Author Topic: Checking In: What's your Lending Club return?  (Read 10475 times)

chasesfish

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Checking In: What's your Lending Club return?
« on: March 26, 2016, 05:39:52 AM »
I'm coming up on my five year anniversary with Lending Club and wanted to see what everyone else was experiencing for returns. 

I'm at 7.15% on an Adjusted Net Annualized Return on just over 2100 notes.

What is everyone else seeing?  Any tips on your investment strategy because I seem to be failing on that front.

Thank you for your help,


MustacheAndaHalf

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Re: Checking In: What's your Lending Club return?
« Reply #1 on: March 26, 2016, 08:03:34 AM »
Are you quoting their number, or one you calculated?

When I was more active at Lending Club, buying notes on the secondary market revealed a strange flaw in their returns formula.  When I bought a note for 10% of it's face value (because it was going to default - bad idea), Lending Club assumed I had lost 100% of the face value ($25 vs $3).  My returns rapidly dropped and went negative, when in fact I had enough income from notes to pay for all of these purchases without contributing more.  Hopefully that's an isolated problem, but it made me question the percentage they display.

FireLane

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Re: Checking In: What's your Lending Club return?
« Reply #2 on: March 26, 2016, 08:39:28 AM »
I've been a member since 2012. I have 1383 total notes in my account, 328 of which are fully paid off, 31 are defaulted. My return is at 7.01%, 6.68% adjusted.

I was picking notes manually in the early days and chose a lot of lower-interest, safer ones. That was probably a bad idea. I've set up my automated investing to aim for a higher rate of return now, so I expect that number to rise.

signhere

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Re: Checking In: What's your Lending Club return?
« Reply #3 on: March 26, 2016, 09:16:05 AM »
10.42 adjusted for 110 notes. Started about 2.5 yes ago. Spent a lot of time on nickelsteamroller back testing filters.

Matumba

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Re: Checking In: What's your Lending Club return?
« Reply #4 on: March 26, 2016, 09:16:17 AM »
Following

slipslop

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Re: Checking In: What's your Lending Club return?
« Reply #5 on: March 26, 2016, 09:25:25 AM »
I've got an adjusted NAR of 9.85%--that's with all loans that past-due loans estimated to be 100% loss. My NAR the way Lending Club would calculate it is 11.7%

I invest in D, E, F and G loans through automated investing, and my average age of portfolio notes is 27 months and 1,700 notes. I've been investing in both Lending Club and Prosper since near their beginnings. (And have a -5% loss on Prosper notes between 2005-2008 to show for it.)

Grout

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Re: Checking In: What's your Lending Club return?
« Reply #6 on: March 26, 2016, 10:41:52 AM »
Does LendingClub actually verify that lenders make their stated minimum of $75,000 income in order to begin as a lender?  I would like to invest in some loans here but I do not yet meet that income requirement.

kudy

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Re: Checking In: What's your Lending Club return?
« Reply #7 on: March 26, 2016, 10:51:10 AM »
Does LendingClub actually verify that lenders make their stated minimum of $75,000 income in order to begin as a lender?  I would like to invest in some loans here but I do not yet meet that income requirement.

They do not (at least, they didn't when I signed up a number of years ago).

I haven't put any new money into it for a few years, but I've reinvested anything that shows up as cash. I've picked all my notes manually.

My stats are an "Adjusted Net Annualized Return" of 9.70% with a total of 155 notes (83 current, 3 grace period, 53 paid, 2 late, 14 charged off).

chasesfish

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Re: Checking In: What's your Lending Club return?
« Reply #8 on: March 26, 2016, 11:49:30 AM »
I'm quoting the number Lending Club is using - Been a rough past two months, losses almost equaled interest for the first two months of 2016.  I went fully automated investing and think I need to take more risk.  I also invested a lot in 36 month notes early on.

Will have to look at whatever nicklesteamroller is

chasesfish

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Re: Checking In: What's your Lending Club return?
« Reply #9 on: March 26, 2016, 12:05:39 PM »
NSR was interesting at a portfolio of 2200 notes...

