Understanding How Motif Investing Actually Works

Motif Investing is a new robo-advisor investment opportunity that is popular with traders who are using it. Traders like the appearance of financial products that are unique on the market. They are known “motifs.” These are quite similar to ETFs (exchange traded funds), securities that are trading a commodity, an index or a set of assets. These are traded like stocks. The motifs bring in a low-risk investment that is interesting. Modest Money tells more about motif in this review.

Basic Facts Of Interest

Motif Investing allows the investor to buy or create motifs with a maximum of 30 stocks or different ETFs that follow a theme. As an example, a tablet motif will include a specific mix of hardware, semiconductor, display stocks, memory stocks and others. As an investor you can control a stock’s weight in the specific motif until reaching a desired portfolio.

You can sign up for the account on the internet and a $250 minimum deposit amount will be necessary. If you want to trade based on margins, you need $2000. Motif Investing charges flat commissions for every motif purchase of $9.95. ETFs or stocks added to a motif that already exists have a fee of $4.95.

Motif Investing Advantages

At the moment the market offers a clear increase in investment strategies and robo-advisors because of the advantages offered. The clear advantage offered by Motif is that the online brokerage house has minimal fees. The investor will be subject to that commission but there is no extra hidden or management fee.

Motif is going to actively rebalance the portfolio that exists with the premade motifs. The process of rebalancing means setting asset weight in portfolios when looking at the original state and when thinking about selling and buying amounts.The advantage in this case is that when you have modest capital available or you look for a secondary investment option, Motif is a great opportunity you can take into account.

Motif Investing Disadvantages

As with every other financial investment option, you will be faced with some disadvantages and risks when looking at Motif. You have to be aware of the trends. The short-term investors that do not manage to do this will find no returns or really little returns.

It should also be said that the dividends obtained will not be subject to a reinvestment. Dividends are paid out and the reinvesting is something that has to be done manually, this bringing in the fee mentioned above for a second time.

Conclusions

Motif Investing keeps growing together with the other robo-advisors. It does offer something that is innovative and it is definitely one option that is suitable for some investors. However, this does not mean it is something that you have to go into blindly. A smart investor always knows everything about the options available and thinks about whether or not a considered opportunity is going to be suitable for them. Focus on that and you will make a good decision.

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Anne Lawson is a British writer who keeps her eye on business and trending issues that affect us all. She loves to delve into the real story and give us interesting tidbits we might otherwise miss.