Author Topic: Automated investing - Bluevestment vs LR vs .....  (Read 13133 times)

icanhasloanz

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #15 on: January 24, 2016, 07:03:58 PM »
Michael - How well is BV and Bluepicks working out for your IRA? I'm interested to know the number of loans it got in the past year and your ROI on them if you like to share.

michael49

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #16 on: February 09, 2016, 07:57:42 PM »
Michael - How well is BV and Bluepicks working out for your IRA? I'm interested to know the number of loans it got in the past year and your ROI on them if you like to share.

I just opened up the IRA account a month ago, so in terms of performance its too soon to tell.  What I'm most impressed with is how quickly the Bluepicks aggressive filter was able to purchase notes that met the criteria.  I invested $5500 and it was all "invested" within a week - of course there are still some notes that have yet to be issued.  Also, in case your interested - it purchased: 50% D, 30% E, 15% F and 5% G notes. 83% 60 month, 17% 36 month.  This is without the use of additional filters.

My non-IRA LC account is about a year old (and contains multiple portfolios with different filters - overall much less aggressive than the BP aggressive filter) is earning about 10% currently.


michael49

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UPDATE: Re: Automated investing - Bluevestment vs LR vs .....UPDATE
« Reply #17 on: December 11, 2016, 09:15:14 AM »
UPDATE:  Thought I would update this thread.

I started using Bluepicks aggressive filter about a year ago.....

My primary account account has used a variety of filters since its inception but has only invested with Bluepicks aggressive over the past year:

Your Notes purchased on the Lending Club platform
Adjusted Net Annualized Return:   7.67%
Weighted Average Interest Rate:   17.01%
Weighted Average Age of Portfolio:   13.0 mos
Number of Notes: 1,302



My IRA acct was started just about a year ago and Bluepicks is the only filter investment strategy that I've used.  The acct is about a year old:

Your Notes purchased on the Lending Club platform
Adjusted Net Annualized Return:   6.41%
Weighted Average Interest Rate:   19.75%
Weighted Average Age of Portfolio:   8.6 mos
Number of Notes:   305


As far as I know Bluepicks is not investing in the secondary market at all at this point.  I understand that LC has taken a hit over the past year but my returns have not been great with BP and I have been thinking of giving Lendingrobot a try.

For those using LR how has the experience been? Has the secondary market investing been beneficial ?
« Last Edit: December 11, 2016, 09:30:17 AM by michael49 »

SLCPaladin

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Re: UPDATE: Re: Automated investing - Bluevestment vs LR vs .....UPDATE
« Reply #18 on: December 11, 2016, 09:57:29 PM »
Quote
As far as I know Bluepicks is not investing in the secondary market at all at this point.  I understand that LC has taken a hit over the past year but my returns have not been great with BP and I have been thinking of giving Lendingrobot a try.

For those using LR how has the experience been? Has the secondary market investing been beneficial ?

I don't use Bluepicks or Lending Robot, so I can't really opine there. But it seems to me that which "picker" service one selects is probably of secondary importance with regards to recent returns. The bigger issue impacting returns is when (i.e., vintage) the investments were made since there has been a notable deterioration of quality and higher delinquencies, especially in the higher risk segments in the past year or so. I don't think picking services would have sheltered one too much from those broad deterioration trends, and so I don't expect that the grass is any greener over at Lending Robot. I could be proven wrong though.

michael49

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Re: UPDATE: Re: Automated investing - Bluevestment vs LR vs .....UPDATE
« Reply #19 on: December 12, 2016, 08:15:58 PM »
Quote
As far as I know Bluepicks is not investing in the secondary market at all at this point.  I understand that LC has taken a hit over the past year but my returns have not been great with BP and I have been thinking of giving Lendingrobot a try.

For those using LR how has the experience been? Has the secondary market investing been beneficial ?

I don't use Bluepicks or Lending Robot, so I can't really opine there. But it seems to me that which "picker" service one selects is probably of secondary importance with regards to recent returns. The bigger issue impacting returns is when (i.e., vintage) the investments were made since there has been a notable deterioration of quality and higher delinquencies, especially in the higher risk segments in the past year or so. I don't think picking services would have sheltered one too much from those broad deterioration trends, and so I don't expect that the grass is any greener over at Lending Robot. I could be proven wrong though.

