Quote Originally Posted by myles View Post
One thing I'd add to the above is that trying to predict the ups and downs of any market is ALWAYS fraught with risk. Better to look at the long term and 'ride' through the ups and downs. Investing 101 type stuff applies here too I think
I agree with pretty much everything you have posted - we've come to the same conclusion the sweet spot is E grade loans (you further clarified its grade E5 I believe?), so you would in theory build your portfolio around this to maximise returns.

One things however that has always nagged me is all the stats harmoney has to determine these default rates - are they from the current and near past economic climate where everything has been good? because if so then the data set all these stats which we model off, is only reflective off good times.

So keeping this in mind, i have swayed back and forth between having a B-C weighted portfolio, or a more B-C-D-E one like I actually have.

One thing though you are locked in for 3 or 5 years, but you get about 3% of your capital back every month via natural repayments and loans paid off early, so you do have time to re position your portfolio as you might see the current economic climate changing and potential defaults going up.

That being said I am happy to be weighted B / C / D / E, for now I have $100k in there, but not gonna re invest any til I am down to $50k, just gonna have it coming out to kinda just test how it goes, only have been in 8 months and don't want to get too carried away too early with it