Motif Investing: Good for Low Budget Investors, But Not for Traders or Larger Investors

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Key points in this video:

1. Motif investing allows individuals to essentially create their own ETF — a themed basket of stocks that is set to whatever weighting they want. Motifs can have up to 30 stocks and can have required investment amounts as low as $250 — and thus is a way to achieve ownership of fractional share amounts of many stocks while paying just one commission fee.

2. Motifs cost $9.95 USD per side. Single stocks can also be purchased for $4.95 per side.

3. Motif Investing also has a relationship with JP Morgan, whereby they can provide their customers with access to IPOs that JP Morgan has underwritten. Investors can participate for as little as $250. The share price will not be known beforehand; rather, investors must specify the dollar amount they wish to invest. This provides them with access to the official IPO price — the last price before the stock begins to trade on exchanges.

4. Motif does not allow any type of orders aside from market orders and sell stop orders (aka stop loss orders). This is likely to be a dealbreaker for many traders.

5. Motif does not have a dividend re-investment program. This could be a dealbreaker for many investors serious about income investing.

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