I think a good guide to diversification is to try to
average around 0.25% of total investment with a strict maximum of 1%,
per loan.
So, if you have $10,000 invested, an average around $25 per loan with a maximum of $100 per loan.
That equates to around 400 loans, irrespective of investment size, which I think is manageable from a time input point of view. Any more than this, when volume of loans is not high, means having to select loans of poorer 'quality' just to maintain diversification - a poor trade off in my opinion (but no doubt debatable).
I've currently got a little over 1200 loans (0.1%) and, although manageable because I have the time, if I go off line for a week, it can take a couple of weeks to get on top of it again.
My thoughts only...I'm working to reduce my total number of loans ;)
[An old article that provides some good numbers around this:
https://www.lendingmemo.com/risk-div...n-p2p-lending/]
Caveat of the above worth thinking about
:
- timing of loans - a good spread throughout the year will also ensure diversity as I think there are periods of the year that present more risk than others (e.g. lead up to Christmas)
- manually select loans - if you rely on auto-lend you can potentially get some 'dodgy' loans
- if you only want to chase an average return ignore the above and invest the minimum amount ($25) in as many loans as available
If you consider the above - investing in one or two loans each day would do it - not hard to do, provided loans are available...