Founded by Hardeep Lalia in San Francisco, Motif Investing has given the stock trade a whole new meaning. It allows an individual to buy a group of 30 stocks in just one trade. The company calls these groups “motifs,” and they are bundled together based on certain criteria (such as type of industry). This system has made it easier for first-time investors to get their hand into the stock market, and the easy-to-use interface makes it simple to find what they’re looking for.
Compared to traditional investments (such as mutual funds), the stock bundles on Motif Investing are surprisingly cheap. Each group costs $9.95 for one trade. This price is the same for both buying and selling, but you will need to have at least $250 in your account before you’re able to start trading. It costs $4.95 to swap one stock in a particular group for another. However, Motif Investing does not charge any maintenance or inactivity fees.
When it comes to trading stocks, it’s always a good practice to have some sort of diversification strategy. You want to buy a variety of investments, and you want to put your money into a number of different markets. While this is a great company for a first-time investor, it does seem to fall short in this area. This can be detrimental if one company or industry experiences problems. One good thing is that you can add ETF’s to a motif, which can add more diversification to your portfolio and minimize your market risk.
The whole idea behind trading stocks is to make a profit, but there is an old saying that applies to any type of business – that “you have to spend money to make money.” In other words, you will need to reinvest a portion of your profit to make even more. This is a necessity in any type of business, and it will help you keep the cycle going.
Taking the money you made off of a stock and putting it back into the market (what they call “dividend reinvestment”) is a necessary strategy anyone planning to have long-term success. After all, expanding your portfolio will only increase your potential for greater profitability in the market.
Unfortunately, Motif Investing will not automatically reinvest your dividends. You will have to either cash them out or reinvest them manually. This can be a problem if you’re short on time and don’t want to do it yourself.
Motif Customization and Single Stock Trading
While Motif Investing is not designed for single stock trading, you are able to swap one stock for another, which can allow you to customize your portfolio in a way that you see fit. However, doing so will cost you more, so you will have to take that into consideration for you decide to make these kinds of changes. For this reason, Motif Investing is not a good choice for people who are more interested in trading individual stocks, and it will not be a good option for a day trader or short-term investor. However, if you’re looking to create a long-term portfolio that can give you lasting success, Motif Investing might be a great choice.
While you’re not able to automatically reinvest your dividends, you are able to customize the distribution of the money in a particular motif. This “asset allocation” feature will give you greater control over your portfolio. You can even create a custom motif, which you can with other investors. And did I mention that you can receive a commission on custom motifs?
While this company is a far cry from traditional investing, I still feel it’s worth taking a look at. It can be a great option for someone who is new to the stock market, and it can be a great way for someone with a lower net worth to build a solid portfolio that can help them acquire more capital. Even if you are an experienced investor, it might be a great supplement to more traditional assets.