Friday, April 09, 2010

Finished investing my new Lending Club money in more investment loans

This morning and this afternoon I invested in the last two investment loans (notes) to complete the investment of my latest infusion of money into my Lending Club account. One was at 18.30% and the other at 17.56%, so I think my average for the new batch should be roughly at 15%, give or take. I had hoped to be up at 15.5% or even 16%, but 15% is fine.

Two of the batch of 20 loans have already been fully funded and issued. Three more have reached full funding and should be issued on Monday. The rest are all "Approved" but in various stages of funding. A couple of them might not reach full funding by the two-week deadline, but overall they are in great shape to get issued within the next week to ten days. My work is done (unless some of them fail to get fully funded). I'll check up on their funding status every couple of days (just for fun, actually), but otherwise my account is on auto-pilot.

It was only Monday that I initiated the transfer from my bank account in Lending Club. I didn't even expect to be starting the loan selection process until Monday. being ahead of the game is quite satisfying.

The only other comment I would make is that I would have been done yesterday if I had doubled or somewhat increased my loan slice size to minimize the number of loans I needed to select. Twenty is a lot to do all at one. Sure, the Lending Match feature can be used to do a batch of automatically selected notes all at once, but I prefer to carefully vet each note and to select only those that are already "Approved."

Meanwhile, my Net Annualized Return has moved back up to 15.07%. I have a total of 52 notes (assuming the latest batch all get funded.)

Even with this doubling of my total porfolio size, my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky

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