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Motif Investing is a nifty little brokerage with a different approach to investing than many other online brokers. To help wrap your head around all of the bells and whistles, we’ve compiled this complete Motif Investing review!
In this review, we’ll talk about who Motif Investing is and what they believe. We’ll discuss how you can open your own account and create motifs of your own. We’ll even talk about the exact steps to buying and selling securities at Motif.
We’ve designed this Motif Investing review to be the most comprehensive guide to Motif on the web. We hope you enjoy it. If you decide to try Motif Investing, we’d love for you to sign up using the links provided. We do receive a small commission for the referral – at no cost to you, of course – and we’d be forever grateful.
So, if you’re ready to learn all about Motif Investing, let’s dig in!
Introducing Motif Investing
Motif Investing is different than most brokerage companies you’re used to. They believe “everybody knows a lot about something” and encourage investors to put their money where their knowledge is.
Rather than investing in straight index funds or paying high fees to have your money actively managed, Motif Investing focuses on investment themes called “motifs.” This concept driven platform allows you to choose a preformatted investment niche of up to 30 individual stocks or ETFs for one low price.
Think of a motif like an index fund based on a theme. For example, you can invest in the “Nuclear Renaissance Motif” – a motif comprised of companies and ETFs involved in the nuclear power industry.
Motif Investing is perfect for those with just a few dollars to invest. If your goal is investing in stocks with little money, it’s crucial to do all the research you can. With Motif, the typical commission is just $9.95 per motif. There are no minimum account balances, and you can even join for free!
Types of Investments Offered
Motif Investing offers several different account types, including:
- Individual/Joint Trading Account
- Traditional IRA
- Roth IRA
- Rollover IRA
- Trust Accounts
Motif Investing Features
Motif Investing can be used by beginning investors and pros alike. Here are some of Motif’s most important features:
- Sign up bonus of up to $150
- Theme styled investing
- Low commission structure – just $9.95 per motif
- No monthly fees
- Over 150 professionally packaged “motifs”
- Create your own motif
- Each motif carries 30 different stocks or ETFs
- Customize the stocks in each motif
- Royalty program for motifs that you create
- New time horizon motifs available
- Ability to chart and compare motif and stock performance
- Option to trade using smartphone apps
- Access to the Motif Investing Community
- “Discover Your Investing DNA” survey
- $100 referral bonus
- Motif Blue (new)
How Does Motif Investing Work?
As we mentioned, Motif Investing operates differently than your typical online brokerage house. Instead of the usual list of investments to choose from, Motif encourages investors to put their dollars into packaged products called “motifs.” Here’s a quick video that explains how it all works:
What is a Motif?
A motif is a selection of 30 different stocks or ETFs that revolve around the same basic theme. Motif Investing packages those selections together for one low price of $9.95.
For example, if you think there is money to be made in the food sector, the “Rising Food Prices” motif might be for you. This motif is full of packaging firms (like Kellog’s and Hershey) and crop processors (like Archer-Daniels-Midland). Like an ETF or a mutual fund, asset percentages are weighted differently, allowing you to diversify across the entire theme and spread your risk accordingly.
Motif Investing has over 150 prepackaged motifs available for instant purchase. To build their professional motifs, the company creates an index using companies which are most relevant to the central theme. While this index could contain hundreds of companies, the motif itself only includes 30. Like a traditional index fund, the motif attempts to mimic the performance of the base index.
You’ll find a wide range of themes that you can invest in. There are social themes – like the “Fossil Free” and “Gay Pride” motifs – as well as some unique themes like the “Rest in Peace” – a motif composed of stocks related to the funeral industry. Investors will even find motifs based on political causes like the “No Glass Ceilings” motif (composed of companies with women CEOs) and the “Guns, Guards, and Gates” motif.
Regardless of which motif you choose, an initial investment of only $250 is required to spread your money across all 30 stocks in a motif. Additionally, you’ll be required to pay the small commission charge of $9.95.
The pricing at Motif is pretty straightforward. Here is how it breaks down:
|Type of Transactions||Price|
|Buy or Sell Motifs/Additional Buys of Motif You Own/Rebalancing Positions in a Motif||$9.95 per Motif|
|Buy or Sell Individual Stocks/ETFs in Motifs You Own||$4.95 per Stock/ETF|
|Buy or Sell Individual Stocks/ETFs Outside of Motifs You Own||$4.95 per Stock/ETF|
As you can see, Motif typically charges a flat fee of $9.95, regardless of how much money you have invested. That’s a steal considering how much you’d spend on fees with a managed account. Even compared to pricing at other discount online brokers (typically around $7 per stock transaction), it’s still a great price – especially, considering you get exposure to 30 different stocks or ETFs.
A minimum investment of just $250 is required to purchase a motif. That’s a very low bar to cross, making it easy for beginners to get started.
