New Brokerage Idea

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chufinora
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New Brokerage Idea

Post by chufinora »

This is a new idea (to me) that looks to be a promising development for low cost DIY investors. At this time only for those living south of the border. it is a US based company, you cannot open an account from Canada today but perhaps the idea will spread to Canada if they are successful.

www.motifinvesting.com

The concept is you have an account that lets you buy a collection of up to 30 selected stocks that you create, or are created by others (Motifs) such as "Dogs of the Dow" collection. For one $9.95 commission you buy shares and fractional shares in the companies in the Motif. From what I can see you own the fractional shares but can only sell or buy more of the full "Motif". For younger investors with smaller accounts it looks like a very good way to buy a good portfolio, without the fractional costs of ETF's. Perhaps others can find the catch/flaw, I could not. This would have been great back when I was starting out buying individual stocks at $29.95 a trade (Which was cheap compared to full service broker) the concept of buying 30 stock portfolio for $9.99 is impressive.
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Shakespeare
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Re: New Brokerage Idea

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twa2w
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Re: New Brokerage Idea

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Doesn't Canadian shareowner so something similiar. They don't do the model for you and only have limited selection but I know for a while you could buy a basket of stocks monthly for one commision.
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Re: New Brokerage Idea

Post by parvus »

They do have model portfolios, including ETF portolios, and I believe they allow for some degree of customization.
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chufinora
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Re: New Brokerage Idea

Post by chufinora »

I looked over the Canadian ShareOwner site and yes it is similar, but it is not 'packaged' or 'marketed' very well. In addition a portfolio trade is $40 vs. $9.95 for the US site and other costs do not seem competitive with the big online brokers.
It also does not have the social media aspect that the US site has - you can see and review different portfolio themes that others have created (And an interesting twist - whenever someone purchase a portfolio that you created you get a $1 kickback) these sort of things will IMO appeal to younger investors. I read an article where the CEO of Motif described it as "E-Trade meets Facebook meets Mint.com" (Scary concept to someone over 50 :-)
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Re: New Brokerage Idea

Post by ig17 »

I have mixed feelings about Motif Investing. I like their sleek technology. The platform can be useful in the hands of an experienced investor.

On the other hand, their marketing encourages performance chasing. They seed hundreds of portfolios. Next, they pick a few that did well recently and promote the hell out of them. Mutual fund industry would be proud.

Their front page promotes one year returns. Shale Oil ... 45.8% ... wow!!!

But why stop there. They promote one month returns here. Social Networking, 3D Printing and Precious Metals did amazingly well last month. :roll:

I think such marketing is borderline sleazy. I would never recommend them to a novice investor.
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