Test Accounts Week 17

Another up and down week for the markets. The S&P 500 Index had a strong Friday making up for losses in the first four days, finishing up 0.4% for the week. Folio Investing easily outpaced the index for the week, up 1.2%. The Biotech RTG had a very big Friday leading the way up for the week. Schwab Intelligent Portfolios (SIP) matched the index up 0.4%. Lending Club was up 0.2% and Betterment 0.1%.

W/E	S&P 500	BTRMNT	FOLIO	LND CLB	SCHWAB
16-Jan	-1.2%	0.0%	-0.2%	0.0%	-0.2%
23-Jan	1.6%	1.1%	2.0%	0.0%	1.0%
30-Jan	-2.8%	-1.5%	-2.0%	0.0%	-1.3%
6-Feb	3.0%	1.0%	0.9%	0.0%	1.3%
14-Feb	2.0%	1.0%	1.8%	0.0%	1.2%
21-Feb	0.6%	0.6%	0.5%	0.0%	0.4%
28-Feb	-0.3%	0.2%	0.3%	0.7%	0.0%
6-Mar	-1.6%	-1.6%	-0.9%	0.3%	-2.1%
13-Mar	-0.9%	-0.1%	-0.6%	0.2%	-0.7%
20-Mar	2.7%	2.1%	0.6%	0.2%	1.0%
27-Mar	-2.2%	-1.0%	-2.3%	0.3%	0.5%
3-Apr	0.3%	0.6%	0.0%	0.3%	0.8%
10-Apr	1.7%	1.2%	2.5%	0.3%	1.3%
17-Apr	-1.0%	-0.3%	-1.5%	0.3%	-0.3%
24-Apr	1.8%	1.0%	1.9%	0.3%	1.0%
1-May	-0.4%	-0.8%	-3.5%	0.3%	-0.6%
8-May	0.4%	0.1%	1.2%	0.2%	0.4%

 Since I started this 17 weeks ago, the S&P 500 Index is up 3.5%. Betterment and Lending Club are also up 3.5%. Folio Investing is only up 0.6% for period, but without the $290 annual trading fee, it would be also up 3.5%. Interesting coincident. Only Schwab’s SIP is different, up 3.9%.

Lending Club Notes Surprise

There are currently 388 notes in the Lending Club account. There are 380 currently issued and active. I fully expected some of the Lending Club notes to have gone bad by now, but they haven’t. One is in the late payment stage and is likely working its way down. A few have entered the grace period and then recovered. It does appear that the one that’s late will become a bad note in a few more months. This is all as expected.

What I did not expect was for someone to pay off a note shorty after acquiring the loan. Four people have this. I don’t understand this, so I looked at the loans. The 4 had interest rates ranging from 15% to 26%. Two of the loans had 2 monthly payments made and the other 2 had made 1 payment. All were taken out for debt consolidation, ranging from a $10,000 36 month loan to a $35,000 60 month loan. Presumably the debts were paid off and another source was found to pay off the Lending Club notes. All 4 had slightly improved credit ratings (as do about 2/3rds of the people taking out these loans). So they likely found a cheaper source of funds.

From my perspective there was little impact of the early payments.

Note	Amount	Interest	Paid Back	Annual Return
40482507	$25.00	15.99%	26.26	15.24%
39805695	$25.00	25.57%	26.44	24.55%
40523483	$25.00	14.99%	25.63	14.83%
40523483	$25.00	25.80%	25.40	24.85%

The returns I actually achieved were slightly below what I would have earned, but there isn’t any more risk with these notes. The funds have been re-invested in another notes. All things considered, I think Notes paid off early are a good thing for me.

I’ll be updating the test accounts weekly performances again this weekend. I’ll post when this occurs on Twitter @billlanke.

Test Accounts Week 16

This week seemed like the reverse of last week. A rally on Friday cut the losses for the week, but the S&P 500 Index still finished down for the week, -0.4%. Betterment dropped -0.8%, Schwab was down -0.6%, and Folio Investing finished -3.5%. Interestingly, the robo-advisers had bigger swings than the S&P 500 which is just the opposite of normal. I looked at specific ETF changes and concluded that the S&P 500 actually performed better than the overall market and was not an indicator of how bad the week was. Folio Investing dropped a lot because it has more volatile holdings.

The Wealthfront account was closed a week ago and consequently shows no change from the previous week (which made it the best performing robo-adviser). It appears here, but will be dropped from the future weekly updates.

There are 4 notes in the Lending Club account that have been paid in full. This is prompting me to do a little more analysis of the Lending Club notes. I’ll document in my findings in a mid-week post. Follow me on Twitter @billlanke and I’ll let you know when I post it.

W/E	S&P 500	BTRMNT	WLTFRNT	FOLIO	LND CLB	SCHWAB
16-Jan	-1.2%	0.0%	0.4%	-0.2%	0.0%	-0.2%
23-Jan	1.6%	1.1%	0.7%	2.0%	0.0%	1.0%
30-Jan	-2.8%	-1.5%	-0.9%	-2.0%	0.0%	-1.3%
6-Feb	3.0%	1.0%	1.0%	0.9%	0.0%	1.3%
14-Feb	2.0%	1.0%	0.8%	1.8%	0.0%	1.2%
21-Feb	0.6%	0.6%	0.4%	0.5%	0.0%	0.4%
28-Feb	-0.3%	0.2%	0.2%	0.3%	0.7%	0.0%
6-Mar	-1.6%	-1.6%	-1.8%	-0.9%	0.3%	-2.1%
13-Mar	-0.9%	-0.1%	-0.3%	-0.6%	0.2%	-0.7%
20-Mar	2.7%	2.1%	2.0%	0.6%	0.2%	1.0%
27-Mar	-2.2%	-1.0%	-1.1%	-2.3%	0.3%	0.5%
3-Apr	0.3%	0.6%	0.6%	0.0%	0.3%	0.8%
10-Apr	1.7%	1.2%	1.0%	2.5%	0.3%	1.3%
17-Apr	-1.0%	-0.3%	-0.2%	-1.5%	0.3%	-0.3%
24-Apr	1.8%	1.0%	0.8%	1.9%	0.3%	1.0%
1-May	-0.4%	-0.8%	0.0%	-3.5%	0.3%	-0.6%