8 Reasons Why The Best Online Brokerage is Motif Investing
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We’re going to start this out by telling you that not only have we been using the Motif Investing platform for years now, but we also have an affiliate relationship with Motif Investing which means if you open an account with them we’ll get a kickback. If you’re a regular reader of Nanalyze, you’ll know that we value our integrity and have a commitment to our readers to never sugar coat things or dance around the facts. This means we don’t partner with companies whose products we don’t believe in. We’ve been using Motif Investing for years now because we believe they are the best online brokerage firm there is. Seriously, we love them.
The two best online brokerage firms out there right now are Motif Investing and Interactive Brokers, both of which we tell everyone we know to use. If you do any currency transaction and you aren’t using Interactive Brokers, you’re losing money. If you’re a retail investor and you’re not using Motif Investing, you’re losing too much money on transaction costs. While we put both Motif Investing and Interactive Brokers as the two best brokers out there, we’re giving Motif Investing a slight edge and saying it’s the best online brokerage firm out there right now. Here are 8 reasons why.
Cheapest Online Brokerage
Transactions costs suck. While Interactive Brokers has the cheapest transaction costs out there for trading individual stocks, Motif Investing is second cheapest at $4.95 to trade a single stock. Seriously, if you are paying more than that per trade then you are losing money and you should switch over to Motif Investing. If you invest in lots of stocks and/or ETFs for diversification as you should, you can bundle them all together and trade up to 30 stocks or ETFs for $9.95 a trade or 33 cents per trade. That’s a third of the cost of trading these stocks individually at the “cheapest discount broker” out there which is Interactive Brokers.
Pre-IPO Shares
This offering from Motif Investing made us all excited because no other full service online brokerage firm has offered this yet. The company plans to offer investors the opportunity to buy pre-IPO shares in JP Morgan led IPOs. How cool is that? The problem is that they made that announcement a while back and still haven’t had any pre-IPO share offerings. We’re waiting guys.
Motifs
A motif is a basket of up to 30 stocks and/or ETFs that you can then trade like a single stock. We actually find it more useful to use this tool to benchmark certain themes. Here’s a look at some of the motifs we’ve created and their performance to-date:
- Nanalyze 3D Printing Stocks (Created 6/6/2015) -24%
- Nanalyze Cancer Immunotherapy Stocks (Created 6/6/2015) -32%
- Nanalyze Solar Stocks (Created 6/6/2015) -60%
- Nanalyze Cancer Stem Cell Stocks (Created 6/11/2015) -52%
- Nanalyze Fuel Cell Stocks (Created 6/13/2015) -55%
- Nanalyze Synthetic Biology Stocks (Created 6/13/2015) -40%
- Nanalyze Home Automation Stocks (Created 7/15/2015) +54%
- Nanalyze U.S. Traded YieldCos (Created 8/3/2015) -14%
- Nanalyze Lithium Mining Stocks (Created 8/15/2015) +42%
- Nanalyze RNA Therapeutics Stocks (Created 8/26/2015) -28%
- Nanalyze Liquid Biopsy Stocks (Created 1/14/2016) -19%
- Nanalyze Electronic Medical Record EMR/EHR Stocks (Created 2/8/2016) +1%
- Nanalyze Robot Stocks (Created 3/4/2016) +18%
- Nanalyze Buttermint Motif (Created 4/4/2016) +6%
- Nanalyze Freight Trucking Stocks (Created 4/27/2016) -5%
- Nanalyze Cyber Security Stocks (Created 9/9/2016) +2%
- Nanalyze Medical Robot Stocks (Created 9/9/2016) +5%
- Nanalyze Gene Editing Stocks (Created 9/15/2016) -9%
The other cool thing is that if someone buys one of your motifs, you get $1.00 credited to your account. We have created quite a few motifs on the platform and make a few dollars here and there on people buying our motifs but it’s not anything too meaningful. What we’re trying to say is, don’t expect to make a great deal of money from other people buying your motif(s). There are a lot to choose from and most people would probably find it more useful to just create their own.
