Key Points
- My net investable assets increased to $1,337,555.
- The IRR for trailing 12 months (TTM) decreased to 8.05%.
- I have optimistic forecast for future returns.
Asset Allocation
Net Investable Assets: $1,337,555
| Account | 2018Q4 | 2019Q4 | Change |
|---|---|---|---|
| Cash and Cash Equivalents | $39,000 | $168,625 | $129,625 |
| Brokerage | $132,099 | $94,347 | ($37,752) |
| LendingClub | $13,139 | $241 | ($12,898) |
| Groundfloor | $26,836 | $0 | ($26,836) |
| LexShares | $799,409 | $814,742 | $15,333 |
| YieldStreet | $504,065 | $319,448 | ($184,617) |
| Debt | ($390,501) | ($59,847) | $330,654 |
| Total | $1,124,048 | $1,337,555 | $213,507 |
The increase was $213,507 which was much less than expected. I was a bit too optimistic about returns on my investments. The good news is that all IRA transfers have been completed early in the year. My IRA accounts with STRATA Trust Company and IRA Services Trust Company have finally been closed. I no longer have to struggle to maintain multiple retirement accounts.
Internal Rate of Return (IRR): 8.05%
| Account | Allocation | IRR (TTM) | IRR (TOT) |
|---|---|---|---|
| LendingClub | 0.02% | 55.52% | 5.14% |
| Direct Lending Income Fund | 0% | n/a | 10.03% |
| Groundfloor | 0% | 30.05% | 3.58% |
| iFunding | 0% | n/a | 15.36% |
| LexShares | 71.82% | 4.99% | 6.95% |
| YieldStreet | 28.16% | 14.15% | 13.74% |
| Total | 100% | 8.05% | 9.21% |
LexShares was a major performance dragger because the vast majority of my assets was invested in this platform. Most commercial disputes typically resolve in 1-3 years. I hope I will see more distributions in the coming year and my investment returns naturally catch up.
Investment Strategy 2020
I will continue investing in single-case deals via the LexShares platform. Investing in litigation funding has been very profitable in recent years. LexShares estimates the win rate of each case to be at least 70%, which translates into the 37% annualized return. There’s just no way to lose money.
Litigation Finance Overweight
I will stick to my investing strategy no matter what and maintain a concentrated portfolio consisting of litigation finance assets. I still feel good about the upside potential on my remaining cases since the MOIC improves as they age. Hopefully it will come out of the J-curve soon.
Leverage
My credit card debt will be fully paid off in the coming months. I no longer take out personal loans or credit card balance transfers aggressively after my credit is restored. Leverage will be used to cover only emergency expenses such as major medical bills or large capital calls.