E, D, and C notes are the only ones performing above average.  Was fairly diversified.  Adjusting some filters

Kwill

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Re: Checking In: What's your Lending Club return?
« Reply #10 on: March 26, 2016, 12:57:05 PM »
I've been on LendingClub as a little experiment for almost 2 years now. The site says my interest rate is 11.47%, but from what other people here are saying, maybe that's iffy. I just put in about $250 or so total, and I transfer money back to my bank account pretty soon after it is credited. I've been on the fence about whether or not to add money to this and keep going with it or just let it run its course and close to simplify my life and not be involved in money-lending. But it seems to be doing pretty well.

I picked out about 13 notes on the secondary market that were a little discounted but that sounded like they were for responsible people (mostly B grade ones). Two of them got paid back early, so I lost a little interest there. Only one went into a grace period, and it came back soon. I tried buying one heavily discounted late note, but I chickened out and sold it again at a loss on the secondary market.

Interest Compound

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Re: Checking In: What's your Lending Club return?
« Reply #11 on: March 26, 2016, 01:03:12 PM »
Looks like 7-10% during good years. Does anyone have any statistics on how many more people default on personal loans during a typical economic recession?

FrontRanger

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Re: Checking In: What's your Lending Club return?
« Reply #12 on: March 26, 2016, 02:09:52 PM »
I've been a member since  2010 wiith 3300 notes invested. I'm at 6.99% rate of return based on changing their settings to account for every late loan as a complete write-up. I haven't been impressed with the returns and am letting my account run off. That level of return isn't worth the hassle.

pdxvandal

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Re: Checking In: What's your Lending Club return?
« Reply #13 on: March 26, 2016, 03:26:30 PM »
I've had a 7.1% net annualized return. I joined in 2008 and letting the few thousand I have in there run its course in the next 2 years.

Abe

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Re: Checking In: What's your Lending Club return?
« Reply #14 on: March 26, 2016, 04:06:14 PM »
Got 8.4% return after adjustments, but the projected returns on the acceptable B notes (i.e. not the $14000 vacation!!! loans for someone who makes $4k a month) are only 4-5% now. I agree it's not worth the hassle at this point.

Jim2001

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Re: Checking In: What's your Lending Club return?
« Reply #15 on: March 26, 2016, 07:03:24 PM »
6.9% on 334 notes.  Been in since 2012.  Manually selected and shooting for higher credit borrowers.  Got burned the one time I bought secondary notes.  Add money about once a year.  Often can't find enough notes with the criteria I like, so I'm always sitting on a bit of cash in the account.


mrpercentage

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Re: Checking In: What's your Lending Club return?
« Reply #16 on: March 26, 2016, 07:30:43 PM »
I have thought about lending club as an alternative to bonds. Im not a big fan of bonds. The returns seem pretty stellar. Did you have a good over all experience and do you recommend it?

rickhuizinga

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Re: Checking In: What's your Lending Club return?
« Reply #17 on: March 27, 2016, 12:39:51 AM »
I've been on Lending Club for a year with 533 notes.  Lending Club's reported Adjusted Net Annualized Return (ANAR) is 14.38%, however my real return (computed using the XIRR spreadsheet function) is 10.98%.

One of the main reasons for the difference is that I had some cash that was uninvested for a few months, however Lending Club's computed return seems to be over-reporting the real return.

Sent from my Pixel C using Tapatalk


chasesfish

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Re: Checking In: What's your Lending Club return?
« Reply #18 on: March 27, 2016, 07:53:13 AM »
6.9% on 334 notes.  Been in since 2012.  Manually selected and shooting for higher credit borrowers.  Got burned the one time I bought secondary notes.  Add money about once a year.  Often can't find enough notes with the criteria I like, so I'm always sitting on a bit of cash in the account.

Here are some additional thoughts regarding my lending club experience:  I lost my rear on the "purchased" loans.  That was the end of that.  I'm assuming some of the institutional buyers have robo screens that analyze potential defaults and list the notes.  We would just be the lambs coming in for slaughter. 

The tax "hassle" got better this year.  5th year filing the returns plus their reporting improves.  That's less of an issue. 

I think MMM's returns are overstated because its still a young portfolio, not mature portfolio.  A note is generally less likely to default really early into a loan and really late into a loan.  If you keep adding to a portfolio, your average age of loan is shorter.  My returns dropped from the 10% range to the 7's as soon as the average duration in the portfolio leveled off.

