There are trends in the stock market that may be identified as longer-term megatrends. In the 1950s and the 1960s, the megatrend was plastics, which was a new industry at that time. In the 1970s, it was personal computers. In the 1980s and the 1990s, it was the commercialization of the Internet. In the 2000s, it was selling stuff online. From 2010 on, it was solar power, smartphones, and robotics. Now, it is artificial intelligence and the Internet of Things (IoT).
Another word for a trend is a “motif.” When choosing investments based on a motif there is an underlying theme. Investments that are selected, which follow a specific motif, are related in some important way.
Motifs based on an industry sector include green technology, financial services, healthcare, retail, and travel & entertainment. Motifs may also be determined by investment class, such as small cap stocks, real estate, and dividend-paying companies. Another popular group of motifs are social investments that include socially-responsible companies and investments in developing countries. Motif investing offers a fun way to invest that is also financially attractive.
The Motif Investing Company was founded by Hardeep Walia in 2010 with the concept to offer thematic investing. It is based on a simple, yet very human, way of thinking about the future by considering long-term themes for choosing investments. We talk about the best short term investments in a different article.
How Motif Investing Works
Open an online account with the Motif Company with a minimum amount of $250. Choose from over 150 motifs that were designed by investment professionals. Investors can also select from thousands of motifs created by other Motif members or create one of their own.
A motif can hold up to 30 different stocks. The stock allocations are a percentage weight for each stock in the entire portfolio. Every motif is customizable. If investors do not like a particular allocation, it is easy to change it. Stocks can be added or removed from a motif and the percentage allocation easily adjusted.
One significant attraction for investing in motifs is the low-cost fee structure. Buying a motif is the equivalent of investing like a mutual fund in up to 30 different stocks at the same time for a single trading fee.
There is a flat fee of $4.95 for an automatic investment trade for an entire motif. This means that the fee per stock trade for each company can be as low as $0.16 each. That is a fantastic bargain. This can save an enormous amount of money that would otherwise be wasted on trading fees. For next market open trades, the fee is $9.95 for a motif. For real-time trades, the fee is $19.95 for a motif.
These prices are very attractive when compared to other online brokerage systems. For example, if an investor uses a discount brokerage that charges $9.99 per trade this would rack up about $300 in fees when buying 30 different stocks. Even if the trades are $4.95 per stock, trading a motif bundle of 20 to 30 stocks would cost over $100 using other online brokerage firms.
Trading in an individual stock or an exchange-traded fund (ETF) on Motif is free if done as a next market-open trade. Real-time trades of individual stocks or ETFs are $4.95 each. This means an investor is not limited to only buying or selling an entire motif. An investor pays a small $4.95 fee to trade just a single stock or ETF in order to add it or remove it from a Motif portfolio or can trade it the next day at market open for free.
An attractive feature of the Motif system is the ability to trade a fractional ownership in a share. For example, not everyone can afford to buy even a single share if it sells for around $1,500 or more each. With the Motif system, it is possible to own a portion of a high-priced share as part of ya Motif portfolio.
Performance of Motif’s Thematic Portfolios
Motif has a professional team of stock analysts that create Motif portfolios to benefit investors. The highest performers range from 20% to over 40% in annual returns.
Motif designs portfolios by following these steps:
1. Trend Identification
Using advanced data mining techniques the Motif artificial intelligence software searches through many terabytes of data to identify economic trends
2. Data Set Analysis
Algorithms are applied to the data mining to find companies with exposure to these mega trends.
3. Motif Construction
Companies are selected for each Motif portfolio using proprietary, systematic, rule-based methods.
Motif Construction Detailed Parameters
Professional Motif construction follows a thematic idea and then constructs a motif portfolio of qualified companies according to industry segments, giving each segment a percentage weight in the portfolio.
For example, under the thematic category of Financial Services, there is a motif called “Too Big to Fail.” It has 19 stocks in it that are considered by many to be so large that the U.S. government would never allow them to fail. The reason is that any failure of these companies would put the entire U.S. economy at the risk of collapse. The percentage allocations in this motif are 37% for financial conglomerates, 33% for retail banks, 21% for banks, 4% for diversified financial institutions, 3% for custodial banks, and 2% for investment banks.
