Even Staff

2016-02-11

Ditch the Stocks, Earn Better Returns as a Marketplace Lender

The stock market has historically been hard to beat when it comes to long-term returns. However, there are several reasons why the growing world of alternative lending could be better for long-term investors than the stock market at current levels.

 

What Is Alternative Lending?

 

Traditionally, the best way for lenders to gain returns on their cash in fixed income has been to “lend” it to banks or other financial institutions by investing in CDs or other fixed income investments. However, the new trend toward online lending allows lenders to lend directly to borrowers by browsing online databases and hand-picking preferred borrowers. Rates, terms and risk levels are all determined without the involvement of a traditional bank, and loans are made directly through an online lending platform.

 

What To Expect From The Stock Market

 

For decades, investing in the S&P 500 has been one of the best sources of long-term returns. In fact, since 1928, the S&P 500 has returned an average annual yield of 11.5 percent. While it’s true that this type of return is hard to beat historically, the current market environment is far from typical. Following a huge, six-year post-Financial Crisis bull market, the S&P 500 is up about 200 percent since March 2009 and is currently more than 25 percent higher than its pre-crisis all-time highs. There are very few valuation metrics that indicate that the S&P 500 remains undervalued at this point. The index’s price to earnings ratio (PE) is currently 20.0, well above its historical mean of 15.5. Even though the S&P 500’s current 12-month forward PE of 17.4 is slightly lower, it’s still hard to argue that the market is currently undervalued.

 

A Lost Decade?

 

John Bogle, founder and former CEO of The Vanguard Group, said earlier this year that he sees very little upside for traditional investors over the next decade. He projects 2-3 percent bond yields and about 4 percent overall returns from the stock market over the next 10 years. “When you factor in the costs associated with index funds, inflation and taxes, you are actually looking at real returns of nominal to zero,” Bogle explained. If Bogle’s projections are correct, “nominal to zero” is a far cry from 11.5 percent annual returns, and stock and bond investors could currently be staring down the barrel of a lost decade.

 

The Alternative

 

According to the latest numbers from Lending Club, an alternative lender, the average two-year aged portfolio is currently yielding average returns of between 6.2 percent and 8.7 percent. Depending on risk tolerance, even higher rates of return are available for lenders. While there is certainly always risk of borrower default, these types of returns are less volatile than stock market returns. For example, the S&P 500 recently dropped 11 percent in less than a week, eliminating more than a year of gains in a matter of days. Investors that have chosen quality borrowers can sleep much easier at night than stock market traders, who live in constant fear that one bad economic headline could wipe out years of progress overnight.

 

Creative Solution

 

At many times throughout history, the stock market has been the best place to go for large returns on investment. Unfortunately, it appears as if the next decade may not be one of those times. If you are looking for a creative solution to a potentially stagnant stock market, want access to higher returns than you can get from a bank and understand the risks involved, you should consider dipping your toes into the world of alternative finance.  

Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content

Proven Scale & Trust

$525B+

in consumer applications for financial services

100M+

consumer profiles generated

6.5 Million+

applicants routed monthly

What our partners are saying

"... generating some of the highest approval rates and conversion rates among our online acquisition partners. The transparency and focus on data have allowed us to drive consistent growth and success each month. "

"Even enabled MoneyLion to... streamline our user experience, serve a broader set of our customers, and improve key monetization metrics... driving 4x+ growth since launch."

"... a streamlined consumer experience, helping millennials with no collateral, budget, or saved money. Even’s impressive matching algorithms simplify the process of finding the best personal loans to meet your needs."

"... a truly modern and easy to use platform for the financial services marketing world. They make it easy to develop consumer friendly, innovative products in a space dominated by legacy platforms."

"... generating some of the highest approval rates and conversion rates among our online acquisition partners. The transparency and focus on data have allowed us to drive consistent growth and success each month. "

"Even enabled MoneyLion to... streamline our user experience, serve a broader set of our customers, and improve key monetization metrics... driving 4x+ growth since launch."

"... a streamlined consumer experience, helping millennials with no collateral, budget, or saved money. Even’s impressive matching algorithms simplify the process of finding the best personal loans to meet your needs."