As to add/withdraw, that's my constant question.  When the market was near its top back in Q4, I was adding to Lending Club.  My favorite companies were paying 2-3% dividend yields with the possibility of some short-term loss based on the market runup.  In January, I was buying as much as I could when these companies fell 10-20% in price.   That's realistically my alternate investment, higher yielding, stable companies and I think 50% of the yield compared to Lending Club is my breakpoint:   Better tax treatment, dividend that generally goes up each year, and some capital appreciation potential in exchange for a lower cash return today.

Now the market has run back up and I'm here chunking a little more into Lending Club - For me I'm at the point of viewing it as an extension of my taxable account.

The NSR portfolio analytics were interesting to me, I will only buy C,D,E notes based on my experience.  Lost too much money relative to return on the others

Roots&Wings

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Re: Checking In: What's your Lending Club return?
« Reply #19 on: March 27, 2016, 09:29:27 AM »
Since 2012 when I put in $2k as test trial.
Adjusted NAR: 5.86%

A and B notes that I picked, and clearly have no knack. I've been withdrawing funds as notes are repaid since last year because of the relatively poor returns. Glad others are doing better!

Stache-O-Lantern

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Re: Checking In: What's your Lending Club return?
« Reply #20 on: March 27, 2016, 12:24:58 PM »
I've been in LC since August 2013 (so about 2.5 yrs), with just a tiny % of my taxable account allocated to it.  So i only have 130 active notes (62 paid off).  LC says my combined NAR is 13.5%, but i calculate my return at about 12.8% with Excel's XIRR function.  I'm pretty active on the secondary market.  I sell notes before they default, haven't held one until default yet.  I usually sell when they are in grace period.  I also buy on the secondary market.  I did a fair amount of screening/backtesting on nickel steamroller prior to investing, and still update the filters i use once or twice a year.  For me, it's a fun hobby that i can spend a lot or a little time on at my pleasure.  And so far the returns have been good.

Jim2001

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Re: Checking In: What's your Lending Club return?
« Reply #21 on: March 27, 2016, 02:14:44 PM »
I have thought about lending club as an alternative to bonds. Im not a big fan of bonds. The returns seem pretty stellar. Did you have a good over all experience and do you recommend it?

I'm not using automated features, so it's pretty labor intensive.  Like I said, since I'm shooting for high credit borrowers and usually have trouble just staying fully invested and always have cash on the sidelines.   Maybe I could solve that with automation - Just haven't gotten around to it.  It's a very small portion of my stash.

FIPurpose

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Re: Checking In: What's your Lending Club return?
« Reply #22 on: March 27, 2016, 04:42:17 PM »
I've only been using lending club for about 3 months and I went with riskier loans. My current adjusted return is about 4%. I can't say I'm greatly pleased. I feel like I took on this big risk and bother to diversify, but I don't see this being worth my time going forward. 4% is good for a bond, but this investment isn't equivalent to a bond and in a bad job market turn I could easily see dipping into negative returns since there's nothing backing the investment.

chaskavitch

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Re: Checking In: What's your Lending Club return?
« Reply #23 on: March 28, 2016, 08:29:11 AM »
I've been in Lending Club for just over 2 years.  My risk allocation is skewed away from A and B notes, but I don't remember the exact distribution.  We started off around 11% returns, but in the last 6 months it has dropped to 7.39% for the Adjusted Net Annualized Return.  Our weighted average rate is 16.33%.  There have been at least 6 notes in the last 6 months where the originator has filed for bankruptcy - the account is at 125 active loans, 8 charged off, 2 in default, 3 late 30-120 days, and 20 fully paid off.

It blows my mind what happens to some people.  One of the originators who filed for bankruptcy listed his job title as President/CEO with a gross monthly income of $20,000.  He is using 99.4% of his $282,791 of revolving credit, and made it through 6 months of payments to LC before he filed for bankruptcy and couldn't pay off his $25,000 lending club loan. 
« Last Edit: March 28, 2016, 08:31:36 AM by chaskavitch »

JZinCO

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Re: Checking In: What's your Lending Club return?
« Reply #24 on: March 28, 2016, 12:34:02 PM »
I have about 150 notes and am about a year in with half my notes purchased from original issues and the other half secondary. My LC returns say 5.6% (I fixed all late notes to 100% loss), though my current XIRR, NSR and Lending Robots are all in the 10-10.5% range. Probably just bad luck but I've had a spate of late notes and I don't forsee any of them coming back.
Given that it is totally automated through LendingRobot, I don't mind letting it keep chugging along but I'm not throwing more money at it either. I'm okay with crowdfunding but decided to slowly diversify across platforms.