I suspect you are right, however LR would allow for automated investment in the secondary market (Folio) which as yet I have not experimented with.  Bluevestment has been planning on adding this option, but as far as I can tell it is not available yet.
« Last Edit: December 12, 2016, 08:17:34 PM by michael49 »

BruiserB

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Automated investing - Bluevestment vs LR vs .....
« Reply #20 on: December 13, 2016, 12:03:54 PM »
I had a rule that bought only the highest "Expected Returns" from Lending Robot for a long time. Unfortunately this is one of my lower performing portfolios (<4%).  I am now using NSR's Aggressive management on my IRA and it is doing well (currently 10.4%)....but the notes there are newer so just may not yet be hitting their default peak. I had also started using Bluevestment's more conservative BluePicks Moderate for my taxable account and they are doing OK as well (7.9%) but again the note are newer there too).  I went more conservative on my taxable account hoping to have fewer capital losses going forward. But now I've stopped reinvesting totally in my taxable account for a while.

I really like the LR guys and their overall website and research and blog posts, etc., but I have to say I've been disappointed in the performance of notes that were supposed to have high expected returns. 

I haven't used any folio trading options on my accounts. It's not clear to me how LR charges you if they later sell a note they bought for you...do you still pay the charge until the note would have been paid off?  I'm also definitely concerned about the tax reporting implications of folio trading in a taxable account (keeping track of adjusted basis on individual notes, etc).  If I ever do enable folio, it would be in my IRA.


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« Last Edit: December 13, 2016, 12:06:43 PM by BruiserB »

dbailey75

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #21 on: December 13, 2016, 12:31:12 PM »
I started using Blue vestment's picks in Feb 2016,  using both the moderate and aggressive filters with my own filters added to each one,  so far I've accumulated 201 loans, I have 2 IG which should go current, but I have 2 that are 31-120 late which were issued in March and April, these will be going in to default next year no doubt.  So that would be 1% default to date.

Still too soon to comment on their performance,  but would be happy to provide an update in a couple months.

I did try LR for a very short time, and plan to try it again, but there must have been a user error on my end, I was using the default filter, can't recall the name, but it appeared to not include G notes, well, I picked up one G note, wasn't happy about it, so I turned it off until I could find time to figure it all out.  On a side note, LR also picked up a number of E's as well. Of the 17 notes, I have 1 B, 3 D, 12 E, and 1 G. 


jz451

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #22 on: December 13, 2016, 03:51:45 PM »
If you ever start buying notes automatically again I'de recommend creating filters for each loan grade to improve quality instead of lumping everything into a one or two filters. If you go that route as I've realized even though I don't use auto buying is that unless there is a feature to select the percent for each grade you want is to manually shut off the filters for a given grade once your desired threshold has been met.

I started using Blue vestment's picks in Feb 2016,  using both the moderate and aggressive filters with my own filters added to each one,  so far I've accumulated 201 loans, I have 2 IG which should go current, but I have 2 that are 31-120 late which were issued in March and April, these will be going in to default next year no doubt.  So that would be 1% default to date.

Still too soon to comment on their performance,  but would be happy to provide an update in a couple months.

I did try LR for a very short time, and plan to try it again, but there must have been a user error on my end, I was using the default filter, can't recall the name, but it appeared to not include G notes, well, I picked up one G note, wasn't happy about it, so I turned it off until I could find time to figure it all out.  On a side note, LR also picked up a number of E's as well. Of the 17 notes, I have 1 B, 3 D, 12 E, and 1 G.

BruiserB

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #23 on: December 14, 2016, 09:56:53 AM »
If you ever start buying notes automatically again I'de recommend creating filters for each loan grade to improve quality instead of lumping everything into a one or two filters. If you go that route as I've realized even though I don't use auto buying is that unless there is a feature to select the percent for each grade you want is to manually shut off the filters for a given grade once your desired threshold has been met.

I started using Blue vestment's picks in Feb 2016,  using both the moderate and aggressive filters with my own filters added to each one,  so far I've accumulated 201 loans, I have 2 IG which should go current, but I have 2 that are 31-120 late which were issued in March and April, these will be going in to default next year no doubt.  So that would be 1% default to date.

Still too soon to comment on their performance,  but would be happy to provide an update in a couple months.

I did try LR for a very short time, and plan to try it again, but there must have been a user error on my end, I was using the default filter, can't recall the name, but it appeared to not include G notes, well, I picked up one G note, wasn't happy about it, so I turned it off until I could find time to figure it all out.  On a side note, LR also picked up a number of E's as well. Of the 17 notes, I have 1 B, 3 D, 12 E, and 1 G.

I do create a portfolio for each strategy/rule/service I use. That's exactly how I know how well each has performed for me.


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SLCPaladin

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #24 on: December 14, 2016, 08:38:24 PM »
Quote
I'm also definitely concerned about the tax reporting implications of folio trading in a taxable account (keeping track of adjusted basis on individual notes, etc).  If I ever do enable folio, it would be in my IRA.

