Portfolio Update April 2013

Since my last update I’ve added about $12,000 to my P2P lending accounts, split 50/50 between Lending Club and Prosper.

Lending Club

lc_portfolio_april_2013

lc_term_april_2013 lc_grade_april_2013

 

My portfolio continues to move towards my goal of a 50/50 split for loan term. Back in September of 2012 my portfolio was about 76% 60 month notes.  My ROI has been pretty stable around 12%, and according to the NSR Portfolio Analyzer it’s 11.08%.

Right now you can get a 5 year CD  (considered risk free up to 250K) at 1.3%. Perhaps a poor comparison but illustrates that P2P lending is capable of out performing bank offerings handily. Even if you look at Junk Bonds which are paying about 7%, we’re seeing solid, stable returns with very little volatility with a higher ROI.

Prosper

My ROI on Prosper has come down a bit from the 19% I saw last year, but it has come more inline with my realistic expectations. As you can see, even my seasoned ROI (excludes the last 10 months of issued note) is over 14%. Keep in mind though Prosper allows you access to interest rates over 25%, the current Lending Club cap.  These loans are considered higher risk, so of course there is the potential for higher default loss.   My current weighted average return for Prosper is 22.23% verse 17.58% on Lending Club.

 

prosper_april_roi


prosper_april_term

prosper_april_rating

 

 Conclusion

My focus for now is opening IRAs with Lending Club and Prosper. I won’t be adding anymore cash to my taxable P2P accounts this year. By the end of the year my goal is to have my notes exceed $50,000.

Be Sociable, Share!
  • http://twitter.com/ThomasDeLong Tom DeLong

    Nice work – thanks for the update.

    • http://www.nickelsteamroller.com/ Michael

      Thank Tom!

  • http://twitter.com/LendingMemo Simon Cunningham

    Nicely done Michael. Love the comment about CD rates.

    • http://www.nickelsteamroller.com/ Michael

      Lending Club and Prosper let you “be your own bank” and set your own CDs rates. Its a great setup!

  • http://twitter.com/MilitaryMoneyM MilitaryMoneyManual

    How many of those Lending Club notes are mature (older than 10 months or so)? Looks like a great return on investment and a great motivation for me to increase my return this year.

    • http://www.nickelsteamroller.com/ Michael

      The reporting ROI on LC’s site does not have a concept of matured/seasoned note. You can simulate this thought on my portfolio analyzer: http://www.nickelsteamroller.com/portfolio.

      Historically for me there has been about 2 – 2.5% spread once you filter out the loans issued in the late 10 months. I would definitely recommend focusing on P2P lending as a long term strategy. I really believe Lending Club and Prosper are on to something very disruptive to the Wall Street roller coaster.

  • http://twitter.com/StuFinancesTech Stu Lustman

    Nice job Michael. Way to take advantage of both platforms. I seem to like the Prosper platform better although I can’t really explain why. If you are going to focus your P2P loan investments on your IRA then there would be some good article topics on Self directed IRAs for use in P2P. Maybe I will write about them on my blog too.

    • http://www.nickelsteamroller.com/ Michael

      Stu, both companies have their own IRA company they contract with, no need for a self directed. Its an interesting topic to explore. Presumably Prosper is higher risk given interest rate, so do you want retirement accounts there? Not sure if I can answer that. Typically high risk bonds are astronomically tax inefficient. It’s why I feel taxable exposure should be limited, however I would be more conservative in an IRA – likely have a sizable B position unlike my taxable account.