Investing in this motif is counting on a U.S. government bail-out of any of these 19 companies if they get into financial trouble. During the 2008 economic collapse, the U.S. government gave them the benefit of a $700 billion Troubled Asset Relief Program (TARP). Since that time, these institutions have grown even larger. Current (November 2018) annual returns for this motif are 2.9%.
When reviewing a motif to see what stocks are included, the summary information shows the stocks and the percentage allocations by industry sector and for the individual company. It also shows the current share prices, the last trading day’s percentage change (up or down), the dividend yield, and the annual return.
If investors do not like a particular stock in a motif or want some other one to be included, it is easy to add or subtract a stock from a motif to make a customized version. Also, the percentage allocation of an individual stock can be adjusted up or down.
Motifs are divided into general categories to make it easier for investors to browse them and evaluate the investment returns. There are over 12,000 community-created motifs that are ranked by popularity. They can be screened for daily change, one-month returns, annual returns, and dividend yield.
The thematic categories with Motif examples and current (November 2018) best-performing one-month returns are:
- Bear Market Scenarios: Bear US Sectors (up 7.3%)
- Bonds: US Treasury Ladder (up 0.8%)
- Corporate Events: Tax Inversion Targets (up 0.6%)
- Current Events: Democratic Donors (down 2.3%)
- Developed Markets: QE Japan (down 2.3%)
- Dividends: Dividend Stars (up 3.5%)
- Emerging Markets: Emerging Markets Consumer (up 0.6%)
- Energy & Natural Resources: Climate Change (up 5.2%)
- Financial Services: Too Big to Fail (up 2.7%)
- Fundamentals: Stable Earnings (up 3.3%)
- Green Investing: Climate Change (up 5.2%)
- Healthcare: Senior Care (up 2.7%)
- Investing Classics: Ivy League (up 0.2%)
- Political Themes: Kings of K Street (down 0.5%)
- Real Estate: Office Space (up 5.1%)
- Retail: Junk Foods (up 8.0%)
- Social Causes: Gay Friendly (up 0.8%)
- Technical Analysis: Low Beta (up 5.7%)
- Technology: Connected Car (up 7.5%)
- Third-Party Models: 7Twelve® Core Portfolio (down 1.5%)
- Travel & Entertainment: That New Car Smell (up 6.0%)
Show Me the Money!
For those who prefer to leave the decision-making to the professionals, the top performing motifs created by the financial analysts working with the Motif Company are averaging over 20% annual returns up to over 40%. These thematic portfolios are available to investors for a 0.5% annual fee with no ongoing commissions.
Here are the big winners currently (November 2018) showing the returns for 2018 so far:
- Up 47.6% – Repeal Obamacare
- Up 33.4% – Obamacare
- Up 31.6% – World of Sports
- Up 27.5% – Small-Cap Stars
- Up 25.9% – Kings of K Street
- Up 24.3% – Used Car Tune-up
Other popular motifs designed by the Motif Company that are doing well right now include Bear US Market, Connected Car, Cyber Security, High-Yield Dividend, and Robotic Revolution.
Motif also offers Impact Portfolio, Target- Date Motif, and Fixed-Income Motif choices with an annual fee of 0.25% and no ongoing commissions.
Horizon motifs have no annual fee and no commissions. The Horizon motifs are based on the Modern Portfolio Theory (MPT) that comes from the research of Nobel-Prize winner Harry Markowitz. MPT is used to select ETFs that provide diversified investments across large classes of assets. These investments offer annual dividends and provide modest overall returns. They are most desirable for highly risk-averse individuals and institutional investors.