That is one of the biggest reasons I don't use Folio right now in my taxable account. The thought of untangling all the buys, sells, cost basis, and related implications come tax time seems nauseating. There are so many other things I'd rather invest my time in than that.

rubicon

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #25 on: December 14, 2016, 09:06:41 PM »
Quote
I'm also definitely concerned about the tax reporting implications of folio trading in a taxable account (keeping track of adjusted basis on individual notes, etc).  If I ever do enable folio, it would be in my IRA.

That is one of the biggest reasons I don't use Folio right now in my taxable account. The thought of untangling all the buys, sells, cost basis, and related implications come tax time seems nauseating. There are so many other things I'd rather invest my time in than that.

Folio has a 1099-B for you. You can just use the summary sheet.



BruiserB

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Automated investing - Bluevestment vs LR vs .....
« Reply #26 on: December 15, 2016, 07:07:50 PM »
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I'm also definitely concerned about the tax reporting implications of folio trading in a taxable account (keeping track of adjusted basis on individual notes, etc).  If I ever do enable folio, it would be in my IRA.

That is one of the biggest reasons I don't use Folio right now in my taxable account. The thought of untangling all the buys, sells, cost basis, and related implications come tax time seems nauseating. There are so many other things I'd rather invest my time in than that.

Folio has a 1099-B for you. You can just use the summary sheet.

I'd be willing to bet that the 1099s from LC/Folio don't fully reflect reality.  They may get cost and sale price right, but I bet they don't adequately reflect the manual adjustments that have to be made to interest earned if you buy above/below par value.  If you read the IRS rules on how to do this for a bond and then suddenly realize you need to keep track and make these manual adjustments for each $25 note, it just won't be worth the trouble.

I'm sure most people simply report the numbers that are shown on the 1099, and probably the IRS will never notice/check.  But after reading the rules, I know it's not correct and just decided to avoid the issues.

I don't think it would be a problem to simply sell notes on folio. You then just have a gain or loss between what you sell the note for and its par value.

The trouble comes when you buy a note for more or less than par value.  The interest reported to the IRS is the interest that would have been earned had you bought it at par value.  But if you bought it for less then you actually earned more on the note and you need to manually adjust it. If you bought it for over par value then you actually earned less and you need to make a similar adjustment or you will overpay taxes.


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rubicon

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« Last Edit: December 15, 2016, 07:54:44 PM by rubicon »

BruiserB

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Automated investing - Bluevestment vs LR vs .....
« Reply #28 on: December 16, 2016, 05:18:03 AM »
here are the details: https://resources.lendingclub.com/Tax-Guide-for-Retail-Investors-2015.pdf

And the key is the last page describing folio transactions:

5. Note on Tax Cost BasisPlease keep in mind that Notes purchased on the Folio Investing* Note Trading Platform may have been purchased at a discount or premium relative to outstanding principal plus accrued interest at the time of purchase, and additional information is provided in order to help you determine the cost basis for transactions involving these Notes. However, investors are ultimately responsible for tracking their tax cost basis. The basis reported on Form 1099 may differ materially from an investor’s tax cost basis, depending on the investor’s personal tax situation. For more information, please consult your financial or tax advisor.


It says what is reported on form 1099 may not be your actual cost basis and that you are responsible for tracking and reporting the correct info.  Good luck doing that for each note you trade on Folio. And it's more involved than just keeping track of your actual purchase price...you then need to adjust your interest earned on the note to reflect purchasing the note at other than par value and amortize it over the remaining life of the loan.  Then you need to manually adjust the numbers you imported off your 1099 and be prepared to explain to the IRS why you (correctly) did so.

Or you can ignore doing so and just report what shows on the 1099s and be prepared to explain to the IRS why you (incorrectly) did so.

Here's the IRS publication that tells you how to adjust your OID (interest) for Contingent Payment Debt Instruments (LendingClub notes) when you buy them at other than par value:

https://www.irs.gov/pub/irs-pdf/p1212.pdf

To me it's not worth the hassle to trade Folio in a taxable account.  You don't have to report any of this in an IRA, so it makes a lot more sense there.


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« Last Edit: December 16, 2016, 05:30:09 AM by BruiserB »

michael49

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Re: Automated investing - Bluevestment vs LR vs .....
« Reply #29 on: December 17, 2016, 08:04:20 AM »
..... I had also started using Bluevestment's more conservative BluePicks Moderate for my taxable account and they are doing OK as well (7.9%) but again the note are newer there too).  I went more conservative on my taxable account hoping to have fewer capital losses going forward. But now I've stopped reinvesting totally in my taxable account for a while.
....
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Thanks for the input. That's better than my BP Aggressive is doing in my non-taxable account at the moment. :(