P2P Investing 101, by Stu Lustman of P2PLendingExpert.com, suggests that investors should be diversifying into “alternative assets,” particularly peer-to-peer aka marketplace lending. The book is aimed at both beginners and more experienced investors who may not have explored this asset class before.
P2P Investing 101’s greatest strength is its accessibility and the sheer amount of useful information Lustman provides. The book begins with a concise but detailed introduction to the most common asset classes in the investing world, which ensures that even novice investors can easily understand the following chapters, which have their own specific focuses.
Lustman lucidly explains traditional investments such as stocks, bonds, and funds, moving on quickly to what he calls “alternative assets” such as gold and non-US dollar currencies. He pays special attention to bonds and their pitfalls, using the GM bailout (when GM bondholders were “royally screwed,” according to Lustman) as evidence of the outsized risk of bonds in relation to their reward.
The solution, supported by the different risk profiles Lustman explains are inherent to each type of investment, is that every investor should seek a diversified portfolio containing both traditional and alternative assets. His bread and butter, of course, is peer-to-peer investments, and he feels that they should take the place of bonds in your portfolio.
The forecast for P2P lending in 2018 is good, going by 2017 results. Using economic projections from the Wall Street Journal and other sources, Lustman demonstrates that peer-to-peer lending can be a good counter to the expected volatility of financial markets in the near future. In fact, nearly every chapter of the book is laced with graphs and data to support Lustman’s conclusions.
An interesting and useful chapter is Chapter 6, about Regulation A+ (equity crowdfunding). RegA+ opens up investment opportunities to non-accredited investors (which Lustman is, according to himself). Lustman focuses on RegA+ and real estate investing, covering four real estate platforms utilizing RegA+ to offer what Lustman considers P2P investments.
RealtyMogul, Fundrise, Groundfloor, and American Homeowner Preservation (my company) are all compared, along with a single non-real estate-related platform, Streetshares. Lustman even provides a useful chart summarizing these RegA+ offerings so that interested investors can evaluate them side-by-side.
It’s things like this which give P2P Investing 101 its greatest strength: it is simple, pays close attention to detail, and truly earns its “101” title by providing useful information for investors of all levels to make informed decisions.
Finally, Lustman discusses what he calls “the two most important” P2P lending platforms, Lending Club and Prosper. Lustman invests his money on both of these platforms, and believes his readers should as well. He compares the two like he did with the RegA+ platforms, detailing the benefits and risks of both. He even reprises the chart from the RegA+ chapter, with Prosper and Lending Club added in.
It’s clear that Lustman doesn’t like or trust bonds, and prioritizes his P2P investments (including RegA+) over them. Whether that strategy is sound for every single investor out there is debatable, but Lustman certainly offers a strong case, full of information and supported with relevant data. P2P Investing 101 is a quick and easy read, providing novel perspectives and insights any investor on the market could find valuable.