011 Yield   10.35%
2012 Yield   10.76%
2013 Yield   12.17%
2014 Yield   11.20%
2015 Yield   9.75%
2016 Yield   4.12%
2017 Yield   1.12%
2018 YTD Yield   4.57%

[rawraw]

Interestingly, my stress test for my LC account was pretty accurate. I broke even when stuff went bad.  I had to reduce my portfolio because of the tax quirks (I don't use tax advantaged accounts in LC).  And the portfolio I manage for others (mostly As and Bs) has continued to do just fine.

[TravelingPennies]

Also, the benefit of buying all those notes for sale at ridiculous discounts when the CEO got fired has really helped my returns.  I think my regular NAR is like 4% and my traded NAR is like 14%. 

[TravelingPennies]

Most of my cash run-off is going to United States Senate Federal Credit Union. They have a 5-year share certificate (CD) yielding 3.53%. Risk free at that rate seems good as a lot of other assets seem overvalued right now to me.

[Rob L]

from: rawraw on August 06, 2018, 05:38:35 PM

[MoMoney]

from: Rob L on August 08, 2018, 06:38:41 PM

[TravelingPennies]

As Clint Eastwood famously said (Unforgiven); "I was lucky in the order, but I've always been lucky when it comes to killin' folks."
With some modesty I will say I've done alright with my varied investments over a very long period of time. Traded just about everything but pork bellys.
Most would probably consider my lifetime LC overall returns as good. I certainly do, but that party has ended (IMO forever).
I'm an engineer and understand the math. I will never know if I've been good or just plain lucky.
If anyone can answer that question they're smarter than me (or just fooling themselves). Don't know how anyone can know.
I've always had a big problem with that question; but as Clint said, I've been lucky (or maybe good; I dunno and never will).
Guess it could have gone either way.

[TravelingPennies]

from: MoMoney on August 10, 2018, 04:50:31 PM

[Peter]

from: Rob L on August 10, 2018, 06:56:22 PM

[TravelingPennies]

from: nonattender on August 11, 2018, 06:01:11 PM