Author Topic: How much of your portfolio goes to P2P lending?  (Read 22183 times)

AnilG

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Re: How much of your portfolio goes to P2P lending?
« Reply #30 on: March 31, 2013, 04:20:24 PM »
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 :)

I agree with rawraw. US treasuries securities are the closest you can get to risk-free return.

I also don't like TIPS but for different reasons. TIPS generate phantom income because of adjustment to principal invested and having to pay tax every year on interest earned. If your investment horizon for cash is more than a year, consider putting cash in US Treasuries I-series Bond specially if cash is in a taxable account. The interest earned on I-series bond is tax deferred until bonds are cashed. Only restrictions are that you can only buy I-series bonds up to $10,000 per SSN per year, can't cash within a year of purchase and lose 3 months of interest if cashed within 5 years.
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mo

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Re: How much of your portfolio goes to P2P lending?
« Reply #31 on: March 31, 2013, 04:43:01 PM »
7% I'll probably do more eventually but I've only been able to get about 3k a month invested with the filters I've been using so far.

Grant

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Re: How much of your portfolio goes to P2P lending?
« Reply #32 on: March 31, 2013, 04:57:19 PM »
I'm at 1% of my net worth, 3% of my non-real estate holdings.  Why not more?
  • Short history of P2P makes me concerned there are unknown (to me) risks
  • Illiquidity
  • I don't want to have any more retirement accounts spread across financial institutions
  • I have other long term investments and don't want to close them out for P2P
  • At the moment, P2P is a "hobby"

veggivet

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Re: How much of your portfolio goes to P2P lending?
« Reply #33 on: April 01, 2013, 08:08:30 PM »
About 1% of my portfolio, not including real estate, and the vast majority of that is in a LC SIMPLE IRA. I am in my early 50's, and starting to downshift into retirement mode.

jpildis

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Re: How much of your portfolio goes to P2P lending?
« Reply #34 on: April 02, 2013, 09:42:00 AM »
20% of my non-RE net worth.  I'm 43 and have 'been around the block' with investing.  I invested in the early days of Prosper (2006-2007) and I've seen how bad it can get.  I didn't have any analytic resources and I simply chased return.  When it was all over, I lost a whopping 1% of my investment... much better than all of the 'safe' blue-chip financials I owned in 2007.

For me, the real risk is the company risk and the unknown result of a Prosper of LC bankruptcy.  Now that LC is thriving, I'm focused on their platform going forward.  Prosper, in my opinion, is a slowly sinking ship.  Best case, they get bought by Prosper... worst case, we get to experience was a bankruptcy remote vehicle really is.

ee1x

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Re: How much of your portfolio goes to P2P lending?
« Reply #35 on: April 02, 2013, 11:30:06 AM »
20% of my non-RE net worth.  I'm 43 and have 'been around the block' with investing.  I invested in the early days of Prosper (2006-2007) and I've seen how bad it can get.  I didn't have any analytic resources and I simply chased return.  When it was all over, I lost a whopping 1% of my investment... much better than all of the 'safe' blue-chip financials I owned in 2007.

For me, the real risk is the company risk and the unknown result of a Prosper of LC bankruptcy.  Now that LC is thriving, I'm focused on their platform going forward.  Prosper, in my opinion, is a slowly sinking ship.  Best case, they get bought by Prosper... worst case, we get to experience was a bankruptcy remote vehicle really is.

Do you still believe Prosper is sinking despite the drastic increase in volume during March?
Investing since March 2012

Fred

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Re: How much of your portfolio goes to P2P lending?
« Reply #36 on: April 02, 2013, 01:12:49 PM »
I invested in the early days of Prosper (2006-2007) and I've seen how bad it can get.  I didn't have any analytic resources and I simply chased return.  When it was all over, I lost a whopping 1% of my investment... much better than all of the 'safe' blue-chip financials I owned in 2007.

On paper, I too lost about 6% on my early Prosper investment.  However, I stuck it out and kept investing the repayments.  Now, I have a net gain of 2%.

However, since IMHO LC has a better risk-reward profile,  starting this year I am withdrawing money from Prosper and put it in LC.

berniemadeoff

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Re: How much of your portfolio goes to P2P lending?
« Reply #37 on: April 02, 2013, 02:52:24 PM »
If Prosper continues to give priority to institutional investors, I think returns for retail investors will slowly erode.  The institutional investors are not stupid, and I'm sure they have good mousetraps to select loans. If they are allowed to buy whole loans, I think this means we get left with the sloppy seconds.   :-*

OrthoInvest

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Re: How much of your portfolio goes to P2P lending?
« Reply #38 on: April 03, 2013, 05:31:15 PM »
High risk tolerance as I should be able to recover if shiz hits the fan.