FLBiker

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Re: Checking In: What's your Lending Club return?
« Reply #25 on: March 28, 2016, 02:00:55 PM »
Adjusted NAR ~8.5%.  I think I started in 2012.  267 current notes.

rockinray

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Re: Checking In: What's your Lending Club return?
« Reply #26 on: March 28, 2016, 02:05:40 PM »
I have about 150 notes and am about a year in with half my notes purchased from original issues and the other half secondary. My LC returns say 5.6% (I fixed all late notes to 100% loss), though my current XIRR, NSR and Lending Robots are all in the 10-10.5% range. Probably just bad luck but I've had a spate of late notes and I don't forsee any of them coming back.
Given that it is totally automated through LendingRobot, I don't mind letting it keep chugging along but I'm not throwing more money at it either. I'm okay with crowdfunding but decided to slowly diversify across platforms.

I'm curios. Since you invest via Lending Robot, what are you setting for an expected return on the "slider" bar?

I use LR for my Prosper account and have it set for 9%. Currently I'm at 8.58%. 130 notes.

I've used LC in the past (sorry to take this off topic).

Saving in Austin

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Re: Checking In: What's your Lending Club return?
« Reply #27 on: March 28, 2016, 03:24:22 PM »
Adjusted Net Annualized Return 8.65%
238 Traded Notes

I've been cashing out $100 at a time over the past year or so.

It doesn't feel like it's worth the time I've put in it.

Then again, I only invested $3,500.

I just didn't want to keep on the path when I read that they were selling their best notes to big banks and leaving the scraps for everybody else.

JZinCO

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Re: Checking In: What's your Lending Club return?
« Reply #28 on: March 28, 2016, 04:31:43 PM »
I have about 150 notes and am about a year in with half my notes purchased from original issues and the other half secondary. My LC returns say 5.6% (I fixed all late notes to 100% loss), though my current XIRR, NSR and Lending Robots are all in the 10-10.5% range. Probably just bad luck but I've had a spate of late notes and I don't forsee any of them coming back.
Given that it is totally automated through LendingRobot, I don't mind letting it keep chugging along but I'm not throwing more money at it either. I'm okay with crowdfunding but decided to slowly diversify across platforms.

I'm curios. Since you invest via Lending Robot, what are you setting for an expected return on the "slider" bar?

I use LR for my Prosper account and have it set for 9%. Currently I'm at 8.58%. 130 notes.

I've used LC in the past (sorry to take this off topic).
I've only just recently stopped using a custom filter and switched to LR's algorithm so I don't have any good data

randymarsh

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Re: Checking In: What's your Lending Club return?
« Reply #29 on: March 28, 2016, 07:47:07 PM »
Don't want to derail the thread too much, but what happens when a loan is in default or charged off? Does LC bother with a lawsuit and wage garnishment?

Abe

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Re: Checking In: What's your Lending Club return?
« Reply #30 on: March 28, 2016, 08:11:18 PM »
They send it off to a collections agency tha usually fails to collect, as far as my experience has been.

chasesfish

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Re: Checking In: What's your Lending Club return?
« Reply #31 on: March 29, 2016, 04:50:19 AM »
Yes, collection agency.  The biggest benefit i see to winding down my account is there will still probably be money trickle in each month

Monkey Uncle

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Re: Checking In: What's your Lending Club return?
« Reply #32 on: April 01, 2016, 04:15:46 AM »
I have thought about lending club as an alternative to bonds. Im not a big fan of bonds. The returns seem pretty stellar. Did you have a good over all experience and do you recommend it?

I'm not doing Lending Tree, but from what I can see in this thread, it looks like people are taking a good bit of credit risk to get the higher returns.  So basically the loans are functioning like junk bonds, albeit junk bonds issued by individuals instead of companies.

retiringearly

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Re: Checking In: What's your Lending Club return?
« Reply #33 on: April 01, 2016, 11:09:41 AM »
Dumb question - I do not have an account with Lending Club.  Is there no collateral pledged against the loans?  Meaning, if a borrower defaults, the really is no negative repercussion for the borrower other than possibly a hit to their credit report?

Thanks in advance, I appreciate it.

