Are you looking for an investment opportunity that’s different – I mean really different??? Motif may be that opportunity.
With other investment brokers and platforms, you work within the framework of predetermined choices. Those choices can include wide options in stocks, bonds, mutual funds, ETF’s and other investment vehicles, or it can be a custom-designed portfolio tailored to your risk tolerance
But along comes Motif Investing, who also makes all of those investments choices available to you, then tells you that you can rearrange them into any kind of portfolio that you might choose.
They refer to it as Investing Made Social, which makes a lot of sense. We can almost think of it as Wall Street meets the social media. The more than 100,000 customers who use Motif are a strong statement that the platform is onto something.
How Motif Trading Platform Works
The goal of Motif is to empower investors with low cost solutions that will enable you to turn your investing ideas into workable investments. Where there is a growing trend in the investment universe toward total investment management, Motif is going against the grain by empowering investors to create their own investment choices.
The concept is built around the idea of a motif. This is something of a mini investment portfolio that is created by individuals, and built around an idea. The idea can be based on anything you like – literally.
We’ll get into some of the specifics on creating motifs in a little bit, but the ideas are as wild as your imagination.
The site offers more than 150 ready-made professionally built motifs, but there are thousands more on the platform that were created by individual investors just like you. Each motif contains as many as 30 stocks and/or exchange traded funds, and is built around a unique concept. The securities held in each motif represent an attempt by the investors in the motif to create a portfolio of securities that are consistent with the concept for that motif.
You can investigate the many motif choices by checking out the Community Catalog. If you don’t find any that you’re looking for, then you can create them yourself. You may even decide to partner with other investors on the platform to help you refine the motifs that you have in mind.
Motif provides the wealth management framework by offering low-cost, customizable modules that are intended to provide a broad diversification that will help you to meet the goals of the motif you’re trying to create.
You can setup both individual and joint investment accounts, as well as traditional, Roth, and rollover IRA accounts, and also trust accounts.
And you can access any of those accounts through the Motif Explorer app, available for download at the Apple app store. It lets you stay on top of investing ideas no matter where you are, monitor motif performance, find new ideas, and review performance charts.
Examples of Motifs
Even if you have no idea as to what type of motif you might want to create, there’s plenty to investigate on the platform. There more than 55,000 motifs that have been created by members of the Motif community.
Here are some examples:
“Drug-Patent Cliffs” – This motif is centered around generic drug companies. The basic idea is that the clock is ticking down on the patents of many name brand drugs. As those patents expire, generic manufacturers will be there to fill the void. The one year return on this motif is an incredible 39.9%.
“Lot's of Likes” – Remember my social media reference at the beginning of this article? This is a motif that literally takes its cues from the social media. It measures Facebook likes as they relate to companies, and as an indicator of things to come. Companies with a lot of likes will appear in this motif. The one year return on this motif is 22.8%.
“Socially Responsible” – This motif invests in the stocks of companies that are deemed to be socially responsible. The one year return on this motif is 26.2%.
“Buy the Dip” – This is a motif that invests in companies whose stock have taken a nosedive, but where the fundamentals are strong. This is value investing at its best, and the one year return on this motif is 19.9%.
As you can see, motifs are anything but conventional. If you’ve ever had a notion to invest in a very specific niche of the economy, Motif is the place and the way to do it.
Creating Your Own Motifs
You can create your own motifs, and when you do, the platform will give you complete control over the portfolio. And once you create it, you can put it out on the platform so that others can monitor and invest in it. That will turn you into a small time portfolio manager!
You can take ideas that others have created, and modify them into something different. Or you can create a motif that is completely new. Motif gives you all the tools to do just that.
Motif will help you to find investing ideas by looking for trends, ideas and world events that could create an investment opportunity. They will then build a portfolio by finding related stocks and intelligently weight them based on their exposure to the given idea.
At that point, you can tailor the portfolio to your own liking. There are slider bars that make it easy to change the weights of any given investment in the motif. You can also add or delete any stock or ETF until you have the mix that you want.
A motif can contain up to 30 stocks or ETF’s. It must be funded by a minimum investment of $250. There is no maximum dollar amount to have in a single motif.
Very general motif parameters include:
- Equities motifs to align with industry and investment trends
- Fixed-Income motifs to potentially stabilize your portfolio
- Target Date motifs for retirement or future financial goals
- Dividend-Based motifs for potential growth and income
But you can go as far outside those parameters as you choose. This is truly a custom investing platform!
You can open a Motif account for free, and the platform does not charge monthly fees.
You will pay $9.95 for each motif that you create. If you already own a motif, and you want to change the stocks or ETF’s that are in the portfolio, you can do so for commission of $4.95 per trade. Alternatively, you can completely rearrange the entire motif – including all security trades – and then pay a single rate of $9.95 for a brand-new motif.
You can also re-balance your motif for a flat fee of $9.95. (Motif will contact you and let you know when this may be necessary.)
$9.95 is just a little bit higher than the fee that most online discount brokerage firms charge for trades of individual securities. You can buy an entire portfolio of up to 30 securities for that same fee, which is not a bad deal of all.
However the fee does become excessive on small dollar motifs. For example, if you create a motif based on the minimum investment of $250, the $9.95 fee will represent a transaction fee of just about 4% on the motif.
So ideally, you’ll want to make sure that any motifs that you do create are substantially larger than the minimum. Remember, you’ll pay the same fee to create a $250 motif as you will to create a $25,000 motif, but the fee percentages will be radically different in either case.
Will Motif Work for You?
You know those online investment platforms that manage your investments for you, and give you zero chance as to how to invest your money or what securities to hold? Motif is the antidote to those platforms. Here you can invest in what ever you like, and if you don’t find anything, you can build your own investment motifs from the ground up.
Unless you have a real knack for finding winning stocks, or identifying high performing sectors, it’s probably best to have most of your money in managed investment platforms (like Betterment or Wealthfront) or in mutual funds or ETFs. Keep a small amount of your portfolio in Motif as a way of spreading your creative investment wings – at least until you prove to yourself and to others on the site that you have a real talent for creating profitable motifs.
If a different kind of investing interests you, then check out Motif. Different is what they do.