Picking the right online brokerage can be tough with so many options out there. But if you’re looking for more control over your investments and reasonable trading costs, Motif Investing might be a solid choice. Just to clarify, this isn’t a personal endorsement, as I don’t have an account with them. My take is based on careful research.
### What is Motif Investing?
Motif Investing lets you create your own customized investment group, called a “motif,” which can hold up to 30 stocks or ETFs. It costs a flat rate of $9.95 to build and trade a motif, and you have plenty of investment options to choose from. Whether you’re interested in socially responsible companies, industries like tech or healthcare, or trending investment themes, Motif gives you a wider variety of choices than many similar platforms.
Alternatively, if you prefer a simpler setup, you can pick one of their 100+ pre-made motifs for the same flat fee. These motifs cover different sectors and trends, and you can even tweak them to suit your needs after purchase.
Motif also offers single and joint brokerage accounts, as well as fee-free Traditional, Roth, and Rollover IRAs. The minimum investment to start a motif is $250. Depending on how your investment is divided, you might end up owning fractional shares. For margin trading, a $2,000 minimum is required.
### Pros of Motif Investing
One of the best features is the ability to “try before you buy.” You can explore their motif selection and create a watchlist after signing up, all without opening a trading account.
Motif is also very straightforward when it comes to fees. The initial cost to buy or sell a motif is $9.95, and any additional stock or ETF trades within a motif cost $4.95 per trade. There are no management or expense ratio fees, as these are already included in the cost of any motifs that use ETFs.
The platform offers biannual or annual rebalancing for their catalog motifs. If something changes in a motif you own, they’ll let you know, and you can rebalance it yourself for another $9.95.
Another interesting feature is the ability to share your investment ideas with other users on a built-in social platform. Think of it like a private social network for investors, where you can adjust privacy settings to control how much information you share.
### Cons of Motif Investing
One major downside is the lack of an option to reinvest dividends. You’ll only have the option of receiving dividends as cash, or you can choose to invest in stocks that pay stock dividends instead.
Another limitation is the selection of investments. Currently, Motif only offers stocks and ETFs, with no mutual funds or options available yet. It’s unclear if they’ll expand these choices in the future.
Keep in mind that while the fees are relatively low, they can add up, especially with frequent trading. Each trade within a motif costs $4.95, and buying, selling, or rebalancing a motif is $9.95. With a minimum motif investment of $250, fees could start to eat into your profits over time.
### Final Thoughts
Motif Investing could be a great option if you’re looking for unique opportunities to diversify your investments. It works well as a supplementary platform to complement your existing portfolio, giving you creative control and plenty of options to explore.