PeerCube Thoughts

Opinions and analysis of Marketplace Lending, Online Lending, and Peer to Peer Lending.

Lending Club FOLIOfn Secondary Market: Penny Note Strategy based on Lowest Ask Price

Chart of the Day: Lending Club Charge Off Rate with 2015 Payment Month by Credit Grade

A Decision Tree Approach to determining allocation to P2P Lending in your Portfolio


The decision tree below shows a simplified procedure to determine the appropriate allocation to marketplace lending based on desired stocks and bonds allocation in the portfolio (a 2-way split). This procedure assumes that you know your risk profile and desired asset allocation between stocks and bonds. Stocks are considered inherently more risky than Bonds. P2P Lending can be considered speculative bonds as there is no past performance information available across different business and economic cycles.

The estimated P2P Lending allocation may be considered as upper limit to your participation in marketplace lending. This approach can be further enhanced by segmenting the asset allocation in more than two assets and creating n-way split.

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