Motif Investing is an online broker that lets you invest in ideas. The company, based in Silicon Valley, is changing the face of online investing through an innovative new platform that allows individuals to invest in stock and bond portfolios based around everyday ideas and broad economic trends...
Instead of picking stocks on your own one by one, why not bundle them all together under a similar idea? Motif Investing wants you to embrace this type of trading but instead of going all in on, say, energy funds, you can mix and match various companies to support a specific motif. Browse the catalog of motifs and when you find one you like, you can customize the specific stock weights, and add or remove individual stocks.
A motif will cost the same amount even if you change around the composition—just $9.95 for everything. Motifs could be comprised of stocks from many different segments, and some have catchy titles like Office Space (based on real estate going up in health care, food service, etc.), Black Gold (alternate energy sources), Caffeine Fix and Couch Commerce (shopping from home).
There is also a social aspect to the site, which is a platform for you to create a personal Investing Circle and share information. In addition to the built-in widget you can find your friends on Motif through Facebook and connect with them in that way. The concept of the motif allows you to invest in your own ideas and transcend traditional investing models. This is especially helpful for such up-and-coming ideas as Lots of Likes, which invests in companies that have an exceptionally powerful social media presence. Each motif has a “How We Built It” button that displays the thought process behind its formation. And, as always, you can add and subtract from the weight of each stock or delete them entirely and add new ones as you see fit before purchasing.
Pros Cons Purchase 30 stocks for one price Trading after purchase is comparatively expensive Motifs are customizable Social aspect clunky and superfluous Does not need separate brokerage account No mobile app
Since Motif Investing bundles up stocks under a specific motif, you save on fees based on the amount of stocks you buy. The company charges one transaction fee of $9.95 to buy or sell a motif, which can include up to 30 stocks. After you buy a motif, you can buy or sell additional shares of any stock within the motif for $4.95 per transaction. If you think about it, this is a great platform to bundle your own ETF/mutual fund for no extra charge since you can customize any purchase. True, you cannot track a broad index like the S&P 500, but this is a more cost-effective way of purchasing a smaller basket of stocks.
Motif offers a native iPhone application that allows users to track their investments and keep an eye on their motifs. Additionally, you can discover new motifs and add them to your watchlist. From a research standpoint, the app provide performance data and the segments and stocks of a motif. Unfortunately, you have no way to trade motifs with the mobile app -- a feature that would definitely increase the functionality of the app.
Minimum Investment Requirements/Breadth
The minimum purchase price for a motif is a bundle of stocks worth at least $250. The same applies to selling a portion of your motif (the portion must equal $250) unless you are placing a "Sell All" order to sell the entire motif.
Motif Investing does not offer a free trial, but you can browse any motif in its catalog and sign up as a member for free to see the stocks contained inside it and their respective weights. To invest, you will need to open and fund a trading account with a minimum deposit of $1,000. To trade on margin, you'll need a minimum balance of $2,000.
Motif Investing offers its own motifs, but they encourage users to play with them as they wish and create their own by submitting ideas to the company. Each motif includes its popularity and daily as well as yearly returns. To buy a motif, you do not actually have to link a checking account to your Motif account, nor do you have to trade through a separate brokerage. Motif Investing offers individual and joint brokerage accounts as well as no-fee IRAs including a Traditional IRA, Roth IRA and Rollover IRA. Funding an account can be done through wire transfer and ACH online transfer. If you already have an IRA, you can fund it by ACAT (account transfer). You can also mail in a check.
Motif is very proactive in educating its investors and very transparent in the stocks in its motifs. Each motif has a short description of its makeup usually with financial data on the topic and a performance chart detailing the returns of those stocks. You can also see its current performance, its yearly returns and the volatility, valuation and popularity among users. A tab called “What Others Think” will let you in on the conversation others are having about this specific motif.
The site also includes a News page, which is the company blog, and is updated pretty frequently. It includes issues which may affect investors’ decisions like mobile technology, weather conditions and food prices, political issues, health care and cultural trends.
This is a good site for beginners because of the simple fee structure (even though it could get a little expensive if you’re not watching out for commissions when buying and selling), the social activity surrounding your investments and the ability to invest in ideas that you believe in, like mobile payments. It will add some diversity to the way you invest and you can interpret an idea any way you’d like.
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