How much should you invest in Marketplace Lending?

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[Editor’s note: This is a guest post  from LendingRobot. LendingRobot is an associate sponsor and will be in attendance at LendIt USA 2015 on April 13-15. In this post and attached white paper, they discuss how much you should invest in marketplace lending.]

We are all convinced that Peer Lending brings fantastic investment opportunities. The volatility is surprisingly low, thanks to large-scale diversification, and the returns are excellent considering the risks. Yet, no investors are optimistic enough to put 100% of their money in it. Which raises the question ‘how much should it be?’. When facing that question from our clients, so far we stuck with the usual investment advisor answer: ‘it depends’. Which sounds smart, but is not very helpful.

Some industry pundits gave ballpark estimates (10%? 30%?), but they are, at best, educated guesses. It’s time to tackle the question seriously, and use an objective method. In this paper, we use the Modern Portfolio Theory to determine how much of people’s assets should they put in Peer Lending…

Download the white paper: How much should you invest in Marketplace Lending?