Using Motif Investing to Build a Great Dividend Portfolio

Motif Investing isn’t just a great tool for saving money investing but it can also help you find the best stocks for your needs.

This is a guest post from Joseph Hogue, CFA. He runs six websites on topics including personal finance, investing, crowdfunding and making money from home. A veteran of the Marine Corps, he holds the Chartered Financial Analyst (CFA) designation and lives with his family in Medellin, Colombia.

I’ve been an investment analyst for nearly a decade, working with every type of investor from venture capital firms to individual investors. I’ve seen just about every investing strategy and trading scheme but gotta say, in my book, dividend investing wins out every time.

Dividend investing can put consistent cash in your pocket or it can be reinvested to benefit from the real power of compound interest.

If you’ve seen Andrew’s post on cashing in with dividend investing, part of his 7 Steps to Understanding the Stock Market, then you know he’s a believer in dividends as well. In fact, he never suggests investing in a stock unless it pays a dividend.

So I wanted to combine the power of dividends with one of my favorite new investing tools, Motif Investing, to build the ultimate dividend portfolio.

What is Motif Investing?

I started investing on Motif earlier this year, fed up with the trading fees on my ETrade account. Motif is a lot like other discount brokers, allowing you to invest in stocks and exchange traded funds (ETFs).

What sets Motif Investing apart is that it lets you group up to 30 investments in a fund, called a motif, then buy them all with just one trade. Instead of paying up around $300 to buy the 30 stocks, you pay just $10 each time you invest in the group. 

Not only does Motif help save money on fees but it’s a great way to invest in themes like dividend investing. Picking 30 dividend-paying stocks and ETFs gives you instant diversification and keeps from stressing out over any single company.

Looking for ideas on stocks for your portfolio? It’s one of the hidden benefits of investing on Motif. Each of the 12,000+ motifs created by other investors is viewable and separated into more than 10 categories.

It’s how I find new investing ideas and built my dividend portfolio.

How I Find Dividend Investing Ideas on Motif Investing

Filtering through the motifs on the website is a great way to find new dividend investing ideas and how to invest in different themes.

To find new picks for dividend stocks, I login to my account and then click ‘Explore’ to filter the motifs by category. There are nearly 1,500 funds created by investors that focus specifically on dividend investing and seven motifs created by the website analysts.

For example, the Monthly Dividend Income motif holds 13 stocks with monthly payouts that average an 8% yield. The fund is spread across business development companies (BDC), REITs and other frequent payers and has produced a 22% return over the past year.

You can invest directly in any of the existing funds but I like to use them solely for ideas to create my own fund.

motif investing

Once you’ve found a handful of dividend stocks that look promising, use some of the metrics here on eInvesting for Beginners to narrow the list down to 30 stocks or less.

I used the dividend funds on Motif to put together my own fund of Dividend Stocks for Cash Flow and Growth. The fund holds 12 individual companies across six sectors plus three ETFs for further diversification. The stocks in the fund pay an average 3.5% yield and have increased 21.5% since the beginning of the year.

You can invest in individual stocks, ETFs, bond funds and REITs on Motif Investing. About the only asset class that isn’t available through the website is peer to peer loan investing. I’ve created four funds on Motif across different themes including dividends, retirement and my favorite Warren Buffett stocks picks. You really don’t need multiple funds and could potentially diversify with a combination of 30 stocks and ETFs in just one fund.

Motif Investing is more than just a way to save money investing and can be a great resource for picking dividend stocks. Group up to 30 stocks or ETFs in your dividend investing portfolio and benefit from instant diversification and stress-free investing.

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