Currently (November 2018), Motif offers the following Horizon Motifs that have these dividends and annual returns (which include the dividend payments):
- One-Year Conservative Motif:: Dividend Yield 2.6% – 0.92% Total Annual Yield
- Five-Year Conservative Motif:: Dividend Yield 2.6% – 1.1% Total Annual Yield
- 15-Year Conservative Motif:: Dividend Yield 2.7% – 0.99% Total Annual Yield
- One-Year Moderate Motif:: Dividend Yield 2.4% – 2.92% Total Annual Yield
- Five-Year Moderate Motif:: Dividend Yield 2.6% – 1.84% Total Annual Yield
- 15-Year Moderate Motif:: Dividend Yield 2.7% – 1.56% Total Annual Yield
- One-Year Aggressive Motif:: Dividend Yield 2.4% – 3.30% Total Annual Yield
- Five-Year Aggressive Motif:: Dividend Yield 2.6% – 2.09% Total Annual Yield
- 15-Year Aggressive Motif:: Dividend Yield 2.6% – 1.62% Total Annual Yield
Motif uses the state-of-the-art financial industry standards for encryption and data protection. Each account is covered by insurance through the SIPC of up to $250,000 in cash claims or $500,000 in account value and by additional insurance of up to $1.9 million per account by Lloyd’s of London.
Social Media Connections
Motif members are encouraged, but not obligated, to share their investment ideas and experience with each other. Building motifs and watching the performance over time is a fun and exciting thing to share with others. Some motifs made by members show outstanding performance results and develop significant followers.
Social Awareness Investing
An appealing investment style for many, especially millennials, are investments that are screened for social awareness. Motifs can be constructed that use more than bottom-line profits as the model for investment choices. Investors may prefer to avoid or embrace companies that make certain types of products or work in certain industry sectors. Social awareness themes are popular as motifs on this system.
Motif offers some attractive special features, which include:
- No Fees for IRA Accounts: This includes traditional IRAs, Roth IRAs, and Rollover IRA accounts.
- Target-Date Motifs: These motifs are designed to work over the long-term until a specific date in the future chosen for retirement.
- Fixed-Income Motifs: These motifs are designed to use bond ETFs to create a fixed-income portfolio based on bond returns.
- Automatic Investing: Investors can set up an automatic investing program to benefit from dollar-cost averaging and to manage the rebalancing of portfolio exposure.
- Real-Time Trading or Delayed Trading: Trade in real-time when markets are open or put in an order for next market open trades.
- Intuitive Trading: There is the option to trade in either shares or to use dollar amounts.
Many find motif investing very fun and rewarding. It makes choosing stocks easier and helps demonstrates the value of long-term investing by having a diversified portfolio that also follows mega trends. Motif investing is not as good for the day trader who thrives on volatility and constant trading. It is more suitable for the regular longer-term investors, even those of modest means who want to build up a solid investment portfolio over time.
General Motif Investing Questions
This section answers the general questions you have about Motif Investing. Use this information to get a good understanding of the company and how it works.
What Is Motif Investing?
Motif Investing is a combination of a broker and a robo-advisor. They offer trades, including fractional share trades, as well as other unique investment options.
How to Use Motif Investing?
There are several ways you can use Motif Investing. You can use them as a brokerage firm for $4.95 per trade, or to trade in themed collections of up to 30 companies. They also offer an automated investing and rebalancing service.
Does Motif Investing Work?
Lots of people like it. The idea of investing in a theme of companies lets you take advantage of general industry movements while balancing the risk of investing in just a single company.
Is Motif Investing a Good Idea?
It can be for many people. If you want to trade on themes rather than individual companies or giant mutual funds, then Motif might be a good option for you.
How Motif Investing Works?
Motif’s unique service of trade motifs works by assembling a themed collection of up to 30 stocks or ETFs for you to trade in. This lets you invest in a theme rather than a single company.
How Does Motif Investing Make Money?
Motif makes money on their commissions and subscription services. You’ll pay $4.95 per share and $9.95 to $19.95 per motif that you trade.
Is Motif Investing Working with NASDAQ Only?
No, the motifs that Motif puts together cover all major US exchanges, including NASDAQ and the NYSE. You can also select your own stocks by building your own Motif.
How Much Money Can I Make with Motif Investing?
There’s no way to know – investments are always risks. If your risk pays off big, then you can make a lot of money with Motif. If your investment falls through, then you could lose money.
