Author Topic: Motif Investing anyone?  (Read 16256 times)

dionysiandame

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Motif Investing anyone?
« on: October 20, 2012, 04:49:47 PM »
I'll just start by saying this isn't some form of spam or advertising for motif investing [MOD EDIT: Link Removed.], truth be told I liked the idea so much I read as much information on their website as they had available and jumped right in. Normally, they require $1000 to open an account with them but they offered a deal, in September, where you could open an account with no minimums. Drunk, and a little over zealous, on my budding Mustachianism, I pulled $250 out of savings to jump into a motif that looked good to me.

Essentially, you are purchasing a basket of stocks based on a "theme", be it gay friendly, Dogs of the Dow, Too Big to Fail, or even No Bailout Banks. I went with "Bullet Proof Balance Sheets" and customized (you can do this) to fit my taste, dropping any stocks I thought were overvalued or just too damn expensive for my taste (Sorry Google and Apple).

Is anyone else using this platform? If so, how do you like it? Are there any changes you would like to make? What have your returns been like?

I think one of the biggest cons I've found is that you can't purchase individual stocks, you have to find a motif and widdle it down to get what you want, but the variety and options are pretty neat.
« Last Edit: October 20, 2012, 05:05:55 PM by arebelspy »

KingCoin

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Re: Motif Investing anyone?
« Reply #1 on: October 20, 2012, 05:21:43 PM »
It's an interesting idea in theory, but the first two questions a Mustachian should ask are:
1) What are the fees Motif is charging?
2) What leads you to believe that investing in a "motif" is better than investing in the Vanguard Total Stock Market fund?
« Last Edit: October 20, 2012, 05:25:08 PM by KingCoin »

dionysiandame

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Re: Motif Investing anyone?
« Reply #2 on: October 20, 2012, 05:59:35 PM »
It's an interesting idea in theory, but the first two questions a Mustachian should ask are:
1) What are the fees Motif is charging?
2) What leads you to believe that investing in a "motif" is better than investing in the Vanguard Total Stock Market fund?

Motif charges $9.95 to purchase the initial motif and 4.95 per trade after. In my mind it just pays to wittle down motifs until they look like something you want. As far as better, I know don't know so much if it's "better" if "different." If one wanted to invest in companies that say, have women in senior management (No Glass Ceiling motif), or are Gay friendly, there are motifs that fit those particular social aspects. I guess for some, Motifs are a way of "voting" with their investments.

While I still research the companies/funds in the motifs I have in my watch list, the ability to pick and choose based on specifications of my liking, without paying per trade for each stock appeals to me. I've never looked at the Vanguard Total Stock Market Fund, so I have no idea if you are able to do this with Vanguard as well.

DocCyane

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Re: Motif Investing anyone?
« Reply #3 on: October 20, 2012, 07:15:30 PM »
From what I read, they don't automatically reinvest your dividends, and to do so would incur trading fees. I think you'd get "fee"'d to death with this product.

KingCoin

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Re: Motif Investing anyone?
« Reply #4 on: October 20, 2012, 08:04:17 PM »
The fee seems not unreasonable for an online broker, provided you're not very actively trading.  Though, almost any fee becomes extremely onerous with an asset base of $250. $10 is 4% of assets, which makes this a non-viable platform for you.

This kind of investing probably falls into the category of "more complicated than it's worth". Somewhere down the road, you'll probably wonder why you have a few hundred dollars in some quasi-random basket of stocks at some niche broker. Unless you've done some serious research and are gung-ho a certain "motif" for the long haul, it's probably a lot easier to stick to 3-6 low fee asset class based ETF or mutual funds, periodically rebalanced. By picking a "motif" you may be inadvertently concentrating assets in growth vs value, small cap vs large cap, or overweight a particular sector.




Karl

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Re: Motif Investing anyone?
« Reply #5 on: October 21, 2012, 06:11:33 AM »
As already mentioned, this appears quite expensive for your current investment level.  Would it make more sense, and catch most of the ideas that you have mentioned, to build up enough to invest in Vanguard's Social Index Fund VFTSX (expenses = 0.29)?


dionysiandame

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Re: Motif Investing anyone?
« Reply #6 on: October 21, 2012, 06:53:29 AM »
The fee seems not unreasonable for an online broker, provided you're not very actively trading.  Though, almost any fee becomes extremely onerous with an asset base of $250. $10 is 4% of assets, which makes this a non-viable platform for you.

This kind of investing probably falls into the category of "more complicated than it's worth". Somewhere down the road, you'll probably wonder why you have a few hundred dollars in some quasi-random basket of stocks at some niche broker. Unless you've done some serious research and are gung-ho a certain "motif" for the long haul, it's probably a lot easier to stick to 3-6 low fee asset class based ETF or mutual funds, periodically rebalanced. By picking a "motif" you may be inadvertently concentrating assets in growth vs value, small cap vs large cap, or overweight a particular sector.

