When I started this Motif Investing review, I already knew that the best way to invest might also be the most boring way to invest.
Buy and hold. Buy and hold. Buy, and, yeah . . . hold!
Long-term investing is my recommendation for the masses, and unfortunately, that's just not a very exciting way to invest.
Think about it. What's exciting about throwing your money into a well-diversified portfolio and having it sit there for 20, 30, or 40 years? Not much. Well, that is, until you retire and realize you potentially have enough money to fill a swimming pool.
Personally, I get excited about investing, whether it be small amounts, such as investing $1000, or going bigger and finding the best way to invest 20000 dollars! But I understand that for most people, it's a chore they do because they understand the importance of investing in their future.
I'm always looking for ways to make investing exciting for people while warning them of the dangers of day trading. Thankfully, there are new companies cropping up everywhere that promise to add some spice back into investing.
One of those companies is Motif Investing.
So buckle up, we have a lot to cover.
Let's Get This Motif Investing Review Started – What's a Motif Anyway?
Traditionally, if you wanted to invest a sum of money, you would probably meet face to face with a financial advisor who would select a portfolio of stocks and bonds to match your risk tolerance level.
This is still an excellent way to invest, but what if you're the DIY-type and want to learn a bit about the investment process yourself? Well, you'd have a lot to learn. How much should you invest in emerging markets? How are large cap stocks doing? What's an outrageous amount to pay in mutual fund fees? What are the best places to open a brokerage account? These are just a small fraction of the number of questions you might have to answer in order to construct a solid portfolio.
If you don't know much about that stuff, you're not alone. It's very, very difficult to create a comprehensive portfolio that's tailored to your needs and risk tolerance level.
That's where Motif Investing saves the day. Motif Investing allows you to invest online in things you already know about.
For example, let's say you study electric vehicles and think they are the way of the future. You can invest in a “Battery Charged” motif with Motif Investing.
You see, motifs are groupings of stocks that are based on a single idea. You could invest in a “Robotic Revolution” motif or a “Medical Devices” motif. Simply visit the Motif Investing website, type in what you want to invest in, and 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 believe in without having to understand investing rocket science.
Motif Investing also allows you to invest in a way that makes sense. For example, if you want to invest $5,000 into Apple, you can do that – you aren't forced into buying a certain whole number of shares. While that's powerful, the most powerful feature is you can invest in what you believe in – and not in what you don't.
How Motifs Are Constructed
As stated earlier, motifs are a basket of stocks based on a single idea. When you select a motif, you can read the full details about the motif. The stocks are grouped together into segments.
For example, the “Robotic Revolution” motif is split into the following segments:
- Military & Defense
- Medical Applications
- Industrial Solutions
- Maritime Exploration
- Consumer Products
Next to each of the segments, there are percentages that indicate how much of the entire motif that segment represents. This is helpful, as it allows you to understand how each motif is weighted. If you don't agree with how the motif is weighted, you can always choose another, yet similar motif.
Under each segment are the stocks. You'll know exactly what you're investing into and what percentage of the portfolio each stock represents.
Who Builds These Motifs?
There are over 150 professionally-built motifs. That's a lot to choose from.
These professionally-build motifs are separated into categories that allow you to find what you're looking for very quickly:
- Income Strategies
- Trading Strategies
- Global Opportunities
- Asset Allocation
So, really, no matter how you like to pick your investments, there are groups of motifs for you.
If you're hungry for more, there are more than 180,000 motifs that were built or customized by people in the Motif community. That's a lot, people.
Yes, that means you can create your own motif and share it with your friends, family, or fans. In fact, that's exactly what I did during the Grow Your Dough Throwdown 2.0. I chose a few stocks and created the Good Financial Cents motif. I have a whole bunch of goodies in this motif, including AT&T Inc. and Cincinnati Financial Corp., just to name a few.
How Much Do Motifs Cost?
This is one of the best parts of Motif Investing: it's inexpensive to use the service.
Some services might charge around 10 bucks for a trade of one particular stock. With Motif Investing, you're just going to pay $9.95 in total for up to 30 stocks in a motif.
More from GFC, Below
And yep, that's if you buy a motif as it comes, if you customize it how you want it, or if you build it from the ground up. That's pretty straightforward.
You should know, however, that this pricing also applies to when you sell motifs, buy additional entire motifs that you own, or if you rebalance positions in a motif. This isn't surprising, and the pricing structure here still represents an excellent deal.
Additionally, keep in mind that the minimum investment amount is $250 for these buy and sell orders unless you do a “Sell All” order to sell an entire motif you own. Please note that on the FAQ page, it states that “you can start investing for as little as $300.” This higher amount is listed so that you can pay the fee for buying or selling motifs. It's a good suggestion anyway, as if you're going to invest in motifs, you're probably going to want to put even quite a bit more money into the motif to make it worth your fee.
