All of my notes are always up for sale on the secondary and 2012 closed out somewhere between 15-16% (Good year!! I wish I could maintain this number forever which isn't likely) for me, I started investing late 2011. I use XIRR which includes my idle cash and downtime. Since I started listing all of my notes for sale my average age has dropped sharply and my return has increased by a couple points. I simply don't value age of notes when considering return rates unless the influx is all "new" money. It really depends on peoples strategy and what they are doing. If the strategy is buy and hold through maturity then age will have a dramatic affect on the return figures. The only problem with a churning strategy comes in the ability to find notes that meet the criteria to continue to purchase. As the selection of notes that meet my criteria slow down I increase the premium I charge on the secondary which slows down the turn rate of notes to match the ability to reuse the money on a new note, and as a second boon I make more when the notes do sell. So back to your point- I judge the persons content, ideas, and implementation as opposed to caring about the age of the notes in the portfolio which is not nearly as relevant as the time that the money has had time to work. The time that the money has been working for that overall return using a specific strategy is the question that should be focused on in my opinion...
I certainly agree with you Keltset that the longevity of investment strategy is a better indicator than pure "seasoned" return ideology.
Going back to the OP thoughts, like Anil mentioned, this forum will have a hard time replicating your "intended" market. Most of the investors here are very actively involved in developing their own investment criteria through research and analytical analysis. As such, your intended market would be those uninterested in doing such work. This, in my mind limits the first option you mentioned, because if I am going to pay $120 per year for loan picks, then you had better provide enough picks to support the size of account I desire. Example: New investor with 20k to invest. Within the first six months, will you be linking (realistically) 800+ different loan options (assuming they want to put $25 per note, and without counting the reinvestments from payments)?
Going to your second idea, essentially setting up a hedge fund (ignoring the obvious legal and reporting requirements for such an entity), you have to be able to successfully market some sort of a return, without getting yourself into a Madoff situation. I personally would be extremely skeptical of someone providing a guaranteed return with only a three year investment history. This certainly isn't a knock on your background, or expertise, just an observation, as I too have imagined created a similar vehicle for investment that would produce a fee for my "investment services".
- Any other ideas on how I can help people make better investment decisions?
And a final thought, although made very much tongue in cheek, would be to simply share this proprietary knowledge!