"... a truly modern and easy to use platform for the financial services marketing world. They make it easy to develop consumer friendly, innovative products in a space dominated by legacy platforms."

Mike Doniger
Head of Business Development and Partnerships

Awards

Press

Read all about it!

Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
EVEN
Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
New York, New York – June 2, 2021 – Even Financial (“Even”), the leading search, comparison, and recommendation engine for financial services, has announced a new partnership with Figure to launch the company’s personal loan products on the Even platform. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services acquisition by seamlessly bridging financial institutions and channel partners via its industry-leading API and embeddable solutions.   Figure is a fintech company that leverages AI, blockchain, and analytics to deliver innovative consumer financial products with speed and ease. Figure has dramatically decreased the time it takes for consumers to secure loans and has significantly reduced the costs associated with loan origination, servicing, financing, and capital markets execution. The company was founded in 2018 to unlock new access points for consumer credit products that can transform the financial lives of its customers. In addition to personal loans, it provides mortgage refinancing and home equity release solutions, including home equity lines of credit, home improvement loans, and home buy-lease back offerings for retirement.   Figure is an exciting, advanced provider that is driving transformational change in consumer credit,” said Phill Rosen, Founder and CEO of Even Financial. “We’re thrilled to welcome them to Even’s unparalleled network of loan products.”   Shwetabh Gautam, Director of Financial Institution Partnerships at Even added: “We continue to see a strong resurgence in the demand for lending products across the millions of consumers Even surfaces offers for each month. The addition of cutting-edge partners like Figure strengthens our ability to connect consumers with the loans best suited for their unique needs.”   Even offers the largest network of premium, API-connected loan providers. Enterprises and established publishers such as MoneyLion and TransUnion partner with Even to power financial product offers for loans and other financial services including insurance, credit cards, and savings. Within loans, Even continues to expand its vast offering, recently launching products for secured lending, line of credit, and auto refinancing.   The launch of Figure on the Even platform enables consumers to get matched with personal loans of up to $50,000. Figure offers a 100% online application that allows applicants to apply and see their rate in minutes and access funding in as few as two days.   “Phill and the team at Even share our vision of leveraging blockchain technology to make financial services simpler, faster, and personalized. Through the Even platform, we will be able to reach a broader and more diverse set of consumers seeking our innovative credit products,” said Brad Simmons, CMO of Figure.   Even has continued its rapid growth trajectory in 2021, facilitating over $3 billion in consumer credit issued through its API and expanding its platform to over 400 partners. Earlier this year, Even was named one of “America’s Best Startup Employers'' by Forbes for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world.    About Even Financial Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as MoneyLion and TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, Citi Ventures, Fidelity’s F-Prime Capital, Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com.  About Figure Figure is transforming the trillion dollar financial services industry using blockchain technology. In three short years, Figure has unveiled a series of fintech firsts using blockchain for loan origination, equity management, private fund services, banking, and payments sectors – bringing speed, efficiency, and savings to both consumers and institutions. The company was founded in 2018 by serial technology entrepreneur Mike Cagney, who also founded SoFi and built the company into a multi-billion dollar business under his leadership as CEO. Learn more at www.figure.com.   Media Contact media@evenfinancial.com
PYMNTS: Even Launches Embedded Finance App on Salesforce
PYMNTS
PYMNTS: Even Launches Embedded Finance App on Salesforce
Now, financial advisors and other businesses will have a way to leverage Even’s platform for their clients. ‘Financial Products for Salesforce’ - Powered by Even, a plug-and-play app available on the Salesforce AppExchange, matches consumers with real-time, personalized financial product offers.   Click below to read more at PYMNTS.com.
Even Named to Forbes’ List of “America’s Best Startup Employers” for 2021
FORBES
Even Named to Forbes’ List of “America’s Best Startup Employers” for 2021
After evaluating 2,500 American startups with at least 50 employees, Even has been named in the Top 500 of Forbes’ second annual list, which recognizes companies that stand out in: employer reputation, employee satisfaction, and growth.   Click below to see full listing.