Now, you may be thinking, “Okay Jeff, I get the motif thing, but what if I want to buy and sell individual shares within a motif I own?”
That's a good question. You might want to do so if you find a particular stock no longer really makes sense for a motif you own. Thankfully, you can buy and sell individual stocks and ETFs in motifs you own and it only costs $4.95 per stock or ETF. While that's steep compared to buying or selling whole motifs, it's still not that bad.
Oh, and by the way, you can also buy and sell individual stocks and ETFs outside of motifs you own for the same price. Bonus!
There are some other fees with Motif Investing, but most of them you'll probably never experience. Here's a list of Motif Investing fees and additional pricing details.
Let's Talk Motif Investing Returns!
When you invest with Motif Investing, remember, you're most likely going to be investing in a diversified way. However, your portfolio is probably not going to be as diversified as a portfolio designed by a professional financial advisor.
Say, for example, you invest in a few motifs. Yeah, you're diversified, but those motifs probably don't closely represent the market as a whole. That's why I feel you'll find your returns to be more volatile than, say, investing in an index fund. That's not necessarily a bad thing, but it's something to know.
While Motif Investing boasts a 16.3% average annualized return using their pre-built professional motifs, it's important to remember that this figure is using data starting at their creation which was not that long ago (from January 1, 2012 through July 31, 2015). While they represent this fairly on their website, it's important to note that you simply should not compare this figure with long-term historical returns of the stock market – it's apples and oranges.
Is Motif Investing Right for You?
This, my friends, is the important question. Is Motif Investing right for you?
Like just about every investing service out there, Motif Investing isn't right for everyone. However, it is right for quite a few people. Here are some thoughts . . . .
Investing for Retirement
Investing for retirement is probably the most important reason to invest. How does Motif Investing fit in retirement investing?
Well, the good news is that you can open a Roth IRA, Traditional IRA, or Rollover IRA account with Motif Investing. Learn more about Roth IRA rules here. There are no fees for opening or maintaining such an account. However, there is a $95 account termination fee. This, obviously, isn't a big deal if you're going to be keeping your retirement account for a long time.
With the low minimum investment and the ability to create a retirement account, Motif Investing is positioned to take a lot of clients who may not be able to afford investing the minimums often required by financial advisors.
On the other hand, I do have some concerns about people who might use Motif Investing to invest in only a few motifs; say, “Minimally Invasive Surgery” and “Modern Warfare.” Investing in a few motifs with all of your retirement money isn't the wisest thing to do. I mean, sure, maybe world war breaks out and outpatient surgeries become exceedingly popular, but placing your bets on just a few motifs isn't what I'd call “appropriate diversification.”
Motif Investing is great for those who are just starting out with investing for retirement and who can have the self control to diversify well. If that's you, try out Motif Investing.
Investing for Short-Term Goals
Because individual motifs probably have a higher likelihood than a well-diversified portfolio to be volatile, and if you're looking to invest for the short-term, Motif Investing probably isn't right for you.
Instead, here are 11 of the best short-term investments for your money. These investments are much better suited for you.
Investing for Fun
I can see how Motif Investing would be great for people who are already investing for retirement and want to invest some money on the side – just for fun.
With a variety of fun motifs to choose from, Motif Investing is great for those who want to “play” with some money on the side to see what happens. Of course, this should still always be done in a serious manner.
For example, let's say you're a fan of planes, trucks, trains, and just about anything with an engine that moves things. You might have some fun investing in the “Transporting America” motif. Of course, I would always recommend investing in things you believe in, so make sure you believe in the future of transportation before you invest in it.
If you're already financially secure and want to have a little fun with some extra money, try out Motif Investing.
Motif Investing is a unique and easy way to invest in what interests you – all at a relatively very low price.
It's unique because you can invest in what interests you and invest in whole dollar amounts instead of having to invest in whole share amounts. This is what sets it apart from the competition. Though with that being said, I have to advise you to check out all of your options in investing, which is why I have posted several other reviews such as this Motif Review for your reference, check those out here:
- Betterment Review
- OptionsHouse Reveiw
- Personal Capital Review
- Scottrade Review
- TradeKing Review
- E*Trade Review
Motif is also an easy way to invest because it's online. The user interface is pretty straightforward, and you don't have to understand the complexities of investments to make an informed decision – the information about each motif readily available.
Finally, the price is right – especially if you buy in bulk.
I hope you enjoyed this Motif Investing review. Try it out and tell me what you think in the comments!
Please note: This Motif Investing review contains affiliate links that result in a commission that I'd earn for you signing up for the services listed (this doesn't cost you more). Remember: I wouldn't recommend anything I wouldn't use myself.