Imagine holding an ETF of 20 stocks that you could add or subtract to at any time. Instead of being stuck with all of the stocks in a coffee index, Motif Investing allows you to dump Krispy Creeme and add Starbucks if you think that is a better holding. You pick your diversity and holdings all with the click of a mouse and a total trading cost of $4.95
What is Motif Investing? Motif’s are incredibly revolutionary in investing. Never before have investors been able to customize like this. Motifs included are such catchy themes as Seven Deadly Sins (highlighting sin stocks of gluttony and sloth), Nuclear Renaissance (for those who believe in a come back in nuclear energy),Guns, Guards and Gates (security and arms), etc.
Really Easy to Use with Few Fees
But if you think Motif Investing only offers radical and socially irresponsible investing you are wrong. Cleantech Everywhere – solar, wind, and alternative energy, Healthy and Tasty – organic and health store foods, and even Income Inequality – which covers stocks that cater to both extremes of income high and low, inspired by the Occupy Movement.
The minimum amount to open an account is $1,000 and the minimum per Motif is $250. To own a Motif is $9.95, a relatively competitive price. To add or subtract the weight of the standard holdings in the Motif is $4.95.
The idea behind Motif Investing is to give you more power and tools at your fingertips to make better investment decisions. Many might see allusions to Peter Lynch’s Magellan Fund philosophy widely successful in the 1990′s – buy what you know.
Invest in your favorite interests and ideas not industries!
Motif Investing is incredibly useful to young people because they cater to high growth markets that baby boomers and even experts fail to understand such as Tablet Takeover – a play on the death of the computer, Online Gaming World – namely MMORPG’s, Digital Dollars – the use of tapping and sliding your cell phone for payment, and Lots of Likes – Social media stocks. These are all high growth areas full of winners and losers. If you buy into a Motif you can adjust the weight of the holdings based on what you know is better
Drawing on social media, Motif Investing allows users to discuss their sentiments on the Motif they choose as well as the underlying stocks. They can declare whether they are bullish, bearish or neutral and what they feel are the underlying factors for that rating. This reminds me a lot of Motley Fool’s Caps Community except with a little extra benefit. You can share your investing sentiments with just specific circles of friends, make it public or keep it entirely to yourself.
Diversification can be achieved with Motifs in a much different way than previously made available. For example if you take a look at the Caffeine motif you are not investing in coffee beans as a commodity nor are you investing in coffee producers. Instead you focus on beverages or food items that contain caffeine as well as the locations that serve them. This has more than upset many traditional investors.
Motif Investing offers social interaction but don’t get carried away
With all the benefits there are some potential pitfalls. For those used to a well run mutual fund or ETF’s Motif Investing might be a little bit too much responsibility. Because you can customize so much of your Motif’s with such ease both from an influence and usability standpoint you can generate a lot of commissions in trades if you are not careful.
Keep in mind, you are responsible for knowing what you are holding. This is nothing new for those who follow my take on continually buying single equities of high quality stocks.
Motif Investing is all about great transparency and allowing young people to invest the best way they see fit. Of course, it is not just for young people but they stand the best chance to benefit from the social sharing, the accountability and the no nonsense ease of use. Click here to join MotifInvesting.com.