When I first invested, I decided to use a pre-determined filter that Brian provided me with.  I have both a starter portfolio which includes these notes and a riskier portfolio so I can compare the results over time.  I enjoyed combing through the notes and deciding who I would lend $25 to mainly because I think it’s interesting to peer into someone else’s financial life.  I don’t think hand picking each note is necessary to make money in LendingClub.  However, I highly recommend only putting the minimum $25 investment per note.  It spreads out your risk in your LendingClub investments.  I look at it as having a diversified portfolio, much like one should do in the stock market.  All note grades default and putting all of your eggs in one basket is not a good strategy.

A look at my two highest grade loans (D2 18.49%) show average investments per person of ~$40 and ~$60.  I’ve seen many of my loans with over $100 invested per person.  I have started to read about hedge funds getting in on the action.  My thought (and hope) is that this is why I am seeing the high average investments.  There are only so many notes to be invested in which forces them to invest more money per loan.  If hedge funds start investing more into LendingClub it will be less and less about ‘peer-to-peer’ lending.  In my opinion it changes the whole idea of what the peer-to-peer lending and crowd funding sites like Kickstarter are all about.  Time will tell if institutional investors will have any effect on LendingClub, but in the meantime - please invest the minimum amount into loans unless you really know something I don’t.