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Wednesday, July 20, 2016

Lending Club - My first $500 invested


Recently, Lending Club expanded to allow investors to join that live in Michigan (where I currently live). I have been casually waiting for this moment to happen and recently opened a new account to get my feet wet. There are countless posts and articles written about Lending Club, so I will spare you a step by step account of how to, or what it is. Instead I will hit on a couple of neat points from my experience so far (it has only been a few months).

First off, I only put in $500 because I wasn't sure if I would like this style of investing or not. So far, I really like it! Let me explain what I did. I put in my $500 and Lending Club selected a group of 20 loans for me to invest $25 into each. These were chosen from my input that I wanted lower risk loans. Lower risk means lower returns because the loans are given out to those with higher credit scores, higher paying jobs, etc.. You can choose a mix if you want, as they have categories from A to F to invest in ranging from roughly 5% to 35% interest rate.


A snippet of the display for some of my loans:


As you can see, each month, I get a portion of my principal plus interest back on each loan. This is very important because if one borrower falls through and doesnt pay, I am not out all $500, only the $25 I put into that one loan. Now of course, if all 20 of my borrowers fail to pay, then I will be out the $500, but it appears that Lending Club does put some work into understanding the borrower's financial status, FICO score, and purpose for the loan.

Here is my summary screen, showing the projected interest rate (which accounts for borrowers that may not pay back everything).


Summary

 So far, I love it! I see why its a popular choice. As I mentioned just above, the thing I did not realize was that you only invest a very small amount in each loan, so you aren't playing roulette with your money. You can invest more in a loan if you feel like, but I wouldn't. Currently there are over 1700 loans that you can invest in and you can see a lot of detail about each loan if you want to take the time. I am going to run with the $500 I have for a few months and see how I like it over a longer period. If I continue to like it, I will start to invest more in this style of investing.


What are your thoughts on peer to peer lending? Do you think its a fad or here to stay? Please weigh in and let me know what you think!



Disclaimer: I am not a licensed investment professional. I am not liable for any losses suffered by any parties. Any information on this site is my opinion only and should not be used for investments of any kind.

Tuesday, July 19, 2016

Recent Buy (TGT) - July 19, 2016

 A red bullseye with one ring is shown.

  • Bought 6.7 shares of TGT at $73.74 for a total of $500

This move increases my dividend projections by $16.15 annually and increases my TOTAL number of TGT shares to 23.73 shares.

In my weekly summaries,  the top stocks being bought lately are WFC and TGT. This isn't the reason I bought, but it is nice to have company when making a purchase. Looking at the chart below, you can see the current stock price (black line) is currently just below the earnings (orange line) and earnings projections are up over the next few years. That is one reason why I consider them to be valued fairly right now.

 


Another thing I like to look at is the dividend growth and the payout ratio. The data below shows a nice consistent dividend growth and also a respectable payout ratio. They appear to be raising the dividend in line with their EPS increases each year which is promising to see.


 

It is not all roses as I understand that Brick and Mortar stores are facing headwinds lately with online competitors and Target has been the bearer of quite a few public issues lately, but overall I think Target is here to stay and am not afraid to stockpile when the price is at a discount.

What do you think of TGT


Full portfolio here.


Long: TGT

Disclaimer: I am not a licensed investment professional. I am not liable for any losses suffered by any parties. Any information on this site is my opinion only and should not be used for investments of any kind.