LendingClub/LendingRobot Test Investment - Verdict is NO

Oct 20,2016@10;14 AM

Fascinating, thanks. I decided to experiment with LendingRobot as well at the beginning of the year and just checked my LendingRobot account. I put in $20K at the beginning of the year and my current account value is $21,353. 14 loans (total value $321) have defaulted so far. Annualized, that means that the very best case is 9%, but my guess is that I'm going to see several more loans default, and I'll end up with something between 3% to 6% when all is said and done. Agree with the others here-- basically not worth it. I'm going to stop reinvesting and will park my cash elsewhere.

Oct 20,2016@10;13 AM

Thanks for the breakdown, Mark! I've had a better experience (so far) using LendingClub and Prosper. I doubted LendingRobot's algorithm and choice in loans when we first brought this up (see the previous forum on it). Instead I used NSR Platform to do a lot of personal R&D to find what I thought to be the best historical criteria to use when buying into LC and Prosper respectively. I then used the automated investing on the two platforms with those criteria. LendingClub: 12.20% Adjusted Net Annualized Return Prosper: 15.32% Annualized Net Return I tend to the more risky loans, but I've (hopefully) curbed much of the defaults of these by analyzing and cherry-picking the "safest" of these loans. LendingClub Breakdown: 50% C 16% D 18% E 12% F 4% G Prosper Breakdown: 8% B 21% C 32% D 26% E 13% HR One thing to note is that it took me quite a while to deploy my funds into these two since I was picky. I started around the same time as you, Mark. Prosper was fully vested about 5-6 weeks ago; LC about 2 weeks ago. Also, I reinvest all my payments back in so that extended the timeframe as well. Now that I'm fully vested, it'll be interesting to see how the next 6-12 months goes with both these two as it's usually the first year where you get the most defaults. I am not adding any funds to these nor do I plan to, however, I am keeping the reinvestment of payments. The real return, if I'm to believe the adjusted account values on the two (which takes into account standard default rates) on both so far: LendingClub: 5.4% Prosper: 7.1% Again, this is not annualized and with significant ramp up time to get fully vested. It looks a bit better than Mark's 3.5% return (using LendingRobot vested very close to the beginning of the year). However, many of my loans are still early in the cycle, so time will tell.

Oct 20,2016@10;10 AM

Here's my LC experience. I started with LC in 2012. I used LC's own auto invest feature. To date, I have roughly 7% IRR (based on my calculations and not LC's). I heard a podcast of someone who analyzed the loan information that LC posts. During the 2008 recession, had you invested in A/B notes, you would have still averaged about 5-6% return, but would have lost money on C-G notes. During the last few years, C-G notes outperformed A-B notes. I didn't do any analysis myself, but this makes sense. So over the long term, 6-7% seems reasonable. However "long term" is questionable as P2P lending is still a new industry. Since I'm in a high tax bracket (and in CA), I've been peeling money out of my own LC account and started a UGMA account for my son early this year. The investment criteria is exactly identical but so I have a 5.96% "adjusted" return per LC. And hence so far 2016 has underperformed for LC compared to last few years. I started with $10K in this account and have withdrawn $4K as I too am losing faith in LC. I also started trialing LendingRobot 1 mo ago but is too early to tell if that has changed anything. On a separate question, has anyone invested with a UGMA/UTMA account in any RE crowdfunding platforms? I'd imagine if they allow it, it has to allow nonaccredited investors.