Motif Makes Investing Social

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Since the 1990s, the online-brokerage industry has seen little innovation. But Silicon Valley startup Motif wants to change that.

Think of the concept as Facebook (NASDAQ:FB) meets investing.

Motif has about 50 types of indices — each following 20 to 30 stocks — with decidedly atypical monikers such as “Mobile Internet Tsunami,” “Recession Resistant,” “Precious Metals,” “Tablet Takeover” and “Drill, Baby, Drill!” And you can track them against the S&P 500 Index to get a sense of their performance.

To buy one of these funds, you pay $9.95. (A fee that is waived for June.) Plus, you can tweak the portfolio by adding or dropping stocks in the index, at a cost of $4.95 per trade (this is if you purchase the fund).

Of course, Motif has nifty social features as well. That is, you can easily share your portfolio with your friends, such as on Facebook, either privately or publicly.

Motif has attracted a variety of industry heavyweights, including former SEC Chairman Arthur Levitt as well as Sallie Krawcheck, who was a top executive at Citigroup (NYSE:C) and Bank of America (NYSE:BAC).

Motif has a great concept. Even with the proliferation of exchange-traded funds, there’s still room to add creative investment themes. And it looks as though Motif plans to offer users the ability to create their own funds.

While I think Motif will get traction, it does carry some risks. After all, it seems natural that investors will mostly focus on the hot areas. But that approach can be vulnerable to big losses. Just look at the recent carnage in the social media space, which has seen plunges in stocks such as Groupon (NASDAQ:GRPN), Zynga (NASDAQ:ZNGA), Yelp (NASDAQ:YELP) and — most publicized — Facebook. Weren’t these supposed to be the companies that would provide investors with tremendous growth opportunities?

For many investors, it’s still better to invest across broad areas of stocks, bonds and even commodities, which should help reduce volatility. And yes, there are many cost-effective mutual funds and ETFs that can help — without making it a frothy game or a social contest that chases the latest fad.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

Tom Taulli is the author of various books. They include Artificial Intelligence Basics and the Robotic Process Automation Handbook. His upcoming book is called Generative AI: How ChatGPT and other AI Tools Will Revolutionize Business.


Article printed from InvestorPlace Media, https://investorplace.com/2012/06/motif-makes-investing-social/.

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