Hot Tip: If you want to trade individual stocks or change stocks within a selected motif, there’s a commission charge of $4.95. So, if you are looking to buy or change out more than 2 stocks, it makes more sense to buy an entire motif for $9.95. That way, you have your pick of 30 stocks and can balance those stocks according to your goals.
Want access to a margin account? Motif Investing has that too. Personally, that’s not something we do. But, if you’re a fan, be aware that you need $2,000 in your margin account prior to buying stocks.
Advantages of Motif Investing
Awesome “Themed” Investing Concept – Themed investment packages are a great way to gain exposure and build residual income streams in a niche that interests you. By bundling the major players into an easy to find packaged security, Motif Investing is a great way for beginners to get started or for experienced investors to add exposure in specific niches.
Over 150 Professionally Designed Motifs – If you’re a new investor (or even if you aren’t), the professionally designed motifs provide a great starting point for theme-based investing. These motifs attempt to mimic professionally crafted indexes which Motif has designed specifically for each particular niche. Since 30 companies are packaged into each motif, you gain significant exposure and diversification in hard to find niches (like “Green Energy”).
Instant Diversification – Show me an investor who puts all their eggs in one basket, and (9 times out of 10) I’ll show you somebody who is broke. Diversification is so important, and Motif has it nailed. Because each motif is created using 30 different stocks, investors gain instant diversification within that niche. Be aware, however, that diversification within a single niche does not mean you’re well diversified throughout your entire investment portfolio. Make sure you invest in multiple areas, and not just a single niche.
Investor Control – Even if you purchase a professionally designed motif, you have total control over what’s in it. If you wish to change any of the companies held by the motif, you can do so for a fee of $4.95 per stock. You can also change how the motif is weighted toward particular stocks. You can even create your own motifs or purchase motifs created by other investors.
Low Fees and Minimum Balance – If you don’t have a lot to invest, or if you’re looking for alternative investment options, Motif Investing is a great place to start. One of their best features is the straightforward, low fee structure. Regardless of whether you invest $300 or $100K into a motif, the commission remains is still $9.95. That’s hard to find anywhere else. You can even join for free and begin investing with as little as $300.
Disadvantages of Motif Investing
Rebalancing – Although Motif Investing regularly rebalances their professionally crafted motifs, they don’t rebalance your portfolio for you. When you receive dividends and deposits, you’ll be notified that changes have been made to your motifs. You’ll then have to agree to the rebalancing by manually clicking a button from the motif page. You’re also charged $9.95 every time you rebalance. So, if you’re stretching for a disadvantage, I guess that would be one. (The new addition of Motif Blue seeks to remedy this.)
No Automatic Dividend Reinvestment – Although Motif offers some dividend themed motifs, they do not currently offer automatic dividend reinvestments. Rather than investing dividends back into your motifs and rebalancing your portfolio, you’re forced to take those dividends as cash. My hunch is that Motif Investing will add this functionality in the near future.
Comparing Motif to Other Investment Options
As I’ve stated already, Motif isn’t your average online brokerage site. There are some distinct advantages (and disadvantages) that Motif Investing has over the competition. Here’s a chart provided by Motif to help you compare how Motif Investing stacks up to other investment options.
How to Buy and Sell Motifs
Buying and selling motifs is extremely simple. Just follow these basic steps:
To Buy a Motif
- Find the motif that you want to buy from the catalog and click on it.
- Click on the blue “Buy Motif” button in the upper right corner of page.
- Enter the amount you wish to invest in the motif in top right corner of page.
- Click the blue “Preview Order” right below the box.
- Click the blue “Place Order” button to buy the motif in real-time.
To Sell a Motif
- Go to your dashboard or your “Positions” page from the “My Investments” dropdown menu.
- Find the motif you wish to sell and click the blue “Trade” button to the right.
- In the top right corner, enter the dollar amount you wish to sell. (Select “Sell All” to liquidate the motif.)
- Click the blue “Preview Order” button below.
- Click the blue “Place Order” button to complete the transaction in real-time.
Buy or Sell Individual Stock within a Motif
- Click on the motif in which the stock resides.
- Scroll down to see the list of individual stocks within the motif.
- Click the blue “Trade” button to the right of the stock you wish to buy or sell.
- Adjust the number of shares you wish to buy or sell.
- Click the blue “Preview Order” button below.
- Click the blue “Place Order” button to complete the purchase in real-time.
How to Build and Customize a Motif
At Motif Investing you have total control over your money. Even with the prepackaged motifs, you can completely customize how the motif is weighted.
For example, if you choose the “Home Improvement” motif but prefer Home Depot to Lowe’s, simply change how the motif is weighted. You can even add or remove securities from the motif at no additional cost, provided you stay within the 30 securities limit per motif.
