Motif Investing Review Plus $150 Bonus for New Account
- Motif Investing
Take control of what to invest with Motif Investing theme based investment motifs. Buy a motif with up to 30 stocks with $9.95 commission or $4.95/trade for individual stocks in the motif. For a limited time, receive $150 bonus for a new brokerage account.
A few years ago, I wrote a post about building my own portfolio with nothing but ETFs, when Exchange-Traded Funds (ETFs) have started to gain popularity among investors. The idea was that, because of ETF’s popularity, it was entirely possible to pick one ETF in each asset class I wanted to invest in and assemble them into one diversified portfolio with the asset allocation I wanted. What I liked about an all-ETF portfolio was that it would provide me with both diversification, as there would be at least one ETF in each asset class and each ETF itself could include hundreds of invidivual stocks, and flexibility since I could trade ETFs at any time as I do with stocks. Of course, you can get the same amount of diversification with mutual funds, but not the ability to buy and sell mutual fund shares at any time during the trading day. That’s the advantage of using ETFs than mutual funds.
However, I never act on the idea for one obvious reason: cost. Since ETFs are traded like stocks, there is commission involved in every transaction. If there were eight ETFs in the portfolio, I could be paying a lot if I were to dollar-cost averaging (DCA). And when I first talked about that idea, choices of ETFs in different asset classes were not as ample as there are today, so implementing the idea would be much easier now than in 2007 and much cheaper too. In fact, if I choose all ETFs in my portfolio from Vanguard today, I don’t even have to pay commissions because Vanguard lets its customers trade ETFs for free. So it’s still possible to put the idea into action.
Motif Investing Review
That said, there seems to be a better way to build a portfolio of my own, at low cost, using individual stocks with an investment company called Motif Investing. Unlike other stock brokers, Motif Investing doesn’t offer ETFs, mutual funds, or even individual stocks to their customers. What they do instead is creating a bunch of portfolios, called motif, each of which is “a carefully researched and intelligently weighted portfolio of up to 30 stocks that reflect real-world trends and investment ideas.” So that’s different from ETFs or mutual funds which usually track some kind of indices and have much more underlying stocks. In the case of Motif, you still get the diversification with 30 stocks, but at a much lower cost. There are currently a total 78 motifs offered, constructed based on different investment schemes, such as Biotech Breakthrough, Home Improvement, and Healthy and Tasty, etc. As for the cost of investing with Motif, you can buy one motif in its entirity for $9.95 in commission.
On surface, that $9.95 commission is higher than what other discount brokers charge for one online trade of stock or ETF. But what you will get by paying a higher commission is complete control of what are being invested in the motif. When you buy ETFs, you buy them as a whole, meaning you can’t choose what stocks you want to have in the fund. That’s not the case for Motif though.
There are pre-made motifs that you can buy as a whole, just like buying an ETF. But if you are not happy with how those stocks are weighed in the motif, you will have the ability to change the weights to your desired level. You can even add or remove certain stocks from the motif before buying it with no additional cost, giving you the flexibility of creating a portfolio that meets your investment objective. Once you purchased a motif, you can either keep buying it at $9.95, or trading individual stocks inside the motif for $4.95 per trade. That’s not more than another popular discount broker, TradeKing, charges for real-time online stock and ETF trading and that makes building your own portfolio even more realistic because the ongoing trading cost will not be that expensive to maintain and rebalance the portfolio.
Actually, I like the idea very well because it gives me both diversification and flexibility. The only concern I have is still the trading cost. One way to reduce the cost is making large transactions less often. For example, instead of DCA $1,000 every month (about 1% of the total investment goes to commission), buying $3,000 every quarter, making the commission accounts for only one-third of one percent of total amount invested. And before buying a motif, check every component of the motif to make sure that it only has the stocks that you want to have. From there, further adjustments will be just fine tuning of the portfolio, not a complete makeover.
Motif Account Minimum and $150 Bonus Promotion
If yo also like the way Motif lets you invest, you can open an account with Motif with no minimum balance, though you do have to have at least $250 in your account in order to buy a motif. Further more, between now and November 30, 2012, you can receive $150 bonus if you open an account with $2,000. To be eligible for the promotional bonus, the new account must be funded within 10 days of account opening. Details of the offer are as follows:
The cash bonus offer applies to new, approved Motif Investing brokerage accounts opened between 9/1/12 and 11/30/12 and funded with at least $2,000. The new funds must be posted to the account within 10 calendar days of account opening, and must remain in the account for 45 calendar days. The total bonus will be based on motif trades made within 45 calendar days of funding, as follows: 1 motif trade will receive $50; 3 motif trades will receive $75; 5 motif trades will receive $150. A motif trade is defined as a completed purchase or sale of a motif for $9.95 commission. Individual stock trades will not be considered as part of this offer. The cash bonus will be credited to the account within 30 calendar days after the end of the 45-calendar-day period.
Remember, retirement accounts, such as IRA accounts, are not valid for the promotion and only one promotion bonus per household.
- $150 Bonus
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