has anyone tried out lendingclub.com (not to be confused with lending tree)? i got a link through mint.com and they offered a bonus for joining with $2500, no doubt subject to some requirements that will be listed if i sign up.
i’ve read mixed opinions. but the free $100 is tempting me. i’m edging toward trying it out, but if anyone has “no fool, they suck!” messages, i’d like to hear them.
I don’t know anything about them, but on their “How it works” page, they show lenders getting a return of 9.67% and borrowers paying 6.78%, which seems to be… mathematically unlikely.
Footnotes, my friend! With that 6.78% APR highlighted on the chart is a tiny little 1…
1 Rate based on A1 Loan Grade, subject to credit approval. All loans made by WebBank, a Utah-chartered Industrial Bank. Annual percentage rates for all loans range from 6.78% (A1) to 25.41% (G5). Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history.
Before you get too excited about Lending Club (as a lender), I would encourage you to go the statistics page, download section, here:
https://www.lendingclub.com/info/download-data.action
Download the loan data. Strip out the loans that were applied for but not made. Sort by “Issued Date”. Then delete all the recent loans (2010/11, and probably 2009), and look at how all the older loans have performed (i.e. the ones that have been out there for a while).
Hint: you might find that annual returns on loans that have been out for a while are, umm, rather less than 9.67%…
Also, to pre-empt any complaints of:
“Download the data and analyze it? Why, that sounds like, uh, work…”
If you want a reasonable investment without work, try a broad based index fund (for risk-tolerant investors), or a CD (for risk-averse investors), or other investments with a reasonably long track record. And if all you want to do is gamble it up, without analysis or much thought, well, try your state lottery or your local casino.
On the serious front, I’ve been sitting on a good chunk of cash and recently threw most of it into funds, a Vanguard aggressive foreign index for dangerous growth, and a balanced large-cap. These are semi-short-term investments since I’ll likely need the money at some point in the near future, my long money is still in VFINX and VNR, plus 401ks that I have no idea what they’re doing. I did carve off another chunk of play money and put it in a medical company that just. can’t. lose.
Kidding.
H.
I put 2500 into Lending Club. Have had 1 25 dollar loan default, rest have been fine. It is 1 year into my adventure there. Not sure if I’ll do it again, but it hasn’t been horrible. I did spend a lot of time researching the loans which I’d rather not have to go through again.
A couple of fun index ETFs to consider.
RSP an equal weighted S&P 500 fund. Better returns as each company is equally represented so you don’t get overweight certain sectors.
JJA if you believe in inflation and global growth then this gives you agriculture exposure.
RYE an equal weighted energy index, similar in style to RSP but doing it in the energy sector.
DNH Exposure to pacific excluding Japan.
EFT will not be as subject to rising interest rates as a traditional bond fund as it is a floating rate fund.
VCSH the best short term bond etf
PEY high dividend stock etf
The idea is you need 2 buckets. A fixed income bucket and a capital growth bucket. You want to be able to live off of your fixed income bucket. Your fixed income bucket can be any combo of bonds, dividend stocks, treasuries, etc. that pay out a fixed income that can be relied on on a yearly or monthly basis. The goal for this bucket is what you think you’ll need to live on when you retire.
If you think you need 100k a year to live on in retirement, then you need that fixed income bucket to be able to shrug off 100k in fixed income each year when you retire. If through a combination of your bonds and high dividend stocks you can get a 5% return then you need 2 million in that fixed income bucket. Your capital growth bucket is a feeder for your fixed income bucket, how long you keep money in there is dependent on your risk tolerance.
That is the way I use to help people understand their retirement decisions.
Is there a good India index fund? I’m starting to believe the various reports that China will gradually fall away as India takes over the economic world.
H.
I’m interested in starting a small business. Has anyone used these sites from the other end?
Maybe you and me, we can work something out. You know, friendly-like. Say ten percent a month, leg breaking optional?
H.
I am not too proud, nor educated, to accept offers such as this.
Yay me! DEPO up 30% today! Boo me! Didn’t put entire net worth in DEPO because I don’t want to lose all my money.
H.
Out of Depo before the slide. Now I’m looking at PWER, they had a massive sell-off on Friday that I admit I don’t understand. Why don’t some of the smart folks explain why it isn’t a good deal right now at 8.80. P/E of 8, low debt, high profits, etc.
You’re looking for the “gambling is fun” investment thread.
Pish posh, it’s play money so I get to gamble. How are we going to have fun discussing the mutual funds we’ve been in for months or years?
Right, but you’re in the wrong thread.
It’s my thread, nyah. So we can’t seriously, thoughtfully invest in individual stocks under any circumstances, eh?
For those who still insist that just sticking everything into an S&P500 index fund and forgetting it is best, this article came up in my Capital Markets class. Note well the ten year chart; the effort required to make that change in your portfolio, by the way, is one phone call/web session per year.
‘Buy and Hold’ Is Still a Winner: An investor who used index funds and stayed the course could have earned satisfactory returns even during the first decade of the 21st century.
The other useful technique is “rebalancing,” keeping the portfolio asset allocation consistent with the investor’s risk tolerance. For example, suppose an investor was most comfortable choosing an initial allocation of 60% equities, 40% bonds. As stock and bond prices change, these proportions will change as well. Rebalancing involves selling some of the asset class whose share is above the desired allocation and putting the money into the other asset class. From 1996 through 1999, annually rebalancing such a portfolio improved its return by 1 and 1/3 percentage points per year versus a strategy of making no changes.
(the “rebuttal” comments on the article are hilarious)
This is not investment advice, you are not my client, I am not licensed, go see your financial advisor.
Subscriber-only, but of COURSE rebalancing is a good idea. Nobody denies that. That’s part of the standard advice: Dollar-cost average into your index funds (which should consist of a total US stock fund, an international stock fund, and possibly a bond fund depending on your time horizon), rebalance annually to keep your allocations at your preferred percentages, and bump up your contribution amounts every year as you get raises.
Whoa, strange. I’m not a subscriber. Here’s how I hax0r3d the article (which has the same URL as my link).
Google: site:wsj.com malkiel winner
Should be the first hit.
Over the years some people here have gotten so hung up on the S&P500 index investment vehicle that they have neglected to allocate to other asset classes and (I’m willing to bet) have not been rebalancing their portfolios. For example, see post #5 in this thread from one of the most well-read people on the forum. I also seem to recall that there are a few people here who downplay DCA.
So standard advice, yes, but I just like to send up little reminders every so often. :)
This is not investment advice, you are not my client, I am not licensed, go see your financial advisor.