Saturday, August 20, 2011

Strategy Change After One Month

I think I've mentioned that I require a minimum of 16% APY on my investments. So after the first month I'm getting 24% to 46% return, why would I change? My other priority, time.

I'd like to spend less than 30 minutes a week with account maintenance. I was selling more than three notes a week, which didn't take much time to turn around and buy a new note, but I'd like to spend less time churning notes.

Ideally I'd sell one, maybe two, notes a week. That way I don't feel like I've got a lot of money "sitting on the couch" waiting until I refresh to sell orders.

So to compensate, each week I increase my target APY for my sale price calculation. Currently it's at 18% instead of 16%. Remember that is the minimum annualized gain if the note sells seven days after I put the sell order in, so the gain will be higher.

Basically I feel I am pricing my notes too low so they are selling too fast. I need to create less demand for them by increasing the price, which will allow me to spend less time managing my account. It also has the side benefit of higher return per sale.

So now my strategy is this:

1. Buy high return, high risk notes within the first year of being issued.
2. The riskiest of my notes get offered for sales for whatever rate (currently 18% APY) sells less than 10% of my notes per week.
3. As money accumulates in my account (payments, interest, sales proceeds) look to buy notes. For small amounts I'm not so picky about the risk/interest rate.

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