How Big Is Motif Investments?
While their value can change at any time, as of this writing Motif has more than $116,000,000 under management, which makes them a decent size investment firm.
Is Motif Investing a Public Company?
No, according to Bloomberg, Motif is a private company that is headquartered in San Mateo, CA. They operate on all major US stock exchanges.
Who Owns Motif Investing?
There’s no public information on who owns Motif investing, as it is a private company. However, Mr. Hardeep Singh Walia is the Founder and CEO and Mr. Paul Frederic Schmidt is the CFO.
How Long has Motif Investing Been Around?
Motif was founded in 2010. Prior to that the company operated under the name FundDNA.. That means it has been in operation for 8 years as of 2018.
When was Motif Investing Founded?
Motif Investing was founded by Mr. Hardeep Singh Walia in 2010. They’re headquartered in San Mateo, CA. They formerly went under the name of FundDNA.
How Much Income Can I Get from Motif Investing?
That’s up to you. Motif is a platform that lets you invest in different groups of stocks. If you pick well, then you can make a lot of money. However, there’s always the risk your investment will lose money.
How Much Does It Cost to Invest in a Stock Motif Investing?
There’s no minimum to open an account with Motif, but you’ll need at least $250 in your account to start trading. If you want to buy on margin, then you’ll need a $2,000 balance.
How to Self-Invest in Stocks in Motif Investing?
All you need to do to start self-investing in stocks with Motif investing is sign up for an account. After that, you can create your own motif or pick from individual stocks to trade.
Which is better Motif Investing or Sharebuilder?
Sharebuilder is losing support and backing from its major driver – Capital One. Many people have said their Sharebuilder accounts are being sold to other platforms – we recommend you go with Motif.
Motif Investing Safety
Like any investment, people have lots of questions about Motif Investing Safety. We’ll answer those questions here.
Is Motif Investing Safe?
Yes, Motif Investing is a fully accredited and legitimate brokerage firm. That means they use the highest level of encryption to handle your trades and personal information.
Is Motif Investing Legitimate?
Yes, the company manages over $116,000,000 in assets and have been in operation for more than 8 years. That means they’re not a scam or fly-by-night operation.
Is Motif Investing Worth it?
That depends on your personal financial situation and investment strategy. If you like the idea if assembling a theme to invest in rather than focusing on a specific ETF or stock, then Motif could be worth it. In the meantime you may also want to check out our Stash Investing review as another possible option.
Is Motif Still Good Investment?
Whether or not motif is a good investment depends on your particular investment strategy. It’s a good investment if you like to trade on broad themes instead of worrying about individual stocks and ETF’s.
Motif Investing Account
Here you'll find relevant information concerning Motif account management and other options.
How to Delete Motif Account?
First you’ll need to zero-out the balance in your account. Motif won’t close accounts with a balance in them. After that, just email [email protected] to close your account.
How Long Does it Take for Cash to Clear a Trade on Motif?
It can take two days for cash to clear a trade on Motif – that’s the industry standard due to SEC regulations to prevent fraud and money laundering.
How to Switch Money from Edward Jones to Motif Investing?
You’ll need to withdraw money from your Edward Jones account to move it to Motif. You can initiate an ACH transfer to move your balance to a bank, and then reinvest it in you Motif account.
How to Add Friend in Motif Investing?
You can add a friend by sharing your Motifs with others. Next to your Motif there is a sharing icon, by the watchlist. Simply click this to start adding friends.
How to Find Taxes on Motif Investing?
Motif will send you a 1099 form for any profits you made through the company’s services. This form will arrive by the legally required time.
Why Can’t I Withdraw Funds?
The two biggest reasons you might not be able to withdraw funds are that either your trade hasn’t settled yet, or that the money hasn’t been in your account long enough.
How to Import Stock in Motif?
Motif doesn’t accept transfers of investment accounts from other brokerages. You’ll need to liquidate your holdings, transfer that cash to Motif, and re-invest.
How Can I Withdraw from My Motif Account?
