Author Topic: Why not use an auto-invest service?  (Read 18046 times)

Zach

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Why not use an auto-invest service?
« on: August 21, 2013, 05:37:58 PM »
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?

thezinfan

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Re: Why not use an auto-invest service?
« Reply #1 on: August 21, 2013, 05:49:00 PM »
As I just posted in Bryce's thread, I haven't had much problem manually buying loans, so I haven't looked into the IR auto invest (I am an IR member though and use other features of the web site). I buy 100 dollar notes, so i don't need as many loans to get my money in. But i have over 100k so there's constantly paid-off/new payments coming in, so i re-invest a few times a week.

I have my filters set and i buy whatever matches my filter. I do a quick review in the cart since there still is no filter i know of native to LC.com that will check current debt vs requested loan amount.


SeanMcD

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Re: Why not use an auto-invest service?
« Reply #2 on: August 21, 2013, 05:54:47 PM »
I use IR's auto-invest, but I've still had trouble keeping up.  The last few days have seen very few successful purchases - lots of "Loan fully funded" emails. 

Zach

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Re: Why not use an auto-invest service?
« Reply #3 on: August 21, 2013, 06:02:53 PM »
I use IR's auto-invest, but I've still had trouble keeping up.  The last few days have seen very few successful purchases - lots of "Loan fully funded" emails.

I do get my fair share of those too, but overall, my available cash is always less than $200. What are some of your strategies?

My strategy is pretty simple:

1) IR01 score 400+, Low or Unknown IR04, and Word Loss-Rate of less than 6%.

SeanMcD

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Re: Why not use an auto-invest service?
« Reply #4 on: August 21, 2013, 07:11:41 PM »
Similar, but I don't have Unknown on auto-invest.  I still check those manually, since there's no information to indicate which attributes are out of the norm or how far they wander.

Fred

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Re: Why not use an auto-invest service?
« Reply #5 on: August 22, 2013, 01:13:19 AM »
I use IR's auto-invest, but I've still had trouble keeping up.  The last few days have seen very few successful purchases - lots of "Loan fully funded" emails.

Anyone here is using auto-invest in NickelSteamRoller (NSR) premium?  Is it also experiencing the same "Loan fully funded" phenomenon?

TonySaunders

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Re: Why not use an auto-invest service?
« Reply #6 on: August 22, 2013, 04:12:32 AM »
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?

I tried this service. It didn't succeed at getting the most desirable notes before they were gone. The problem is a condition of having to race for limited resources. No matter how fast everyone gets, some of them still lose.
« Last Edit: August 22, 2013, 04:15:17 AM by TonySaunders »

DanB

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Re: Why not use an auto-invest service?
« Reply #7 on: August 22, 2013, 07:19:03 AM »
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?

Yes, not using an automated system does sound rather ludicrous, doesn't it? But only if you believe that everyone is actually having "extreme difficulty". So I can answer your question this way.  This investor, who has been investing daily in p2p for almost 4 years now, owns thousands of notes & has had real returns of over 15% for the last 3 yrs...........doesn't use an automated solution because he finds it unnecessary since he is not currently, nor has he ever really experienced "extreme difficulty" in getting loans. Of course it's probable that this investor may not use terms like "extreme difficulty" as liberally as others may. Why is this investor seemingly less concerned? Because his focus is on the bottom line. Isn't that really what matters?

No one is going to argue that it's not harder than it was a few months ago & no one is going to argue that having a larger or even a much larger supply to choose from is not preferable to the situation today,..............but as some of us know, this is hardly the only thing that matters in generating satisfying return numbers. Even picking "good" notes isn't the only thing that matters............Besides, though many services (& people) claim they can identify the "best" notes, I remain unconvinced that most within that group really can...............but I digress.

So yes, I understand. Who doesn't want to copy someones best filter, their best strategies, get the best notes etc etc. My suggestion (which might get me excommunicated from here  :) ) for those who wish to have a bit less difficulty during this TEMPORARY imbalance.............is consider using this time to develop your own strategy, stop paying for picks, stop sharing your strategies, filters, & stop copying what others do, for they rarely know as much as they'd want you to believe they do. Feel free to ignore their "expert" advice. Feel free to ignore mine, in fact I'd prefer it that way, since I'm not getting paid for it here :)***
  But if you choose to do all this, you may find that you don't "have to" use an automated anything right now. And regardless of whether you do or not, I suspect that "extreme difficulty" won't be part of your current vocabulary, just as it isn't part of mine. 

