Now that I’ve gotten both accounts completely closed I
decided to share my history with the Lending Club IRA graphically. I tracked my
account holdings daily and rolled these into a weekly spreadsheet. This is the
data from the spreadsheet. There are two lines on the graph. One represents the
annual return rate by comparing the week ending balance to that of 52 weeks
prior (and adjusting for withdrawals). The second is the number of notes in my
account (in hundreds).
The initial return rate was running at 8% and all was good.
I was using automatic investment, so as cash was accumulated in the account,
Lending Club selected new notes to fit the profile I had set. Then in September
2016 the return rate started a steady decline. In early December 2016 I turned
off automatic investment when the return rate had fallen to about 4%. The fall
was because of an increasing rate of charge offs. This was probably due to
increasing age of the portfolio and the fact that automatic investment was
doing a poor job at the time.
By the end of 2016 I decided that I had had enough and was
going to let the account run out. I started withdrawing the cash as it
accumulated. I did experiment in 2017 buying some notes at FOLIO for test cases
and accidentally turned on automated investment for a few days and it sucked a
lot of cash from my account in 2 days an added over 100 new notes.
The graph demonstrates that the return fell steadily. I
don’t know if I could have turned it around by re-investing in more notes and
using a strategy other than automatic investing. My next and final post will be
a summary of my opinions on Lending Club. Follow me on @billlanke to know when
I post this.
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