You can withdraw funds by ACH transfer, wire transfer, or check. Go to your account tab on your dashboard to find the option to “withdraw” to start the process.
Why is there a %22Withholding%22 on My Motif Account%22?
The “Withholding” on your account is money being set aside for taxes based on the preferences that you selected when you set up your account.
Why Can't I Use All My Funds to Buy Stock in Motif?
Generally, the reason you can’t use your funds is that they haven’t settled from a previous trade. It’s also possible that the money you want to use hasn’t been in your Motif account for enough time yet.
How to Cancel Wire Transfer Motif Investing?
You can edit or cancel a recurring wire transfer by going to the Account Tab of your Motif account. Click on transfer money and you can edit or cancel by clicking on the link below the scheduled transfer.
What is a Motif Low Balance Account?
A Motif Low Balance Account is a type of account that operates with a lower balance than most other investment accounts. That’s because you can start trading with as little as $250 with Motif.
How to Reinvest Dividends in Motif Investing?
It depends on the type of dividend. Motif will automatically add stock dividends to your portfolio. Cash dividends are added to your account, so you can reinvest them there. You could also move them to a high yield savings account and if you're looking for a new bank account to open take a look at the best bank bonuses.
What Does Motif Investing Do with Dividends?
Motif adds cash dividends to your account balance. If your stock offers a stock dividend, then it will be automatically added to your portfolio.
How to Short a Stock on Motif?
The best way to short a stock on Motif is to use the short Motif. This Motif has a collection of stocks and it takes a short position on them.
How to Use Motif Cash to Buy More Stock?
Motif Cash goes into your brokerage account with the company. All you need to do is find more stocks to buy and pay for them from your account. You could also use the cash for other types of investments such as money market accounts. Take a look at the best jumbo money market rates.
What Happens if Motif Investing Site Goes Down?
If the site goes down then you’ll need to wait to place your order. You can call their customer service line if you have any questions about the site’s stability.
How do You Find the Price of a Stock on Motif?
You can find the price of a stock on Motif by navigating to the section of your account that enables trading. Then, just search the stock symbol of the stock you’re looking for.
Other Motif Investing Questions
This section contains the answers to Motif Investing questions that don’t fit into our other categories.
Can I Invest in a Roth IRA Through Motif?
Yes, you can open a Roth IRA, Traditional IRA, or Rollver IRA with Motif Investing. As a result, they can be a good option for your retirement funds.
Can I import to TurboTax a Closed Motif Investing Account?
Yes. When you’re in TurboTax you can download your forms directly to the tax preparation service. Select Motif Investing, INC as your brokerage and click the continue button to import your information.
What Is the Tax ID for Motif Investing?
Motif’s Tax ID is not publicly available. It’s a private company, so they don’t need to file the types of forms that would put their Tax ID in the public domain.
How to Trade After Hours in Motif Investing?
Motif doesn’t offer after-hours trading. Instead, you can choose a trade to execute at next-market open. The trade will execute at 9:30 AM the next time the market opens.
What Does Motif Investing Do with Dividends?
If a stock in your motif pays a stock dividend, then motif automatically reinvests the dividend back into your motif. They don’t offer cash dividend reinvestment at the moment.
How to Build Motif Investment Portfolio?
You can build your own motif by searching for stocks related to a theme. You can add them to your custom motif and assign a weight to each stock. Motif offers intelligent weighting strategies to help you weight your investments.
When will Motif Investing Offer a DRIP?
Motif already offers DRIP services. You can find out more and set up your DRIP preferences by clicking on this link.
Which Card to Use with Motif Investing?
That depends on your possibilities. You can contact their customer service department to see if there are any restrictions on cards, or pick the card that will get you the most cash back.
When Does Motif Have Trading Deals?
Motif doesn’t have any published information about trading deals they’re offering. We recommend creating a free account with them to get more information.
How Does Motif Investing Handle Acquisitions?
Acquisitions are governed by SEC rules. Motif will abide by and follow all rules when it comes to handling any acquisitions. They also offer a Motif of acquisition targets for you to invest in.