Hmm, I do understand your point. Truthfully, being new to the platform was precisely why I chose to go with $250 instead of doing the full $1000. $250 is the minimum necessary to invest in one motif. Since I've been a member I've been really happy with the motif I chose. I'm not a day trader, so I have no interest in purchasing stocks just for price pops. I could easily throw another $800+ into the motif I've purchased now (which I tweaked to be value-based through reading financials, looking at dividend yields, and waiting for a good point of entry) and leave it alone, without having to buy into anymore funds. I'm already involved in Vanguards Target Retirement Fund through my 401k (at 20% per pay period.)

I was also interested in the platform and looking to try something a little different since I've fallen out of love with Sharebuilder (this was my first online brokerage from when I was working at theatre nonprofits. LOL!) and didn't know where I wanted to go online broker wise. This actually seemed "easy" to me compared to having to start from scratch researching various companies randomly. At least with the motif, I have some grand idea of what I am looking at and can, from there, omit or add stocks to diversify or strengthen my holdings.

I guess I framed my question weird as I don't recall asking for advice as to what I could, or could not, afford and more what current users think about the platform. While I appreciate the advice, I'm somewhat thrown off by the assumptions made about my "investment level." I guess I mentioned a "newb" dollar amount and that pegged me? I don't know.

Thanks though guys, you all seem really knowledgeable and  I look forward to reading more from y'all around the boards. I'll also check out that Vanguard Total Stock Market and Social Index Fund and see if I'd like to create a post-tax contribution. Awesome ideas!

arebelspy

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Re: Motif Investing anyone?
« Reply #7 on: October 21, 2012, 08:25:47 AM »
I guess I framed my question weird as I don't recall asking for advice as to what I could, or could not, afford and more what current users think about the platform. While I appreciate the advice, I'm somewhat thrown off by the assumptions made about my "investment level." I guess I mentioned a "newb" dollar amount and that pegged me? I don't know.

You're right, you didn't ask for advice, it read much more like an advertisement, which is why I almost deleted the whole post as spam, your first sentence notwithstanding.  ;)

Luckily you made an intro post, so I decided to let it stand for a bit (though some spammers do that too).  Glad to see you're a contributor.

Regardless of asking for advice, I think it's good people share their opinions on it so others can decide from a balanced viewpoint.

In regards to your above statements, there were no assumptions made about you being a "newb," but directly based on info you gave:
Quote
Normally, they require $1000 to open an account with them but they offered a deal, in September, where you could open an account with no minimums. Drunk, and a little over zealous, on my budding Mustachianism, I pulled $250 out of savings to jump into a motif that looked good to me.

Based on all the info given, the fees you're paying to invest that amount is quite exorbitant compared to other possibilities.

No offense was intended by anyone, everyone was trying to be helpful and suggest what they think may be best based on information given.
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dionysiandame

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Re: Motif Investing anyone?
« Reply #8 on: October 21, 2012, 08:58:26 AM »
I guess I framed my question weird as I don't recall asking for advice as to what I could, or could not, afford and more what current users think about the platform. While I appreciate the advice, I'm somewhat thrown off by the assumptions made about my "investment level." I guess I mentioned a "newb" dollar amount and that pegged me? I don't know.

You're right, you didn't ask for advice, it read much more like an advertisement, which is why I almost deleted the whole post as spam, your first sentence notwithstanding.  ;)

Luckily you made an intro post, so I decided to let it stand for a bit (though some spammers do that too).  Glad to see you're a contributor.

Regardless of asking for advice, I think it's good people share their opinions on it so others can decide from a balanced viewpoint.

In regards to your above statements, there were no assumptions made about you being a "newb," but directly based on info you gave:
Quote
Normally, they require $1000 to open an account with them but they offered a deal, in September, where you could open an account with no minimums. Drunk, and a little over zealous, on my budding Mustachianism, I pulled $250 out of savings to jump into a motif that looked good to me.

Based on all the info given, the fees you're paying to invest that amount is quite exorbitant compared to other possibilities.

No offense was intended by anyone, everyone was trying to be helpful and suggest what they think may be best based on information given.

Thanks for responding. Hey, it's better to get a quick "Hi" from a mod then a swift kick in the rear. I probably should have phrased my post a bit better, but I did a forum search and didn't see the topic mentioned. I also wanted to avoid seeming like a long-winded blowhard by including too much financial information. While I don't see what you see, I get what you're saying.

I mean, what do I look like coming in like "Look mofos,I got binders full of benjamins, but I threw some here fo' shigs and tiggles!" (that was a joke and I don't think my humor translates well online.)

