Harmoney

[bung5]

Two Months in: Have managed to double up and then some, switching to 4 notes per loan for most loans.

Invested: $54,229.89
Loans: 635
Avg. Loan Size: $85.31
Auto-Lends: 190
Avg. Interest: 22.79% (Weighted)
Avg. Exp. Return: 15.73% (Weighted less Default+Fees+Tax)

Expected Monthly Return to deal with: $1,471.20 (Principal + Interest : excludes payoffs)
XIRR.: 19.23% (starting to stabilise now)
Interest Paid to date: $302.96

After doing some calculations of my own I've settled on a Risk Grade spread from B3 to E3, which I feel will give me a good return with enough loans to keep up with the total investment I'm aiming for - I'll most likely narrow this spread as time goes on and I get a better feel for Grade defaults and timing, and other variations over time.

Loan Term Graph:

Attachment 8854

Risk Grade Graph:

Attachment 8855

Risk Grade Detailed Graph:

Attachment 8856

Thats a good effort getting 50k in a few months. I would like to get 50k in however finding hard to get the criteria I want.... mainly because I only want 36 month loans which seem to be few and far between. Currently investing between $100-$200 a day using auto-lend.

Wouldn't mind getting some 60 month loans if I knew there was a secondary market I could sell on. I might just have to concede and start getting the 60 month loans as to get capital invested quicker.

[Saamee]

Thats a good effort getting 50k in a few months. I would like to get 50k in however finding hard to get the criteria I want.... mainly because I only want 36 month loans which seem to be few and far between. Currently investing between $100-$200 a day using auto-lend.

Wouldn't mind getting some 60 month loans if I knew there was a secondary market I could sell on. I might just have to concede and start getting the 60 month loans as to get capital invested quicker.

You can count on approx 50% early repayment of all loans at HM.

[myles]

If you want to pay for my advice instead LOLLoan defaults start to kick in from month 9 or 10. Which is inline with Harmoneys stats.There is another graph somewhere a user here posted that takes into account Harmoney stats. It showed actual returns for each grade vs actual defaults.Using that data it showed returns were low if you invested in E and F. In fact returns were higher using D grades.

Nope, not paying for anyone's advice, especially advice provided on a forum...

A quick look back shows two previous discussions that touch on this.

For the record my write offs are

A 0 out of 266
B 0 out of 329
C 0 out of 245
D 2 out of 126
E 8 out of 87
F 2 out of 26

My annualised returns over a two year period are A 9.7%, B 12.2%, C 16.0% D 17.0%, E 13.7%, F 20.5%, Overall 12.2% This is quite a lot better than LC and I am not in Squirrel

and this

	average return PY	average loss PY	average total return PY
A	11.87%	0.17%	11.70%
B	15.15%	0.53%	14.62%
C	20.86%	1.20%	19.66%
D	27.25%	2.00%	25.25%
E	35.20%	4.28%	30.92%
F	39.63%	10.62%	29.01%

Read into them what you want, but they don't support a return of zero or less on either E or F grades.

Let's be clear, I said: "...should I be charging fees for my opinions through experience!!", I don't give advice.

Okay...I wouldn't pay for your opinions through experience either.

My guess, based on who knows what, is that the return graph would look something like the following, where the F5 loans would be approaching the same return of A1 loans. Just where the peak is, is simply too hard to determine and would be very dependant on the criteria used to select loans... By using a different selection criteria immediately means that one persons results will be completely different to anothers, even if they are selecting from the same Risk Grades...

Return.png
Please don't use this graph as anything more than a discussion point - it doesn't reflect reality...

[myles]

The other thing I meant to mention about that return graph, is that it would be constantly changing based on what is happening in the economy, especially over time, and any changes that Harmoney will no doubt be making on their loan grading...

[whitt]

Myles as you have mentioned return graphs are subject to economic conditions.

Harmoney actual stats dont currently reflect returns during a economic downturn as Harmoney hasn't been around long enough.
There was also a link to an overseas write up which outlined real results from p2p who existed at time of Gfc. These riskier grades had a spike in defaults and for those years the safer grades returned better.

Ideally if an economy slowed people might be better to invest in safer grades for those years. Then as economy improves again ramp back to riskier grades.

[myles]

Ideally if an economy slowed people might be better to invest in safer grades for those years. Then as economy improves again ramp back to riskier grades.

Agree. With the current President of the US doing 'unpredictable' things, possible government change coming in NZ, and the noise coming out of Aus. at the moment, I personally have taken a fairly measured approach.

However, when things settle a little, if they do, I'll be reinvesting early payoffs in a more aggressive risk profile for a better return. I've been focused on getting money in quickly to surpass the $50K amount to reduce the fee rate down to 15%. I'm still focused on getting money in reasonably quickly as the return is significantly better than I'm currently able to achieve, but I have foreign exchange rates depicting the timing of me moving money. Everyone's different.

There seems to be a few here who think they have the golden answer to how to invest in Harmoney, but I really don't think they are seeing the big picture. I just outline what I'm doing based on what I think is best for me - it may not be best for anyone else, there will be some who think it's wrong, that's fine by me

[myles]

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

[Investor]

Like I have mentioned before myles, after 2 years, I was shocked by the number of E an F grade defaults 13/16 to be exact. As I have not been taking any new E and F grade loans for a number of months, I now have one quarter left of the originals through default or repayment that will all come due between now and November 2018. My statistics show a NIL or Negative return once all these loans terminate.

I'm thinkin why turnover this money when the end result will be Zilch!

I strongly agree with B2 to D4: should I be charging fees for my opinions through experience!!

It's quite apparent that lending money at 31.81% (E1 Grade) or higher is usury and isn't ethical or intelligent.

[Bjauck]

It's quite apparent that lending money at 31.81% (E1 Grade) or higher is usury and isn't ethical or intelligent.

At what stage does lending money for interest become usury for you? For you, does it make a difference for what purpose the borrower wants or needs the money?

[Bjauck]

Most market place stats have been "temporarily unavailable" for some time now...Does anybody know if they intend to make them available again?