Author Topic: How much of your portfolio goes to P2P lending?  (Read 22179 times)

Fred

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Re: How much of your portfolio goes to P2P lending?
« Reply #15 on: March 30, 2013, 10:21:12 AM »
I'm 24 years old and piling on the risk while I can. My entire investment allocation is as follows:

2% ETFs
4% Lending Club Notes
7% Cash
18% Individual Equities
34% Equity Options
35% Prosper Notes

35% Prosper and 4% LC?

I was 100% Prosper 0% LC, but now 30% Prosper 70% LC.

I find LC a much better platform risk-reward wise.

Fred

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Re: How much of your portfolio goes to P2P lending?
« Reply #16 on: March 30, 2013, 10:30:18 AM »
I'm 24 years old and piling on the risk while I can. My entire investment allocation is as follows:

2% ETFs
4% Lending Club Notes
7% Cash
18% Individual Equities
34% Equity Options
35% Prosper Notes

35% Prosper and 4% LC?

I was 100% Prosper 0% LC, but now 30% Prosper 70% LC.

I find LC a much better platform risk-reward wise.

Clarification: the 30-70 was the allocation only on my P2P investment.

The P2P investment itself is about 10% of my non-property; planning to double that to 20% in a year.

I am 43 y.o.  8)

rawraw

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Re: How much of your portfolio goes to P2P lending?
« Reply #17 on: March 30, 2013, 12:36:13 PM »
I'm 24. It's roughly 25 percent of my non real estate investment holdings

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Zach

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Re: How much of your portfolio goes to P2P lending?
« Reply #18 on: March 31, 2013, 12:06:03 AM »
It surprises me how conservative many investors are on this forum (with regard to your p2p investments). I feel like I'm definitely in the minority that have greater than 10% with p2p lending.

What's the reason that most (who have only a couple percentage points with p2p) chose to limit your overall portfolio percentage so much? Better returns elsewhere, too much risk, not a proven investment yet, not liquid enough, all investments with one holdings company, etc.?

I'm just curious what everyone's thoughts are here.

SarahV

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Re: How much of your portfolio goes to P2P lending?
« Reply #19 on: March 31, 2013, 12:40:31 AM »
For me the main reason is that I'm not allowed to have an IRA with Lending Club (for reasons still unexplained) and I'm not willing to tie up a lot of non-retirement money in a non-liquid investment. My non-retirement savings are mostly for shorter-term goals and I don't want it tied up for years at a time.

Fred

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Re: How much of your portfolio goes to P2P lending?
« Reply #20 on: March 31, 2013, 12:57:48 AM »
It surprises me how conservative many investors are on this forum (with regard to your p2p investments).

For me, this means the investors are not necessarily conservative but "balanced".  We understand the potential rewards; but are proceeding cautiously due to many reasons, including those you mentioned above.




DanB

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Re: How much of your portfolio goes to P2P lending?
« Reply #21 on: March 31, 2013, 01:18:41 AM »
It surprises me how conservative many investors are on this forum (with regard to your p2p investments). I feel like I'm definitely in the minority that have greater than 10% with p2p lending.

What's the reason that most (who have only a couple percentage points with p2p) chose to limit your overall portfolio percentage so much? Better returns elsewhere, too much risk, not a proven investment yet, not liquid enough, all investments with one holdings company, etc.?

I'm just curious what everyone's thoughts are here.

Well there are so many other things to consider. For instance, a lot of investors keep very very little in cash nowadays, since it pays no real interest. So increasing p2p allocation isn't just a matter of wanting to do so. I suspect that a lot of people who have other investments can't just do it short term.

AnilG

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Re: How much of your portfolio goes to P2P lending?
« Reply #22 on: March 31, 2013, 03:46:27 AM »
Reasons for our P2P portfolio being less than 0.5% of our total portfolio:

1. We are very disciplined investor. We rather stay in cash than make an investment that doesn't meet our criteria. Same mindset has transferred to P2P lending. We only invest in loans that meet our quantitative and qualitative criteria. Not many loans meet our criteria for us to deploy even the cash we already transfer to Lending Club and Prosper on recurring basis. I believe almost 20% of our P2P portfolio is still in cash despite doubling amount in each note.

2. We haven't converted/transferred our other existing investments to P2P. As a long term investor, we don't mess with our existing investments. Only a portion of new savings are going to P2P so the P2P portion is building up slowly.

3. We consider P2P investments to be part of our fixed-income asset allocation. We still haven't figured out where P2P investment are positioned on the fixed income risk-return scale (treasury bonds to Junk bonds) so we are considering P2P as part of our junk bond allocation so P2P gets only one-third of new savings allocated to junk bond.

4. P2P lending is still in its infancy and largely unproven.

It surprises me how conservative many investors are on this forum (with regard to your p2p investments). I feel like I'm definitely in the minority that have greater than 10% with p2p lending.

What's the reason that most (who have only a couple percentage points with p2p) chose to limit your overall portfolio percentage so much? Better returns elsewhere, too much risk, not a proven investment yet, not liquid enough, all investments with one holdings company, etc.?