As someone once said, "It's all good in the hood."

Thanks for having me.

grantmeaname

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Re: Motif Investing anyone?
« Reply #9 on: October 21, 2012, 07:30:54 PM »
It seems like the consensus so far is that this product just isn't quite practical, but given that ethical investing is a continuous topic of discussion with no clear answer as of yet, I think we should be more welcoming of the progress that's being made in a direction we all want to go.

arebelspy

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Re: Motif Investing anyone?
« Reply #10 on: October 21, 2012, 07:45:43 PM »
Yeah, I do like the idea quite a bit.

If Vanguard, or some other similar company owned by its investors, set it up, it had some real potential.
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KingCoin

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Re: Motif Investing anyone?
« Reply #11 on: October 22, 2012, 12:03:55 AM »
Yes. Despite the fact that the original post seemed like fairly blatant marketing copy, I do like the idea of investing in a diversified "idea" or "philosophy" without having to execute and monitor 30 individual trades.

However, once you restrict your investments to only incontrovertibly ethical securities, it's hard to find almost any suitable vehicle. Maybe Government/Municipal Debt is out because you don't want to support foreign wars and an expanding deficit. Precious metals and their miners are out because you're stripping the earth for ultimately near valueless elements. REITs support tons of suburban strip malls and useless crap storage facilities. Get ready to invest way more time than you have to deciding whether each company in your equity portfolio is putting ethics above profit.

If you decided to invest heavily in solar or wind power companies during the last few years, your portfolio's been carried out on a stretcher.

I ultimately like the idea of investing like a statistician, and consuming like someone who cares. If you invest in BP and Monsanto, but only consume wind power and organic, you can "bet" that eventually big energy and big ag will start investing their considerable resources into more sustainable production methods.
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dionysiandame

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Re: Motif Investing anyone?
« Reply #12 on: October 22, 2012, 07:17:25 AM »
Yes. Despite the fact that the original post seemed like fairly blatant marketing copy, I do like the idea of investing in a diversified "idea" or "philosophy" without having to execute and monitor 30 individual trades.


I'm going to take that as a compliment to my writing. I don't know the forum "tone" yet so I have no idea when someone is being tongue in cheek or is just being a jerk.

Hyperion would like to say: You're welcome. (Borderlands II reference. The hubby and I have been playing nonstop since the game dropped.)

It took me awhile of reading reviews to decide that I was interested in Motif enough to give it a try and, in a world of woulda-coulda-shouldas, it is very nice to come across a brokerage that decided to step outside of the mold and come at stock selection from a different ngle. As far as it not being "quite practical" well...everyone has different ideas of what's practical and what isn't. I try to convince DH that stepping out of his clothes and leaving them by the side of the bed is not practical; so far we're at a stale mate.

I also think it can be a good platform for getting people "into" investing who may have considered doing the research too daunting a task, as I said before, the motifs only wittle down; but it's ultimately up the investor to add or remove stocks based on their political/ideological/religious preference. I haven't seen a "Christian Owned" motif yet but, this is America, so I'm sure someone will suggest it soon enough. *eye roll*

Or a Hipster Motif. I don't know though...considering the investors would totally have known about the companies before anyone else and would pull out the moment the motif became "too mainstream", it might not last very long.





momo

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Re: Motif Investing anyone?
« Reply #13 on: October 24, 2013, 08:57:13 AM »
Have any other Mustachians used Motif Investing?  Quite curious to hear all perspectives from others especially if they've done comparisons with Vanguard index funds involving the performance and fees, etc.  Thank you. :)

dragoncar

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Re: Motif Investing anyone?
« Reply #14 on: October 24, 2013, 08:58:49 AM »
I noticed they are running some kind of sign up bonus now.  I think its $150 if you do five motif trades, but not sure it's worth the trouble

KingCoin

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Re: Motif Investing anyone?
« Reply #15 on: October 24, 2013, 10:14:33 PM »
Despite fairly inflammatory articles like this one:
http://blogs.reuters.com/ben-walsh/2013/03/12/disrupting-the-market-for-helping-people-lose-money/
I think it's fair to say that Motif is neither savior nor Satan. It's just another way for people to express their view that they can beat the market. Stock picking has failed, actively traded mutual funds have failed, the fee charging advisor has failed, so why not promote a new stock picking strategy that has yet to lose its bloom?

The problem with individuals trying to pick "themes" to beat the market? It's natural to chase performance and hype, even when dressed up as insight. If Motif existed in 1999, what would be the popular motifs? Almost certainly internet stocks. You could have justified it by saying, "the internet is here to stay and it's going to change the world!". You would have been right, and you would have lost almost all your money. Ditto for almost any theme you would have picked in 2007.