10% of net worth allocation. I'd go higher, but I'm going to put more illiquid $ into RE investments. Especially concerning will be how the taxes on the notes will play out. If we earn a 10% return, what does that really become after taxes? Are we looking at something no better than 5%? If so, then I'm content with this being my max amount.


Booleans

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Re: How much of your portfolio goes to P2P lending?
« Reply #39 on: April 06, 2013, 09:27:51 AM »
Lending Club makes up 20% of my total investment portfolio, which also includes my IRA and 401k (I don't count my house).

dagilbe

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Re: How much of your portfolio goes to P2P lending?
« Reply #40 on: April 06, 2013, 09:40:11 AM »
I have the following investments:

Prosper                 12%
Prosper Roth IRA     6%
LC                            .5%
Brokerage Accts      50%
Roth IRA                  26%
Cash/Other             5.5%

The run up in the stock market has been good to me.  Like others have stated, I feel more comfortable in investing in P2P lending right now rather than throwing money in the stock market that is now at a record high.  I do not have a single late note at LC (I only have 10 notes at LC).  Maybe I will invest more at LC in the future?   For whatever reason, I much prefer Prosper's platform over LC's and my returns at Prosper have been stellar. 

As far as yield, I really like PFF because of its 6 percent annual yield paid on a monthly basis.  I also like TBT and/or TMV because interest rates cannot remain low forever. 

Why do some people consider P2P to be illiquid?  I have no trouble trading notes on Folio, especially if the notes are priced right.  However, I wish I could trade late notes on Prosper. 

I'm relatively young (28), and I just started a law practice at the beginning of this year.  Whatever funds I do not put back into my practice, I intend to invest 50% in P2P, 30% in the stock market, and 20% in savings.  Maybe I will buy real estate in the near future?

rajuabju

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Re: How much of your portfolio goes to P2P lending?
« Reply #41 on: April 06, 2013, 12:01:30 PM »
I'm 31, work in the family business (Real estate company). I've been steadily increasing my p2p holdings... Roughly my non-real estate holdings are now:

10% cash
5% CD's (yes, I had bought a few 7 and 10 year CD's which still havent matured, thankfully!)
15% bond funds
25% mutual funds
15% stocks (inc. high yield dividend stocks)
5% prosper
5% U-Haul IC
20% Lending Club

Most of my IRA and other retirement stuff is included in the above, primarily in bond and mutual funds. One area I havent diversified into at all is precious metals, just cause I dont know enough about it to get myself comfortable.
« Last Edit: April 06, 2013, 12:04:56 PM by rajuabju »

investforfreedom

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Re: How much of your portfolio goes to P2P lending?
« Reply #42 on: April 06, 2013, 05:51:33 PM »
I'm 31, work in the family business (Real estate company). I've been steadily increasing my p2p holdings... Roughly my non-real estate holdings are now:

10% cash
5% CD's (yes, I had bought a few 7 and 10 year CD's which still havent matured, thankfully!)
15% bond funds
25% mutual funds
15% stocks (inc. high yield dividend stocks)
5% prosper
5% U-Haul IC
20% Lending Club

Most of my IRA and other retirement stuff is included in the above, primarily in bond and mutual funds. One area I havent diversified into at all is precious metals, just cause I dont know enough about it to get myself comfortable.

IMO, precious metals should be in everyone's portfolio.  Sovereign governments all over the world have been printing money like there is no tomorrow.  Japan is QE-ing to infinity.  The Europeans have been talking about austerity, but Italy's debt, for instance, is still on the rise.  Right now, it's over 130% of its GDP.  While the velocity of money here in the U. S. has not increased even with all the three QEs and Operation Twist, we are at best the better looking house in a bad neighborhood.  There remain a lot of risks with the global financial system.  I don't recommend people sinking all their money into precious metals, but it is wise to allocate a portion of your assets into physical gold and silver (not digital ETF gold and silver funds).

Fred

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Re: How much of your portfolio goes to P2P lending?
« Reply #43 on: April 07, 2013, 06:57:42 PM »
it is wise to allocate a portion of your assets into physical gold and silver (not digital ETF gold and silver funds).

Do you also have the actual paper certificates of stocks/bonds you own? ;)

American in Busan

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Re: How much of your portfolio goes to P2P lending?
« Reply #44 on: April 07, 2013, 07:57:18 PM »
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 :)

I agree with rawraw. US treasuries securities are the closest you can get to risk-free return.

I also don't like TIPS but for different reasons. TIPS generate phantom income because of adjustment to principal invested and having to pay tax every year on interest earned. If your investment horizon for cash is more than a year, consider putting cash in US Treasuries I-series Bond specially if cash is in a taxable account. The interest earned on I-series bond is tax deferred until bonds are cashed. Only restrictions are that you can only buy I-series bonds up to $10,000 per SSN per year, can't cash within a year of purchase and lose 3 months of interest if cashed within 5 years.

I bonds > T-bills 99.9% of the time.