I'm just curious what everyone's thoughts are here.
---
Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com

Show Me The $

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Re: How much of your portfolio goes to P2P lending?
« Reply #23 on: March 31, 2013, 04:24:28 AM »
I am new (Jan '13) to P2P and so, I am putting money to work in P2P slowly. I am now exclusively at LC and did not like or enjoy Prosper personally. I have less than 1% in P2P as of now, and every month I am building that up. I have a sizeable cash position which makes me nauseous but I am irrational investor who has lost a lot of money and so cash makes me feel good, even though I am literally losing money every month to inflation. Like I said... irrational :) I am trying to build my comfort level with P2P but its a slow process. I also invest $25-50 per loan, and so putting  a lot of money to work has been a challenge for me hand picking. I am tyring to find different models or means of picking, and trying p2pclicks as well. I am annualized at just under 14% as of now but its WAY too early to judge my portfolio 3 months in.

rawraw

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Re: How much of your portfolio goes to P2P lending?
« Reply #24 on: March 31, 2013, 08:40:22 AM »
I am new (Jan '13) to P2P and so, I am putting money to work in P2P slowly. I am now exclusively at LC and did not like or enjoy Prosper personally. I have less than 1% in P2P as of now, and every month I am building that up. I have a sizeable cash position which makes me nauseous but I am irrational investor who has lost a lot of money and so cash makes me feel good, even though I am literally losing money every month to inflation. Like I said... irrational :) I am trying to build my comfort level with P2P but its a slow process. I also invest $25-50 per loan, and so putting  a lot of money to work has been a challenge for me hand picking. I am tyring to find different models or means of picking, and trying p2pclicks as well. I am annualized at just under 14% as of now but its WAY too early to judge my portfolio 3 months in.
Have you looked into TIPS?  May be something you are interested in, if you indeed are holding lots of cash.

Fred

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Re: How much of your portfolio goes to P2P lending?
« Reply #25 on: March 31, 2013, 09:48:31 AM »


3. We consider P2P investments to be part of our fixed-income asset allocation. We still haven't figured out where P2P investment are positioned on the fixed income risk-return scale (treasury bonds to Junk bonds) so we are considering P2P as part of our junk bond allocation so P2P gets only one-third of new savings allocated to junk bond.


AnilG,

You might be interested in this article, which shows the 5-yr lookback of S&P500 vs. High-Yield Bond vs. LC Notes:
http://blog.lendingclub.com/2012/11/07/five-year-review-lending-club-notes-outpace-stocks-and-bonds/

LC Notes beat  S&P500 & High-Yield Bond in the following 3 criteria:

1. Total Return
2. Average Annual Total Return
3. Range of Annual Total Return

If we assume the high & low numbers on the "Range of Annual Total Return" as the 2-sigma numbers, we can infer the Sharpe's ratios of the 3 asset classes for the period.

mitgib

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Re: How much of your portfolio goes to P2P lending?
« Reply #26 on: March 31, 2013, 10:07:49 AM »
I've very different than the norm probably and have a large portion of my investable assets in p2p, at 40% currently. I own a small business that I feel gives me the best ROI, but after 7 years of sinking profits back into my company, I am no longer able to put all that cash back to work, so this year I have returned to more traditional investments but feel stocks are at such a high level it is not the safest place right now.  I am still putting 1/3 of new cash to work in what I feel are under valued stocks, but easing in so slowly p2p made sense to me as a way to park cash for 3 years.  If there is a large correction in the markets, I can always divert p2p payments back to the markets, and my goal of 8% after possible defaults in p2p is certainly not a wasted opportunity to me.  I don't expect 15% that LC projects after defaults, but following what has historically been stated in my reading, I don't feel my goal will be too difficult either.

Zach

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Re: How much of your portfolio goes to P2P lending?
« Reply #27 on: March 31, 2013, 10:27:07 AM »
Thanks everyone for your input!

Show Me The $

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Re: How much of your portfolio goes to P2P lending?
« Reply #28 on: March 31, 2013, 10:30:56 AM »
I am new (Jan '13) to P2P and so, I am putting money to work in P2P slowly. I am now exclusively at LC and did not like or enjoy Prosper personally. I have less than 1% in P2P as of now, and every month I am building that up. I have a sizeable cash position which makes me nauseous but I am irrational investor who has lost a lot of money and so cash makes me feel good, even though I am literally losing money every month to inflation. Like I said... irrational :) I am trying to build my comfort level with P2P but its a slow process. I also invest $25-50 per loan, and so putting  a lot of money to work has been a challenge for me hand picking. I am tyring to find different models or means of picking, and trying p2pclicks as well. I am annualized at just under 14% as of now but its WAY too early to judge my portfolio 3 months in.
Have you looked into TIPS?  May be something you are interested in, if you indeed are holding lots of cash.

Yes, I am familiar with TIPS, but I am not of retired age (who TIPS are best for) I am 36 but want the liquidity of something else with higher returns. TIPS are a complicated product, and I don't much trust the issuing entity ie the US Government :)

rawraw

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Re: Re: How much of your portfolio goes to P2P lending?
« Reply #29 on: March 31, 2013, 03:23:09 PM »
I am new (Jan '13) to P2P and so, I am putting money to work in P2P slowly. I am now exclusively at LC and did not like or enjoy Prosper personally. I have less than 1% in P2P as of now, and every month I am building that up. I have a sizeable cash position which makes me nauseous but I am irrational investor who has lost a lot of money and so cash makes me feel good, even though I am literally losing money every month to inflation. Like I said... irrational :) I am trying to build my comfort level with P2P but its a slow process. I also invest $25-50 per loan, and so putting  a lot of money to work has been a challenge for me hand picking. I am tyring to find different models or means of picking, and trying p2pclicks as well. I am annualized at just under 14% as of now but its WAY too early to judge my portfolio 3 months in.
Have you looked into TIPS?  May be something you are interested in, if you indeed are holding lots of cash.

Yes, I am familiar with TIPS, but I am not of retired age (who TIPS are best for) I am 36 but want the liquidity of something else with higher returns. TIPS are a complicated product, and I don't much trust the issuing entity ie the US Government :)
If you don't trust US debt, then I'm not sure if there is any investment which will suit your risk comfort level.