***Just remember that last year when there was this big  deal over the note shortage at Prosper due to everyone copying the experts & piling into "repeat borrowers" because those were the "best notes" (sound familiar?) .............only a very few of us advised against jumping on that bandwagon & suggested that the returns would drop substantially, making the aggravation not worth the hassle.
« Last Edit: August 22, 2013, 07:22:08 AM by DanB »

rawraw

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Re: Why not use an auto-invest service?
« Reply #8 on: August 22, 2013, 07:28:25 AM »
I'm amazed that DanB is the voice of reason during this period of forum chatter, given he doesn't really bite his tongue ha ha 

But I have to agree with him -- although he probably benefits from a large amount of legacy notes.  DanB, what average interest rate are you getting upon reinvestment?

DanB

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Re: Why not use an auto-invest service?
« Reply #9 on: August 22, 2013, 08:15:52 AM »
I'm amazed that DanB is the voice of reason during this period of forum chatter, given he doesn't really bite his tongue ha ha 

But I have to agree with him -- although he probably benefits from a large amount of legacy notes.  DanB, what average interest rate are you getting upon reinvestment?

Around 15-16% while my average weighted return across all accounts averages out at 15.7%. I could be more precise, but I can't remember exactly when the drop in note availability started. Last month, right?  Actually I doubt the legacy notes, as you call it, are helping at all,.............. as the average rate on 2010 notes (for example) is actually substantially lower than my total weighted average & obviously lower than my average notes from 2011. ............& 2012 is higher than either of the 2. Unless you mean something else by "legacy".  And to anticipate your next point, the percentage of 60 month loans as a part of my portfolio hasn't risen lately, & remains as it has always, a very small percentage of my portfoilo.

p2p2p2p2p

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Re: Why not use an auto-invest service?
« Reply #10 on: August 22, 2013, 10:02:16 AM »
I refuse for securities sake to give my user name and password to an unknown individual who obviously has the technical capability to wipe out my account overnight through fictitious sales on Folio Fn and can probably withdraw most if not all of the money before he or she can be stopped. At that point my Lending Club Net Annualized return goes to a -100% instantly while Lending Clubs attorneys point to all 87 paragraphs in their operating agreements and terms of service that they are in no way responsible for my giving out my accounts access information to a "Stranger" I never met , over the internet. However if I am interested they represent a guy willing to sell me a bridge.
Besides I have a significant amount of money invested and as in all things in life, if the return is too good, it wont last. So I have stopped adding new money to my account and am attempting to keep the existing funds reinvested. Even LC Advisors is not accepting additional funds for at least another 3 months.
In the meantime there are now numerous opportunities available elsewhere as a result of rising rates. i.e. NY State tax exempts are now yielding over 5%. Its not 12% but it is tax free and I don't think NY State is defaulting soon

lender_john

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Re: Why not use an auto-invest service?
« Reply #11 on: August 22, 2013, 11:01:31 AM »
I know many members of the forum have had extreme difficulty in getting the loans/notes that you want. Throughout this whole constricted supply period, I've been able to aggressively get my capital to work using Interest Radar's auto-invest.

I'm curious to know why any investors who don't use an automated solution don't do so?

Because I design software for a living, I have a slight mistrust of anything automatic when it comes to finances.
That doesn't mean that I don't use browser plugins/scripts to help me reprice and such, but I can't imagine just letting my accounts sit on autopilot on someone else's software...

AnilG

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Re: Why not use an auto-invest service?
« Reply #12 on: August 22, 2013, 11:01:53 AM »
I'm amazed that DanB is the voice of reason during this period of forum chatter, given he doesn't really bite his tongue ha ha 

Agree. DanB and p2p2p2p2p summed up my reasons for not using auto-invest despite having access to API and capability. I never had any issues finding notes that I would want to invest in. I spend less than 5 minutes a week investing in new loans for two LC and one Prosper accounts and don't bother to look at loans specially at release time.

I seriously doubt anyone on this forum, including myself, can determine what a good loan is. Everyone is guessing and trusting someone else's opinion of good loans.
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Anil Gupta
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LendingClubStatistics

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Re: Why not use an auto-invest service?
« Reply #13 on: August 22, 2013, 11:31:57 AM »
I think one benefit of picking up the "popular" notes is at least they get funded relatively fast, but I guess that doesn't necessarily mean they get issued any faster.  For now, getting highly sought after notes could allow people to flip notes on Folio.  (Currently trying out this strategy) I'll hold off until LC has some sort of auto-invest.  I also don't have nearly enough balance in my account to justify it.  Being in IT, I also don't trust anyone direct access to a financial account. Scary  :o

Zach

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Re: Why not use an auto-invest service?
« Reply #14 on: August 22, 2013, 12:20:41 PM »
Thanks everyone for your input.

For those who are concerned about security, what's really the worst thing that could happen?

Someone schedules an ACH withdrawal out of your account? LC automatically sends an e-mail when a withdrawal request is received, and they can usually cancel these requests for about 1 day.

Someone tries to sell all of your notes on Folio? That may be more tricky to deal with (in terms of getting LC to cancel the sale), but lets be real here...your login credentials could be compromised at any time