By The Associated Press

Filed under: Technology, Stock Picks, Financial Services, Investing

By Mark Jewell

BOSTON – Think you can tell the difference between a fad and a trend with staying power? Look around, and you might come up with some decent investing ideas.

If you’ve noticed that lots of your friends are using tablet computers instead of PCs, it might be a good time to consider stocks of companies driving the tablet revolution.

See evidence that Americans are getting more serious about their weight problems? Consider stocks of fitness center chains and weight-loss clinics. If you’re convinced that we’ll never get disciplined about our diets, try the opposite approach and invest in fast-food chains.

For average investors hoping to beat the market, buying several stocks fitting a broad investment theme is probably a better option than assessing which individual companies to buy. Few have the know-how to routinely make good stock picks, let alone the patience to do the required research.

With those realities in mind, a Silicon Valley startup last year launched a website aimed at do-it-yourself investors who consider themselves savvy trendspotters. Motif Investing enables customers to buy baskets of up to 30 stocks each that fit various “motifs,” as the company calls them.

The bigger player a company is in that investing theme, the larger its weighting is in the basket of stocks. For example, Wal-Mart makes up nearly one-quarter of the portfolio in a retail stock motif called “Discount Nation.”

The website has a menu of more than 100 motifs. Some are fairly conventional, such as offerings focusing on dividend-paying stocks and diversified bond portfolios.

But most are trend-oriented, such as a “Tablet Takeover” motif geared toward tablet computing, a “Fighting Fat” basket of weight loss-themed stocks and a “Junk Food” motif of fast-food and soft drink stocks. If social change is important to you, a “No Glass Ceilings” motif owns stocks of corporations run by female executives. Another invests in companies with gay-friendly workplace policies.

IDEA-SHARING FEATURES

Motif launched last June, and on Thursday announced a new feature enabling individuals to create custom motifs and share them with other customers. Eventually, Motif plans to adopt a royalty system, allowing someone creating a motif to earn small payments when other investors buy it.

Customers can post investing ideas online for all to see, or friends or colleagues can exchange tips privately.

EMERGING MODEL

Motif is among a small number of young companies trying to challenge traditional investment advisory firms through novel uses of the Internet and social networking. Others include Covestor, MarketRiders, Wealthfront, ShareBuilder and Betterment.

Although none has become a significant player in the industry, some could eventually catch on with certain types of investors.

“There’s room for these niche players if they can get some traction,” says analyst David Schehr of research firm Gartner Inc.

Motif’s likely target audience, Schehr says, is investing enthusiasts …read more
Source: FULL ARTICLE at DailyFinance