What’s Your Motif? Investing In Obesity Or Other Verticals
The traditional world of investing is kind of boring. Unfortunately, the more boring you are the greater the likelihood that you will succeed at investing. The fact remains that if you buy good companies and wait around watching corn grow you will more likely be successful.
Just look around. Everything that’s happened the past 5 years, and I can still rattle off great companies that continue to perform well and the market demonstrates that success with higher pricing. If you simply went away and hibernated for 5 years, you would have missed all the drama and would have been better off for it.
But, and there is a but here, you need stimulus to keep everything interesting. New tools and software have arrived that can make investing better, more social and even fun. One of the ways I kept investing interesting was investing small amounts of money in many different stocks. These positions were really too small to make any serious dent in my portfolio but it was fun. This activity was quashed after Zecco eliminated the monthly free trades.
So called social investing has been around for a few years. There are many sites that offer the ability to share portfolios as well as track the portfolios of famous and professional investors.
Enter Motif Investing
Motif Investing is newer website that is a full service broker that offers investing with a new social twist: sharing and investing in mini portfolios called motifs that track distinct investment ideas and trends. These are not your typical portfolios that your Wall Street broker would create. For example, one motif tracks investments that have a tie in to ‘Income Inequality’ (this portfolio has stocks of retail companies that service both high end customers as well as the lower end customers). This motif is shall we say, unorthodox, but it’s this kind of thinking that help you find companies to invest in that you may have trouble finding otherwise.
Once motifs are created, you have the ability to modify them to your own taste by adding or subtracting from them as you see fit. Then you act upon your own design by sharing it or buying the member stocks in one stock trade.
When the trade completes you own all the companies individually, it’s not an ETF, mutual fund or ETN. So, Motifs are not actually ETFs or mutual funds but simply a shopping cart full of individual stocks.
Here are a few Motifs:
Motif Versus Caps
I couldn’t help but to think of The Motley Fool Caps portal when I came across Motif. Caps is a social portfolio site that allows you to create and track a portfolio that competes on a daily basis with other members as well as against the benchmark S&P500 index. Caps has a somewhat similar concept to Motif called ‘Tags’. For example, an absurd Tag exists called ‘Single Letter Ticker‘. This is a portfolio that contains stocks with a ticker symbol of one letter.
Caps is fun, but I wouldn’t invest based upon the information on the site.
So, Motif as well brings out the skeptic in me in its ability to be a serious portfolio creation tool. There is potentially a lot of value here in the ability to find companies that are in a certain vertical, whatever it is. For example, there are many different software and hardware companies that go into making mobile devices. The Mobile Internet Tsunami Motif can help you to discover who some of those lesser known companies are. There is value in this information.
The Motif angle is kind of gimmicky, but I wouldn’t discount it because anything that makes investing more interesting and approachable is a good thing. The real value with this broker isn’t the Motifs, it’s the trade and commission structure.
If a Motif has 20 stocks in it, you can buy all twenty stocks at once for $9.95. That’s a price that doesn’t exist anywhere else except for certain situations at some brokers like Merrill for high roller investors that get free trades.
It gets better. You can buy all 20 stocks with as little as $250 and they will fill it with fractional shares if necessary!
Here’s the complete fee structure:
For us veteran investors, it’s clear that the broker services are still in development. For example, there isn’t any mention of how to do portfolio transfers in and out of the broker nor how or if dividends are reinvested. I would expect that these details will be developed as time goes on.
Motif Investing is an interesting take on social investing that is worth watching as the site develops. Given the low investment minimums, it offers the ability to easily buy a whole bunch of stocks for little money. And even if you don’t want to use them as a broker there are ideas in the Motifs that are worthy of your time to investigate.
I still think successful investing is a boring pursuit, but you can still have some fun at sites like this while you watch your portfolio grow.
Motif is currently offering FREE trades for the month of June 2012.