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Posted by Martin September 11, 2012
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Focus on savings and investing with Lending Club

Focus on savings and investing with Lending Club

Money growing Recently I was evaluating my investment goals and the way I was saving money for investing. In many of my previous posts I preached a way of saving into non transaction fee mutual funds, which would allow investing small amounts let’s say $50 every month without paying a fee. Then I could see something I didn’t like. Those funds locked my money for 6 months. If you sell prior to that test period you will pay a back fee. Another issue with this is that the return on those mutual funds was very low, many times they didn’t even keep up with the market and in many occasions lost value.

Yes in a long term, the mutual funds can be a great tool, but they didn’t look great to my purpose.

And I didn’t see a great opportunity I had right under my nose. Investing with Lending Club. Yes, that investment can lock your funds for up to three years, but you can always sell on the secondary market FolioFn and raise your cash back.

At first I was scared of this, thinking that I could be losing money when selling on the secondary market, but over the time I realized – not necessarily!

I’ve been investing with Lending Club for three years and since the beginning I was able to reach 12.83% annual return rate, no delinquent or late notes and when needed I was able to sell notes without having negative impact to my return rate. After almost three years of successful investing with Lending Club I realized that this may be the vehicle I was looking for and which can help me to park my small money, grow them on a nice high interest rate and relatively safely.

I redirected all my savings to my Lending Club account and I also decided to take some risk and use leverage to boost my account value and get more money back home. I took a loan of 2000 dollars at 7% interest rate and invested that loan in my Lending Club 12.83% rate netting 5.83% return home. I am paying the loan from my regular paychecks which totals some 61 dollars per month, but my Lending Club “loan portfolio” is paying me some 63 dollars monthly back, which I decided to reinvest and use it to pay the original loan back only if i won’t be able to pay it back using my paycheck proceeds. This looks to me like a nice plan, so after three years I will repeat the process, borrow another 2,000 dollar or more and invest it.

However, this approach may not be suitable for everybody. You have to know how to invest with Lending Club and protect your current investments. On the Internet you may find a lot of negative articles of people with bad experience or low return on investment results. When I was reading through some of those articles, I could see how badly managed their portfolios were. Loses can be avoided if you know how to do it. Next time I will try to write about some of the techniques you can use to protect your portfolio and get rid of the notes before they turn bad.

Before then, here are the charts of the current value of my Lending Club account and monthly payments (principal and interest):

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Happy Trading!




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Posted by Martin August 03, 2012
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What do you think?


In today’s morning papers Mitt Romney promised 12 million new jobs in his first term if he captures the White House.
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Posted by Martin July 31, 2012
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Poll


Tell us what do you think:

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Thanks




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Posted by Martin July 30, 2012
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Lending Club investing experience


If you ever heard about Lending Club, seen some ads about investing with Lending Club and making 9% or more, you probably wonder whether it works or it is safe investing. You probable tried searching on Internet to find out what others have to say about this type of investing.

Are you confused about the amount of articles?

Well I have been investing with Lending Club for about three years right now. During this period I read many articles from the Internet seeking what are experiences of other people who invest with Lending Club. There are plenty of possible articles on this matter!

The results of those articles articles may be very confusing and discouraging new investors. A lot of them basically claim that Lending Club investment is not that bright and that excellent as it claims to be. Many said that their return was actually lower that claimed. Many pointed out that there is actually higher real default rate than the one claimed.

What I have found is that many investors who participated on their private “tests” of investing with Lending Club actually mistaken this type of investment with savings account. They put their money to work, invested a few thousands of dollar and then forgot about them. At the end of their three year period they provided the results which were mediocre.

Investing with Lending Club is not a savings account. It needs your attention. It needs your attention almost on daily basis (depends how large your portfolio is). It is almost similar to investing into stocks and you have to do your homework prior to investing into debt notes. Fortunately Lending Club provides you with great tools to do it. You can set your filters up to weed out notes with bad records on file (I wrote about my filters in this post, you can check it out). After investing your work doesn’t end. I review my portfolio almost on daily basis and always check the notes how they are performing.

