Our Motif Investing review takes a look at a broker available to traders. With so many options, it's important to pick the one you find most comfortable.
Founded in 2010, Motif is a full service brokerage which offers baskets of securities that carry various investment themes.
Is Motif Investing a Good Idea? (Review Breakdown)
- Users can choose from numerous professionally built "Motifs" that include up to 30 stocks and ETF's, centered on a core theme. Motif Investing offers more than 150 motifs to choose from, or you can also create your own motif. They are a great way to diversify your portfolio and their pricing is competitive. However, with a lack of advanced features, it's not the ideal platform for day traders.
In this Motif Investing review we will explore the features of the brokerage so you can decide it it's right for you!
Thematic investing has been around since the 1980s. But typically, it has been used by pension funds, endowments, and ultra-high-net-worth wealth managers.
The premise of thematic investing is simple. Firstly, markets over the long term are driven by earnings growth. Secondly, thematic investing looks to identify long-term trends that are likely to drive future earnings growth.
To sum it up, it is considered to mean a top-down investment approach with a focus on broader, macroeconomic themes.
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1. How Is Motif's Approach Different?
Our Motif investing review shows you how they're different. A lot of products on the market today take a simplistic approach to thematic investing. In contrast, Motif believes a more rigorous and systematic approach is necessary.
They use data science to uncover the most important trends driving the economy. Because of this they are able to find companies most impacted by trends.
Simply put, this makes it easy for the user to identify which companies to invest in. Check out our trade room if you want to see live trading in action.
2. What Is a Motif?
Do you know what a motif is? Our Motif Investing review answers that question. In a nutshell, motifs are groupings of stocks that are based on a single idea or value. A motif makes up a basket of up to 30 stocks or ETFs, that reflect an investment theme, market insight or innovative trend.
You could invest in a “Robotic Revolution” motif or a “Medical Devices” motif. Simply visit the Motif Investing website and search for what you want to invest in – you’re almost sure to find a motif related to your interests.
This is cool. Really cool.
Why? It gives the masses a way to invest in what they care about without having to understand the complexities of investing.
3. The Motif Catalog
4. Motif Example
We even offer an example in our Motif Investing review. To give you an idea of a specific basket of stocks that can be purchased at Motif Investing, I browsed through the list of available choices. A Banking motif created by a customer in 2014 caught my attention.
It consists of eight banking stocks with the largest holding of Citigroup at 27.0%. The and smallest holding is ING Group at 4.8%. With only eight stocks in the motif, it's much smaller than a typical mutual fund or ETF.
The Banking motif is graded at low volatility with average valuation and has a current dividend yield of 3.0%.
ETFs are another thing our Motif Investing review looks at. If you would rather skip the motifs altogether, the broker-dealer will let you trade individual stocks and ETF's. IPO's and secondary offerings are also on tap.
One really attractive feature of the Motif Investing platform is that it's possible to buy fractional shares of stock.
For example, if you want to trade stocks in dollar amounts - say $1,000 of Facebook - rather than by shares, you can. This means fractional shares are available making Motif suitable for small-dollar investors.
If you're willing to trade ETF's with market orders at the opening bell, you can do any fund for $0. Otherwise, it's a $4.95 trade.
If you're looking for ETF resources, you're not going to find very many here; the brokerage firm emphasizes motifs, so that's where its resources are focused (check out our many different types of stocks page).
6. The Desktop Platform
If you use a desktop, keep reading our Motif Investing review. Keeping in line with it's simplified approach to investing, the desktop platform is pretty simple and easy to use.
On the main page you can search using a number of criteria, including category, risk level, and professional vs. community-built portfolios.
If you're curious of a Motif's performance, the full details page for each Motif also provides a chart showing returns over time. You can also compare the Motif's past performance to any other ticker symbol, check out relevant news, and see what other Motif users and pros are saying.
Furthermore, you can set up alerts to notify you when a Motif you're watching hits a certain value. Also, watch lists for stocks, ETF and Motifs can be set up so you don't lost track of what you're watching.
