NEW Loyal 3 Account !!

Now that larger investors like banks and investing companies are investing in peer-to-peer (P2P) lending, it appears to be losing its luster among us small time investors.  Like everything else in this world, money talks.  Because larger investors can throw huge chunks at P2P notes, my guess is that they are given priority over the smaller investors.  When we first started investing in P2P over 2 years ago, granted there weren't as many notes, it seemed easier to find notes that met our investing criteria.  In both Prosper and Lending Club, it has been our recent experience that good quality notes are now harder to find these days!!

Investing in P2P notes was a way we were diversifying our money.  Rather than put everything in the market, we found some peace knowing that our money was placed in different pots.  Although we still have roughly $18K total investing in P2P notes, we are looking to slowly move some of that money out of the P2P accounts (Prosper and Lending Club) since we feel that too much of our money remains idle each month and not working for us. After looking around, we have decided to open a Loyal3 account and slowly funnel idle cash from our P2P accounts to build a portfolio in Loyal3.

Loyal3 Account Snapshot:

To get our feet wet, we recently invested $100 into three companies (FTR, DIS, WMT).  Also, since we were investing $25 to purchase P2P notes, we decided to keep things familiar and invest in increments of $25.  Below is a quick snapshot of our account.  As you can see, we are up 2.08%. Yay!! 

About Loyal3:

Launched in 2013, Loyal3 provides an entirely new model of investing.While the site doesn’t cater to experienced traders with sophisticated tools and expert advice, it does hope to make the stock market accessible to the general public via an easy-to-use platform. With Loyal3, all trades are completely free – no commissions, no fees. All customers are automatically enrolled in its DRIP program.

• Loyal3’s corporate partners agree to use it as a go-between for direct-purchase to individual investors. In exchange, these companies pay all transaction fees and pass extra on to Loyal3 for each investor they sign up. Though most companies have had direct-purchase options for years, Loyal3 allows investors to put as little as $10 into whole or fractional shares of stock, or as little as $100 in an IPO. For stock IPOs, you do need a minimum $350 account balance.

Drawbacks

Because it needs to have an agreement with each company, its offerings are limited. At this time, Loyal 3 offers only stocks, no mutual funds, bonds, etc. This obviously makes it harder for investors to create a truly diversified portfolio. And while the platform (just pick from a page’s worth of brand logos, select your investment amount, and confirm) is incredibly easy, the site offers a limited set of educational content. One still needs to rely on another site to fully research a particular stock. No advance purchasing options like limit orders, options, etc.  

• Active, experience investors are generally less interested in Loyal3, but they are not the target market.  Then again, inexperienced investors could benefit from the educational resources and broker access offered by other sites. All things considered, we still think Loyal3 might still be a good, temporary introduction to the stock market, before moving on to a more traditional broker.  Or in our case, to invest small amounts of money into the market, and avoid paying a commission, which would otherwise have a significant impact on the cost basis. 

Quick Facts:

• Minimum initial deposit: $0
• Stock Trades: $0
• You can place a one-time order or schedule monthly investments.
• You can buy factional shares.
• Currently, you can invest a maximum of $20,000 per stock, per month with a $10,000 maximum per transaction.
• Must sign up with a valid bank account, investing through credit card no longer permitted.
• Mobile access (Apple iOS support for iPhone and iPad. Android is currently planned for in the future).
• No Check Writing or Debit Card.
• No advance purchase options.
• No broker-assisted orders.
• Loyal3 does not have physical locations or provide advice. This is a trading account for those who want to make their own investment decisions.
• Obviously, since you are purchasing stocks there’s no guaranteed return and your investments are NOT FDIC insured.

Do you use Loyal3? Please share your opinions in the comments section.