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New to LC-Bad Timing?

Started by Peter, April 25, 2017, 11:00:00 PM

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Well I have read a number of posts here, and do not know what to think. The reason I chose P2P Lending and Lending Club is I want to diversify outside of the stock market.

I have been a stock market investor since the early 90s and have seen bull and bear markets, euphoria and crashes like most of the members here. Human nature is part of the investing equation and for many years this was the part that stumped me-keeping my own emotions in check. Over the last 25 years, I have learned a lot about myself-investment wise.

I don't know if I will be successful investing in P2P Lending with the various notes of different quality. There is a segment of the market I have been successful in and that is Penny stock investing. I buy stocks $3 per share or less. To be honest, I follow the Bowser Report and have done quite well. There are a lot of similarities about Penny stock and P2P investing. You never know how you will do. Therefore, I have an open mind about what kind of returns I will get with P2P investing.

My portfolios have different strategies. A passive strategy is the one I prefer. One of my portfolios is a Dog of the Dow strategy, buying the 10 highest yielding Dow stocks and my other portfolio uses an Ivy Portfolio strategy with 5 ETFs and I rebalance the portfolio quarterly. This takes the emotion out for me and forces me to use discipline. That is the key for me-having discipline. Also I own DRIPs. Again, I never try to time the market. Right now I am adding to Exxon and some REITs because these are down.

I'm going to take the P2P Lending slow and not expect too much as far as what kind of returns I will get. There are some strategies I have thought about, but I am reading how others handle their P2P portfolio(s).

I am skeptical anyone can consistently time the market or predict the future. All investing is risky. All investments have cycles.


LendingClub is nothing like trading penny stocks.  LendingClub would be like touching a hot light bulb and penny stocks would be like reaching out to touch a flame thrower.


Perhaps I need to be more specific. A penny stock is any stock that trades below $5 a share. My range is usually  $.50 to $3.00. I would never buy a penny stock for .001.

But my trading and investing in the penny stock area has given me greater clarity about the nature of risk and how most people underestimate the amount of risk they are taking with various investments.

If I can be successful in this area of the market, I can come to P2P investing with a bit of soberness.  I know the risks associated with the D, E, F and G rates. I will not be seduced by trying to get stock market returns from this kind of investing vehicle. Anyone who wants stock market returns should invest in the stock market, whether actively (picking) or passively (indexing).

It seems like a lot of people are bailing out of P2P investing. This might be an excellent time to put your toe in the P2P investing ocean. Of course you have to buy when others are selling and this usually goes against human nature.

Thanks for the comparison about the hot light bulb and the flame thrower. 

BTW, I am slowing building my Lending Club account. I would consider the notes I have bought to be cool to the touch.


Sounds like you approaching this the right way.  Just remember part of your risk comes from LC the platform. It isn't a very big risk right now, but if people stopped buying you have to worry about LC's credit quality as well as your notes.  Since you are technically a unsecured creditor of LC.



There was a scandal in April 2016, and many institutional investors (banks especially) stopped investing until the dust settled.  They are earning these guys back one by one now.

You can google for details, or read the SEC filings.

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