I have started looking into motifinvesting.com recently. The concept is interesting. You can select some stocks (1-30), create a "motif" and invest money in the motif. There are also a lot of motifs created by motifinvesting and the community, representing ideas like Chinese Solar, Biotech, 3D Printing, etc.

I find it interesting because:

  1. It allows fractional ownership of stock.
  2. You can put in $1000 (or any other amount) and precisely define portion of the fund that goes to each of the stock.
  3. You own the underlying stock. They don't offer DRIP (Dividend Re - Investment Plan) yet.
  4. Diversification!
  5. Commission is only paid while buying the motif first time ($9.95) and same for every rebalance.
Example:

If you have $1000 to invest and you want to put 10% in BABA 25% in GOOG  25% in AAPL and rest in Banking, You can create a motif (or look for one that matches what you want) that has above configuration and put your $1000 in that. Now, even if the individual stock is worth more than the money you have, you will be able to invest.

  1. With 25% in AAPL (with stock worth $100), you get 2.5 stocks of AAPL
  2. In spite of having proportionately less amount compared to cost of stock, you were able to precisely put the exact amount you wanted.
  3. Any dividend paid will me added to your account.
  4. Investment is made into all the stocks you planned to have. After learning from my early days as investor, I am a firm believer in diversification.
  5. Commission is paid only once and that gets you exposure to exactly what you wanted.

You may ask, how is this different from a mutual fund? Well, it does come close but is very different. Mainly because:

  1. Here, you have direct control over what you are buying.
  2. Rebalances are optional. If a motif gets rebalanced, you may continue holding what you have.
  3. Mix and match. If you like a motif but there is this one company you will not like to own or add something, you can change it for yourself before buying.
  4. Then there is this community. Making motifs and surfacing ideas, industries, etc.

I am planning to put some portion of my investment money into a motif that I have been working on, or "Dogs of the DOW" strategy. My aim will be to put money in stable companies that pay good dividends. This keeps on adding cash to be invested in other opportunities and also capital preservation.