Friday, November 20, 2009

Completed my first investment using the Lending Match feature of Lending Club

Last week I finally finished up my first batch of investment loans using the Lending Match feature of Lending Club. Basically, the total process took two weeks. The bulk of the investments, all but one, settled within the first week and then I had to make two multi-day attempts to get a replacement for the one loan that did not settle. I did end up with a better loan than the original one that was part of the batch recommended by Lending Match, but it did take some manual effort on my part to "close the deal." Net-net, I am done and pleased with the result. I now have twice the investment portfolio I had a month ago. A total of 17 notes.

I'll give this latest batch of investment notes two months to see that everything is okay and payments are on time, and then I'll consider a next batch to double the size of my investment portfolio again, assuming that I have work income coming in at that time.

According to the Linding Club web site, my Net Annualized Return is sitting at 13.59%. Once the new batch of loans starts "producing", this should move up to about 14.5% or so, maybe even 15%.

Note: Lending Club also has an IRA arrangement. I haven't investigated it yet.

-- Jack Krupansky

Thursday, November 05, 2009

Great progress using Lending Match feature of Lending Club, but one bug

Just under a week ago I made my first attempt to use the Lending Match feature of Lending Club to invest in a whole batch of P2P investment loans all at once. It has worked out well, with just two related glitches. Out of nine loans, eight have already been "Issued", and only one failed to reach 100% funding in the two-week funding period. Not bad at all. I was actually worried that two or three of the loans might not get funded. So, that was the first, almost-expected "glitch". I classify it as a glitch because I have to now manually intervene to "set things right." Now, I need to select another loan to substitute for that rejection. Oops... here is the second glitch. Even though that rejected loan has already dropped off the Funding/Issued list, my funding amount has not yet been credited back to my account, so I can't reinvest it yet. To me, that is more of an outright bug rather than a simple "glitch." But, I am confident that either later today or tomorrow morning the money will be credited and I can select a replacement loan for investment.

My current Net Annualized Return is displayed as 13.44%, before the new loan batch. That puts me up at the 78% percentile. The new batch of loans may push me up to 82% or so. I think I want to be at around the 85% to 90% range, rather aggressive, but not way out there with the whacky 10% fringe nuts.

Based on my quick success, I am already looking at some other "extra" cash that is earning 0.00000001% interest in my Fidelity account and trying to decide whether to "save" it with and get 2.01% APY or "invest" it with Lending Club and get maybe 17%. Maybe I'll split it in half and do both.

Further down my list of things to do is to check out the FOLIOfn Note Trading Platform. I want to see which notes might be selling at a premium and maybe sell a few to lock in some bigger gains.

-- Jack Krupansky

Sunday, November 01, 2009

Trying out the Lending Match feature of Lending Club

My Lending Club investment loan account has been on auto-pilot for some time now. All has been well since I last blogged about it in early August. All of the loan payments have been on time. In fact, enough interest and principle repayment has come in that I now have enough from those two sources alone to make a new loan. I also finally have some new work income coming in again, so I am also adding new funding for another batch of loans, the same amount as my original funding. The difference is that this time I will try out the Lending Match feature which automatically selects and recommends a batch of loans given an investment amount and a target interest rate.

The feature gives you a slider bar which displays the interest rate. As you slide between lower and higher interest rates it also displays a pie chart with the percentage breakdown of each credit risk class. I was tempted to go for 18% or even 20%, but the resulting risk profile seemed too "risky" for me. I pulled back and finally settled on 15% as an optimal risk profile for me. My current annualized return is about 13.5% and loan rates have risen by 0.5% since I made my investment loans back in June, so 15% is only a modest increment above my current risk.

Lending Match selected my nine investment loans. I wasn't comfortable with two of the recommendations, so I deselected them, and Lending Match recommended replacements that I was comfortable with. I did this on Thursday. So far, two of the nine have reached full funding and are awaiting final review by Lending Club. A third is very close to full funding. Most of the rest are progressing with funding fine, with only two or three that may be questionable as to whether they will reach full funding before their two week funding period expires.

So far, I am extremely happy with the results I have gotten with Lending Club.

I will do a few more experiments in the next couple of months, and then consider a more serious investment as long as my work income holds up and I start accumulating a little cash to invest.

-- Jack Krupansky