I'm wondering how p2p lending factors into taxable accounts. They do offer diversification outside of normal bond etfs. Are they appropriate in rounding out a diversified portfolio, or should a taxable account stick to tax-free municipal bonds? If they do have a place in the portfolio, what percentage of the bond portion should they make up?

Region - USA

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    I think this comes down to opinion. The reports I've heard suggest that as investments they're quextionable, but as microlending charities the better ones designed for that purpose have some value. Your milage will vary -- and vary continuously as the borrowingpopulation changes. I'd call these speculation rather than investing; if you do go in, do so at a level you can afford to lose... but I'm sure others feel differently, and I don't think there's any clear consensus yet.
    – keshlam
    Feb 5, 2016 at 1:03
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    Tax questions should have a country tag. Feb 5, 2016 at 2:09
  • As a side note, tax-free muni bonds generally make sense in the long run only for those with the highest tax exposure. schwab.com/public/schwab/nn/articles/…
    – rhaskett
    Mar 6, 2016 at 10:27

1 Answer 1


I certainly don't "stick to tax-free municipal bonds" in my taxable investments. If investment performance is good, I can afford to pay some tax on the income. Such bonds may have a place in the portfolio, but I wouldn't build a portfolio only out of them and there are some risk/return decisions needed even within that category.

As far as peer-to-peer lending goes... I know that I don't know, but I haven't heard anything particularly interesting about it as an investment, and it's inherently hard to predict risk/return for. There are some interesting charities based on that model, but that's a different kettle of worms.

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