Motif even allows you to build your own motifs. Yep! If none of the 150 prepackaged motifs interest you, simply build your own from scratch. You can even share your motif with others and earn a commission through their “Creator Royalty Program” whenever somebody buys it. Currently, you earn $1.00 every time another investor buys or rebalances your motif. That may not seem like a lot, but if you can get a following of a few hundred people, that could become a nice little side income!
Here’s how to do it:
- Name your motif.
- Add any stock.
- Create and buy it for the regular comission cost of $9.95
Pretty freakin’ sweet, am I right?!? You can even
Motif Investing Review: Top Features
Over the last few years, Motif Investing has introduced their new “Horizon Motifs.” These professionally crafted motifs are intended to provide the best returns possible using a chosen risk tolerance and time horizon. Motif currently offers 9 different Horizon Motifs of varying length and risk tolerance – conservative, moderate, or aggressive – over a period of 1, 5, or 15 years. The motifs are packed with index-based ETFs to represent each asset class. The best part: Because of the low-cost nature of these ETFs, Motif Investing offers their Horizon Motifs with no commission fees.
Motif Investing believes in the power of community. That’s why they provide you with plenty of social tools to help improve the investing experience. In addition to creating and sharing motifs that you designed, Motif also lets you create your own circle of investors with whom you can share ideas and advice.
As with everything else at Motif, you can totally control who you’re sharing ideas with through the privacy settings. Share your thoughts with the entire Motif community or with only a select group of friends. It’s up to you. Here is how the sharing feature looks:
Motif Creator Royalty Program and Referral Bonus
As I mentioned earlier, you can earn royalties on any motifs that you create when they’re purchased by other investors. So, that is pretty cool, especially if you build a nice following through the Motif social channels. In addition to the royalty program, Motif also offers a $100 bonus if you refer a friend. Not only will you get the bonus applied directly to your trading account, but your friend will get $100 deposited into their trading account as well. That sounds like a win all the way around! Of course, restrictions and rules apply, so read those carefully.
Motif Blue (New)
While Motif has had success with buy and hold investors, they had a bit of a gap when it came to enticing more active traders to use their platform. With the addition of Motif Blue, they are trying to remedy that. Motif Blue is a monthly subscription service offering 3 different levels of pricing. The idea is to provide you with access to more information, the ability to automatically invest, and the option to trade more frequently at a lower price. Subscriptions start at $4.95 a month and run up to $19.95 a month for the Blue Unlimited package.
Who Should Use Motif?
- Niche Specific Investors – If you want exposure in hard to find niches, Motif Investing is the spot for you! Motif’s unique approach to concept-driven investing is perfect for investors who are socially, politically, or trend conscious. Since each motif contains a basket of 30 different individual stocks or ETFs, purchasing a motif instantly diversifies your investment throughout the niche.
- Do-It-Yourself Investors – Investors looking for total control over their investments will find Motif Investing to be a good option. You can purchase professionally designed motifs, create your own, or buy and sell individual stocks within those motifs. Additionally, you can change how each asset is weighted to suit your individual goals.
- Investors with Low Cash Reserves – Motif is a great place for investors with small amounts of money to invest. It’s also a great place for making secondary investments in niche markets. You can join Motif Investing for free and they charge a low, straightforward commission fee of $9.95 on most transactions. In addition, the $300 minimum investment per motif is a very low threshold to clear for both beginners and secondary investors.
Who Should Not Use Motif Investing?
- Day Traders – Motif Investing isn’t your place if you want to focus on buying individual stocks. Likewise, if you are looking to trade options, you should look for another brokerage site. Consider using a place like TradeKing instead. (Read our review of TradeKing here.)
- Investors Needing Guidance – While total control is a plus for many investors, for others it is a negative. If you need a lot of hand-holding or guidance, you should probably stay away from Motif Investing. This could include new investors but doesn’t have to. Try someplace like Personal Capital instead. (Read our Personal Capital review here.)
- Emotional Investors – Because of the nature of theme-centered investing, some of the motifs can be very volatile. Of course, volatility totally depends on your choice of investment. If you’re somebody who doesn’t like to see wild returns (and losses) or can’t afford the swings, Motif Investing may not be a good fit.
Motif Investing Review: The Verdict
Motif Investing is a great resource for investors wanting exposure to certain niche markets. The low commission costs and $300 minimum investment requirement make it the perfect place to supplement your portfolio with secondary investments in hard to find niches. Motif is also great if you’re looking for substantial diversification but don’t have a lot of money to spend. The Horizon Motifs offer an easy way for new and inexperienced investors to get started by simply choosing their risk tolerance and time horizon.
I think the idea of concept-driven investing is pretty freakin’ sweet – especially if you’re a socially conscious investor. Additionally, I love the control Motif gives you over your investments. As a DIYer, I think Motif Investing is awesome.
I’m a fan. Count me in!