If I spot notes which look to me problematic, or showing a potential for trouble, I sell them. No questions asked, no double guessing. There are tools and strategies which can help you to find such notes in your portfolio and you can get rid of them while it is possible. It is late to try getting rid of note which are already late. You have to do your homework constantly, the same way as with your stocks (if you invest into stocks).

You cannot stay passive. Only active investor, planting his portfolio diligently and weeding out all bad weed will be rewarded. I am trying to do my part and to this day my return is 12.71% and I had no defaulted note for the whole time investing with Lending Club although I am investing into A to E notes. So if you are OK to do some work don’t worry, go for it and you will be pleasantly surprised. If you need help, you can write me a note and I can help you to start.




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Posted by Martin April 17, 2012
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My blogging break


Recently I stopped posting my trades on this blog. The reason was that I had very little time doing it and the second reason was that my trade results were not as I would wish and I slowed down in trading. At the end of the last year I was quite successful in trading and lately, thinking what a great trader I was I overdone trading and lost all my profit, so at this point I am again where I was last year.

To me it means going back to basics and trade with limited risk at a time. For me it is hard to say, since I wish to be fully invested if possible. I want all my money work for me and not sitting idle in the account. But maybe some cash reserve is needed to protect my holdings. A few months ago I overextended my trading so much that margin calls almost ruined my account. At this point I am going slow down in trading as well as working on my trading plan and start posting here more when I achieve some consistency in my trading.




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Posted by Martin March 01, 2012
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January Consumer Spending Growth Weak


Consumer spending rose less than expected in January even as incomes improved, an indication that Americans may still be unsure about the slowly recovering economy.

Personal income increased 0.3% from the prior month while spending rose 0.2%, the Commerce Department said Thursday. In December, spending was flat, but incomes rose 0.5%.

Economists surveyed by Dow Jones Newswires were expecting both spending and income to rise 0.4% in January.

Source: www.dowjones.com




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Posted by Martin March 01, 2012
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ISM Feb Manufacturing Index Falls


The U.S. manufacturing sector’s expansion slowed in February, according to data released Thursday by the Institute for Supply Management. The report followed disappointing data covering January consumer activity that led some economists to mark down their estimates of first-quarter economic growth.

The ISM’s manufacturing purchasing managers’ index fell to 52.4 last month from 54.1 in January. The February reading was the weakest since November. A reading above 50 indicates expanding activity.

Economists surveyed by Dow Jones Newswires had expected the February PMI to increase to 54.9.

Factory surveys from regional Federal Reserve banks as well as the ISM-Chicago’s local PMI all indicated a speed-up in activity last month. Thursday’s ISM report raises questions about the strength of the expansion on a nationwide level.

Source: www.dowjones.com




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Posted by Martin January 09, 2012
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New trade – FCX


Freeport McMoRan (FCX)

Bear Call spread

BTO 1 FCX Feb18 2012 42.00 Call
STO 1 FCX Feb18 2012 39.00 Call

Price: limit credit $1.20

Max risk: $180
Max gain: $120 if price stays below $39 at expiration

Update:
01/10/2012 – filled @ $1.2 ($120 credit)




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Posted by Martin January 06, 2012
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New trade – DO


This trade shall open on Monday next week:

Diamond Offshore Drilling Inc (DO)

Iron Condor

BTO 1 DO Jan21 2012 66.25 Call
STO 1 DO Jan21 2012 61.25 Call
STO 1 DO Jan21 2012 52.00 Put
BTO 1 DO Jan21 2012 47.00 Put

Price: limit credit $4.61

Max risk: $39
Max gain: $461 if price is between 52.00 – 61.25 at expiration

Update:
01/09/2012 – trade canceled – market maker unable to execute as condor combination, it may work as separate spreads, so I will review later if it makes sense to add as separate spreads.




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Posted by Martin January 05, 2012
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New trade – UNG


U.S. Natural Gas ETF (UNG)

Long call

BTO 1 UNG Apr21 2012 7 Call

Price: limit debit $0.25

Max risk: $25
Max gain: Unlimited

Update:
01/07/2012 – canceled, it didn’t meet the entry price




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