MoneyUnder30.com

Motif Investing Review: Trade ‘Buckets’ Of Themed Stocks For $9.95

Motif is an alternative online broker that allows you to invest in buckets of up to 30 stocks for just $9.95 per trade. You can choose from pre-made motifs or create your own mini mutual fund of stocks you select. Motif allows beginning investors to diversify their portfolios for far less than paying trade commissions on individual stocks.


As somebody who avoids stock picking and frequent trading, it’s hard to get excited about the latest research tools and bells and whistles offered by online brokers like E*Trade or TDAmeritrade. Quite frankly, as long as I’m investing in a few low-cost index funds, I won’t ever need them.

But what if the idea of indexing isn’t exciting enough for you? Maybe you get that day trading and hunting for the next Apple isn’t wise, but you want more control over your investments than putting your money in the entire market.

Coincidentally, there’s a new online broker that may deserve your attention.

Motif Investing

Motif Investing (affiliate – see footnote) launched earlier in 2012 with the backing of some experienced players in online investing. For a $9.95, Motif lets you buy a bucket containing up to 30 stocks that share a common theme like digital payments or green energy.

You can choose from prepackaged themes like clean technology or socially responsible investments — or the opposite, such as “seven deadly sins”, which contains liquor, gambling, and tobacco stocks. You can customize pre-made motifs or create your own. There are social features, too, allowing you to share your investing ideas with people in your circles.

My take on Motif

At first blush, Motif seems like an apt compromise between the admittedly boring route of index funds and the tedious, expensive, and potentially dangerous game of trying to build your portfolio from individual stocks.

Motif is a new online broker that lets you trade buckets of up to 30 stocks with a shared theme for $9.95.

Although Motif makes it easier to invest in industries or ideas that appeal to you without the cost and risk of trading individual stocks, I don’t see it as a substitute for the diversification of a portfolio of mutual funds or an index fund. In other words, having a few bucks of 30 stocks isn’t truly diversified portfolio if it only focuses on a couple industries and doesn’t include foreign stocks or bonds.

Costs

Savvy investors know that keeping costs low is as important as seeking bigger returns. Motif’s costs seem fair. Trading a motif costs $9.95, and you can add additional shares of an individual stock in that bucket for $4.95. There are no management fees or annual fees. There’s no minimum to open an account, but you’ll need at least $250 to buy your fist Motif. Motif offers no-fee Traditional IRAs, Roth IRAs, and Rollover IRAs, too.

Certainly, this pricing model will save you money over trying to buy 30 stocks yourself at $5-10 a trade elsewhere. If, however, your goal is to regularly invest small amounts ($500 or less) on an automatic investing plan, you’ll pay less buying a low-cost mutual fund directly from the fund company where fees are extracted annually as a percentage of your balance, but there is no cost to buy more shares.

Promotion

Motif is running a promotion for new investors where you can get up to $150 credited to your account after you make five trades.

Learn more about Motif or open an account here

Disclaimer: The links to Motif in this article are affiliate links, meaning if you decide to open an account with them, this site gets a few bucks, which helps keep all the content on Money Under 30 free. If you choose to support our site in this way, thank you!

Get access to our best money hacks:

Join over 11,000 other young professionals and learn how to get out of debt by 30, increase your income this year and invest for financial freedom.




100% free! I will NOT spam you and I will NOT share your email.

About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.