This turned up in my Google Alerts this afternoon:
Peer-to-peer Lending Sites Can Offer Good Returns For Fundershttp://www.foxbusiness.com/markets/industries/finance/article/peertopeer-lending-sites-offer-good-returns-funders_454298_9.html..., investments in peer-to-peer loans are emerging as a another way to diversify a portfolio.
Not all diversifiers are good. Some diversifiers are best utilized by ignoring them.
Stocks fluctuates with economic cycles. Alas, I suspect sub-prime loans (the bulk of Prosper loans) also experience defaults going up during economic downturns, making them a poor diversifier for stocks.
But investors beware: The risks associated with these loans can be minimal to very high, in part depending on the credit history of the borrower.
...
This is the first time I recall seeing "risk" mentioned so early in the article. In fact, "risk" is mentioned frequently throughout the article.
I think the author may have heard the same saying I have heard: "If the returns are greater than you would expect, look for unrecognized risk (or undiscovered fraud)."