JZinCO

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Re: Checking In: What's your Lending Club return?
« Reply #34 on: April 01, 2016, 11:12:35 AM »
Dumb question - I do not have an account with Lending Club.  Is there no collateral pledged against the loans?  Meaning, if a borrower defaults, the really is no negative repercussion for the borrower other than possibly a hit to their credit report?

Thanks in advance, I appreciate it.

https://www.lendingclub.com/public/collections-process.action See this for more detail.

I just had my first borrower go into bankruptcy. Wee!

beltim

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Re: Checking In: What's your Lending Club return?
« Reply #35 on: April 01, 2016, 11:25:43 AM »
I'm running at an annualized return of 2.1% since they started in 2007.  Large negative returns in 2009 and 2010 made me drastically reduce my exposure.  They've since adjusted the interest they charge, but that first year or two they dramatically underestimated the risk of their borrowers.

It's absolutely right to think about these as junk bonds.

CheapskateWife

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Re: Checking In: What's your Lending Club return?
« Reply #36 on: April 01, 2016, 11:38:05 AM »
I had a borrower die (so they claim).   My charge-offs have been fast and furious, and frustrating!  I mean seriously, wasn't this supposed to be like Uber and AirBNB where its an internet community and we take care of eachother, blah, blah.   To me its very different to default on a peer loan than on a bank loan...with a bank; you are sticking it to big bad wallstreet.  Default on LC and you are hurting a real family, dammit!

My Net APR is 2.32% and I only started about 9 months ago.   Frankly, I'm disappointed in the returns but am going to keep on rolling to see how it goes. 

retiringearly

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Re: Checking In: What's your Lending Club return?
« Reply #37 on: April 01, 2016, 01:28:25 PM »
Dumb question - I do not have an account with Lending Club.  Is there no collateral pledged against the loans?  Meaning, if a borrower defaults, the really is no negative repercussion for the borrower other than possibly a hit to their credit report?

Thanks in advance, I appreciate it.

https://www.lendingclub.com/public/collections-process.action See this for more detail.

I just had my first borrower go into bankruptcy. Wee!
Thanks, I appreciate it.  After reading that I suspect I will take a pass on Lending Club.

RedBaron3

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Re: Checking In: What's your Lending Club return?
« Reply #38 on: April 01, 2016, 01:32:10 PM »
NAR of 5.28% since 2011.  I grew tired of LC and have been transferring out earnings and should be cashed out and closed by August. 

chasesfish

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Re: Checking In: What's your Lending Club return?
« Reply #39 on: April 02, 2016, 06:02:38 AM »
Dumb question - I do not have an account with Lending Club.  Is there no collateral pledged against the loans?  Meaning, if a borrower defaults, the really is no negative repercussion for the borrower other than possibly a hit to their credit report?

Thanks in advance, I appreciate it.

https://www.lendingclub.com/public/collections-process.action See this for more detail.

I just had my first borrower go into bankruptcy. Wee!
Thanks, I appreciate it.  After reading that I suspect I will take a pass on Lending Club.

Welcome to the club - I have 220 charged off notes as of this morning.  Some people will default

AM43

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Re: Checking In: What's your Lending Club return?
« Reply #40 on: April 04, 2016, 11:07:09 AM »
I've been investing with LC since 2009.
Started off by investing small sum in A and B notes, but changed that strategy.
Now I only invest in C-F notes. Much higher risk, but better returns.
Out of 850 notes 57 in default.
NAR 9.8%, Adjusted NAR 8.5%.
Most of my notes are hand picked, but I do have automated investing set up.
All and all I am happy with returns.

Fudge102

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Re: Checking In: What's your Lending Club return?
« Reply #41 on: April 06, 2016, 03:14:05 PM »
I guess we'll see how mine shapes up in the future.  I've only been on for about two months now after reading some of the articles here at MMM.  I can't complain so far.  ~16% return but it's still early.  I've only had three loans go into the grace period but only one still remains.  And that's with some 850 notes issued.  It's treating me better than the stock market right now is all I can say.  Mine's all automated on the slightly riskier side, pretty much a copy of the article.

jamesvt

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Re: Checking In: What's your Lending Club return?
« Reply #42 on: April 06, 2016, 03:26:58 PM »
About 16.5%, but my oldest loans are only from December. I figure my return will start to go down over time since all the charts I've seen show as the average note age in a portfolio increases the average account return decreases.