New Subscription Plan
Motif Investing recently came up with 3 different subscription plans which offer you a number of ways to save money. For $4.95 a month you can automatically invest every month in 1 motif and have it auto-rebalanced for free. For $9.95 a month it changes to 3 motifs, all motifs are rebalanced for free, and you get one free stock or ETF trade per month. For $19.95 a month the number of free trades moves to 3 and you can get “unlimited next market open trades”. That’s a huge perk. Unless you’re some sort of professional trader, it doesn’t really matter that you have to buy at a market open price you’re unsure of.
Retirement Accounts and Instant Funding
If you already have an online brokerage account, Motif Investing will cover all your transfer fees to move it over. Motif supports all types of retirement accounts. As for funding, you can open an account without funding it at all and just use Motif Investing for benchmarking. If you do decide to fund an account, they offer instant transfer so once you link your checking account you don’t have to wait for days for the money to transfer over. In addition to the retirement account bonus, there is also a bonus for opening a normal online brokerage account. If you transfer over at least $2,000 and trade 5 motifs they will give you $150. Click here to take advantage of that offer.
Robo Advisor Services
While robo advisors are not online brokerage firms, they still serve the purpose of enabling retail investors to easily setup retirement investment plans. We covered this topic before when we compared Betterment to Motif Investing. As we mentioned before, we think that robo advisors are a gimmick until they begin to incorporate some proper artificial intelligence. There is nothing you can’t do with Motif Investing that a robo advisor offers. You can create your own retirement motif with a collection of diversified ETFs and the cost will be cheaper over the long run as we pointed out before.
Customer Service
It should be a given that you get good customer service and an easy-to-use interface with your online broker. Unfortunately, this isn’t always the case. While Interactive Brokers gives you dirt cheap transaction costs, you won’t be blown away by their online trading interface or their customer service. Motif Investing does a good job of making their platform accessible to retail investors and not just assuming everyone is an expert trader.
No Penny Stock Trading
Inevitably some user of Motif Investing is going to try and buy an over-the-counter stock and find out they can’t. We can’t say enough how great that is. Every brokerage firm should refuse to deal in OTC stocks because they are rife with scams. Sure, you can speculate in OTC stocks and ride the waves like everyone else does, but no serious investor would ever invest in OTC stocks. So if you’re looking to fund your future retirement by speculating on OTC stocks, this platform isn’t for you.
Share
3 Reasons this article is just not true:
1) Although Motif has been claiming they offer Pre-IPO shares for almost a year now there has never been a single pre-IPO share offered to any Motif customer. But pre-IPO shares aren’t the only thing Motif has been bragging about on CNBC that it didn’t deliver. How about shorting? anyone interested in DRIPs?
2) $4.95 a month sounds cheap but have you ever heard of a brokerage charging you money to deposit money??
3) “There is nothing you can’t do with Motif Investing that a robo advisor offers”. How about tax loss harvesting? Short term capital gains rates could be as high as 39.6% in 2015. If you’re planning on taking advantage of their monthly subscription service 39% is going to be a major drag on your returns.
Thank you for the feedback mate!
Yes, we agree that Motif hasn’t offered IPOs yet while they talked about it for a year and we pointed that out. They need to make that happen.
We would argue that shorting is a very speculative activity and most retails INVESTORS shouldn’t be shorting stocks.
We hold 30 DGI stocks at the moment and DRIP most of them. The free DRIPs we use are all with various transfer agents like Computershare, Amstock, etc. Interactive Broker doesn’t offer DRIPs either. Some firms do but they charge $9.95 a trade.
We’re not overly familiar with tax loss harvesting but we assume this means selling your losers before the end of tax year? If you are an INVESTOR you should be selling anything “short term”.
All great points so thank you for bringing these up. Who is your preferred broker?