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Motif Investing

Have you ever wanted to build your own mutual fund or ETF? I know I have. What if you could build your own mutual fund or ETF at no cost? Would you be interested? If that doesn’t interest you, then how about this. The company also offers mutual fund like products with no maintenance fee. Are you interested now?

What is Motif Investing?

Motif Investing

Motif Investing is a different kind of brokerage. They allow you to purchase and/or modify motifs. Motif Investing allows you to invest in 77 different motifs. The motifs are divided into different categories that are sort able by idea type and industry.

Idea type motifs include some well know investing strategies. These range from the “Dogs of the Dow” to “Bullet Proof Portfolio”, which contains companies with huge cash balances (APPL anyone). On the other end of the Idea Type motifs, are the cultural motifs. These include motifs with names like “Income Inequality,” “Democratic Donors,” and “Republican Donors.”

There are also fixed income motifs to choose from. My favorites are California Munis and New York Munis for residents of those states. Why? Tax free investing if you invest in your states municipal bonds.

Fees

They have a $250 minimum to invest in a motif with a flat fee of $9.95. To me the minimum is irrelevant because I never let the transaction fee account for more than 2% of the total investment I am making so 9.95/2% = $497.50. Therefore, I will always buy in $500 blocks.

You may add, remove, or change the weight of any stocks in a motif before you buy it. This part excites me the most because this is where you can create your own motif for a transaction fee of only $9.95. If you want to change your motif after you invest in it (customize before hand) the fee is $4.95 per stock added or removed.

Cons

The major drawback I see to Motif Investing is its lack of tools to research investment opportunities. This is not a big deal to me because I will still be using my other brokerage account and research investment opportunities on their site.

Mint.com does not currently synchronize with their website and Motif Investing does not have an app that allows you to make trades on your smart phone. These are not big issues but merely an inconvenience. I hope that these problems will be solved in the near future.

Why I signed up for Motif Investing

Because it is cool. Okay, the real reason is I was just starting to plan my portfolio for my taxable brokerage account and having a few issues on deciding what to buy first. I know Dogs of the Dow was going to be part of my strategy, but it would take $5000 to buy all 10 stocks in one go around. Motif Investing simplifies this for because I can buy all 10 stocks at the same time and keeping the 10 stocks balanced will be extremely easy. I can also add up to 20 more stocks to the Dogs of the Dow motif before I invest in it.

Overall, I like Motif Investing enough to open an account just because it allows me to create my own semi-mutual fund. I hope this new business model is successful and they continue to add more tools for investing.

What is your opinion of Motif Investing?