7. The Desktop Platform Downside
Unfortunately, the robust screening features available for Motifs aren't provided for individual stocks and ETFs. To pull up a stock or ETF quote, you have to enter the ticker symbol in the search bar.
There are no tools to help investors find individual securities, since the focus is on diversified, packaged investments.
Moreover, the desktop platform doesn't have a ton of features or resources built in. If you want to chart individual stocks and ETFs, your options are limited.
You can see tick data, but no volume or other indicators or studies. Obviously this is not the platform for active day traders.
For investors looking to dive deeper into the data, Motif's platform isn't the ideal place to do research. This isn't necessarily a deal breaker as lot's of other sites readily offer this information. Hence our Motif Investing review.
What Are Motif Investing Fees in 2020? (Pricing Review Breakdown)
- Next Market Open Trades - $0 per trade for Our Professional Motif Portfolios. $9.95 per trade for Your Built or Community Motif Portfolios
- Next Market Open Trades - $0 per trade for single stocks/etf's. $0 per trade for IPO or secondary offerings
- Real-Time Trades - $9.95 per trade for Our Professional Motif Portfolios. $19.95 per trade for Your Built or Community Motif Portfolios
- Real-Time Trades - $4.95 per trade for single stocks/etf's. $0 per trade for IPO or secondary offerings
To invest in a motif, you can start investing for as little as $300. To trade on margin, you’ll need a minimum balance of $2,000.
Buying and selling a broker-constructed motif is free of charge if you place a market-on-open order. This means the order will execute at the opening bell on the next trading day. Otherwise, you can pay $9.95 to have the trade executed immediately.
Each motif comes with an annual fee. The brokerage firm calls it an “annual licensing fee.” Impact Accounts pay 0.25%. This same charge is applied to certain motifs in a regular account. These are target-date, fixed-income, and investing classics motifs. Other themes cost 50 basis points. Horizon motifs, which have a lifespan, have no fee.On its most basic level, Motif charges $4.95 per share and $9.95 to $19.95 per motif. However, it’s important to check out Motif’s complete list of commissions and fees.
1. Customer Service: Motif Investing Review
The customer support section of the Motif site is fairly comprehensive. You can call a toll free number or email Motif for more help from 9 a.m. to 6 p.m. ET Monday through Friday.
Unfortunately, the broker is closed on the weekend, and there is no on-line chat function. Moreover, the company does not have a network of branch locations.
2. Pros: Motif Investing Review
- HIGH TECH MOTIF SCREENING PAGE
- FREE TO USE
- OVER 150 PRE-BUILT MOTIFS
- COMMISSION FREE TRADES
- SIMPLE CUSTOMIZATION
- AUTOMATED INVESTING
3. Cons: Motif Investing Review
- DELAYED DATA WITHOUT A SUBSCRIPTION
- NO HIGH-TECH FEATURES, CUSTOMIZABLE CHARTS, OR BACKTESTING CAPABILITIES
- LIMITED SECURITIES - NO OPTIONS, MUTUAL FUNDS OR FOREX
- $1,000 MINIMUM INVESTMENT FOR THE FULLY AUTOMATED IMPACT PORTFOLIO ACCOUNT
- LACK OF RESEARCH TOOLS
4. Who Is Motif Investing For?
Motif isn't designed for active stock traders. For investors who like a hands off approach, Motif might not be your best choice.
Motif is also one of the best services for diversifying a small investment. The ability to trade up to 30 stocks or ETFs for one low commission is truly noteworthy, as is the support in finding investments that align with your values.
In my opinion, Motif Investing is especially helpful for those who are looking to invest in trends, or who want exposure to a particular sector. Motif would probably be best for fund investors would like the ability to customize the baskets they trade.
5. Unsure Where to Start?
All things considered, the best way to start investing in stocks is to pick a style of investing then educate yourself.
As a matter of fact, you don’t need to spend thousands of dollars to get there. In other words, there is no magic formula, just patience and a hunger to learn.
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