Create your own mutual fund

This post was originally published on July 28, 2013

Have you been investing in mutual funds your whole investing career but recently you were thinking what it would look like if you start investing into individual stocks?

Maybe your very first thought was diversification. Your account is still small and you won’t be able to buy more than 5 stocks at this point and that makes you uncomfortable. You know that experts recommend at least 30 stocks in your portfolio to reach a decent amount of diversification.

But how can you buy 30 individual stocks when you just started saving and investing and all you can save is $100 monthly? What if you would have an opportunity to build your very own mutual fund of stocks you want to own?

Well, today you have that opportunity and it is very simple. And you do not need millions to do it. You can start your own mutual fund with just 250 dollars (it’s like buying your first position in a mutual fund, right?).

You can build your own mutual fund

Yes you can build your own mutual fund and it will not cost you anything and you do not need millions or billions to start your own mutual fund. I found this opportunity thanks to my friend and fellow investor Wayne Bow who sent me the link to a great service which would allow it.

A broker which allows you creating your own mutual fund is Motif Investing. And how does their service work?

Once you open an account, which is for free, you can create your own mutual fund, which is called a Motif. You can add 30 of your favorite stocks into the motif (portfolio) and you can create as many motifs as you wish. And more on that, the broker will give you a bonus up to $150 to trade with.

Want to make 150 dollars right after opening an account?

If you open an account, Motif Investing provides you with up to $150 bonus. If you deposit for eaxmple 1250 dollars and make 5 trades, you will have 12% profit right there!

Get up to $150 when you start trading at Motif Investing. Learn more.


I already did it myself and will be reporting my progress soon.

I created my own dividend growth stocks motif. I added stocks I want to invest in, but my current taxable or ROTH accounts do not allow me buying them all. With Motif investing I could create my own motiff of all stocks I like and I will be able to buy them all.

Here is a screen of my own dividend stocks mutual fund:

Motiff part 1

Dividend Income Motif – Part 1 – Click to enlarge

Motiff Part 2

Dividend Income Motif – Part 2 – Click to enlarge

How it works?

Once you created your own motif (your own mutual fund) and funded your account, you can start buying your motif. The minimum investment to buy a motif is $250. For each motif purchase or sell you will pay $9.95 commission, which is in line with other brokers. If you want to be purchasing individual stocks (outside of the motif) then the fee is $4.95 per the stock or ETF.

When you buy a motif, you will be buying fractions of all stock inside your motif, the exact same way as you are purchasing your mutual funds in your 401k. For me this is an excellent idea how to stay diversified even with small money.

You can be buying not only your own motif, but you can also buy motifs of other investors. You can create as many motifs as you wish and be buying them all. So although one motif is limited to 30 stocks, you can create two motifs or three motifs and be buying 30, 60, or 90 stocks and their fractions as long as you reach your dividend investing goal.

And of course you can set your own desired allocation in each industry or individual stocks within the motif and you can always change that allocation to reflect your market anticipation. Isn’t that a cool idea?

The broker allows you opening all sorts of accounts such as individual, joint taxable, IRA, ROTH IRA, Rollover IRA, etc.

I think this is a great idea how to invest your retirement money in stocks you want the same way as if you invested in a mutual fund. I liked this idea a lot, so I opened an account with Motif Investing and I will invest with them. I will report on this blog how that investing worked.

What do you think, is it a good investing idea?


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Posted by Martin April 25, 2017
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TECK short strangle

UPDATE: Apr 25, 2017

BTC 1 TECK Apr28 24.00 call @ 0.02 debit

The company reported earnings this morning before market opening. The stock tanked almost 6%. This was great for our remaining calls.

We closed our call side of the trade this morning. As of now, we are out of the entire trade for a profit.

We originally collected 0.22 credit per contract:
Total = 0.44 or $44 dollars credit

We closed both legs for 0.02 per each:
Total = 0.08 or $8 dollars debit

Total profit = $36 in 5 days (0.85% or 61.95% annualized profit)



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Posted by Martin April 24, 2017
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La Liberté guidant le peuple (Second French Revolution)

SPX trend reversal


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Posted by Martin April 21, 2017


How to start with very small money?

Are you a small investor as I am? Are you a beginner? Do you think you cannot afford investing because you do not have enough money?

Do you want trade stocks however?

I consider trading stocks as my hobby. I like it. I like the game, its adventure and danger. I am also full of emotions when trading and trying to control them. One of my friends trades stocks as a game too. He has no background, no knowledge, he just plays it as betting horse racing. He says, “when the stocks are down I feel offended and do not look at them at all and they come back begging for my attention”. This is how he made his first $10,000 dollars within two weeks. I envy it and I tried to find out why it worked for him while I was loosing money. He simply didn’t allow his emotions take action and sell his stocks when they displayed initial losses while I was selling to cut losses quickly. It is a good strategy however you shouldn’t cut those losses too quickly, otherwise you start collecting losses one after second.

Well, let’s talk how to start when you have no money and no idea. I did it this way three years ago:

Opening trading account
Review your salary and your family budget. Write it down on paper. Write down how much money flows into your household. I recommend considering only regular income instead of seasonal unless the seasonal income is regular too (for example a summer help or a winter ski school instructor, etc.).
After that, write down all your mandatory expenses only (such as mortgage, tuition, rent, insurance, etc.).
Then you would be able to see, how much money you have left for your personal expenses (or your household). Now you can ask yourself a question: “How much money I can afford save aside?” Is it $50 a month? $100 a month?

There are many brokerage houses out there. Go to the internet and do some research what are their conditions to open a new account. I personally trade with TD Ameritrade and they require min. $2000 to open the account. You can try Sharebuilder. I think they have no minimum and low trade commissions. But I do not know all of them, so you should do your own search and study. You can go to MSN Money
and search through other brokers.

If you however decide for TD Ameritrade, you would need a minimum amount of 2000 of dollars to open the account. Then go to your local bank and open a Time savings account (I opened 91 day savings account) and start transferring your $50, $100 or whatever you decided to save into this account. Do it regularly every month and prior you start spending the money. Whenever you receive your salary, send your minimum to your savings account. No matter what, no questions, no excuses. Do it. Do not touch that money and let them grow. Soon you would be able to open the new account and transfer the money into it.

During the saving period you will have enough time to study the stock market, stocks, strategies, read books, create your control loss plan, journal, etc. Overall you make yourself ready to trade. You can open a Stock simulator and there you can try your strategies as well as try how it works (placing orders, executing, creating portfolio, etc.).

After you have your new account opened, do not stop saving your money on your savings account. If you have no reserves I strongly recommend building your emergency savings.

Always consider your money on your broker’s account as already lost. If you cannot afford it, continue in saving as long as you would be able to afford it.


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Posted by Martin April 17, 2017
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New STX strangle trade

Trading strangles can be very profitable trade if done correctly. Trading strangles during company earnings can be even more profitable. But is can also be quite dangerous. I am posting a new trade for you all to watch, follow or paper trade.
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Posted by Martin April 17, 2017
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Trading Diary #6 – did we just experienced a reversal?

How I see today’s price action in the stock market. Could this be a downtrend reversal? If so, we may see a resumed rally. We also rolled some of our US Steel (X) strangles into the next week.
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Posted by Martin April 16, 2017


Trading Diary #5 – stock market in confirmed downtrend

As I wrote in my last trading diary #4 the market struggled to break the downtrend line.

Here is a chart I posted the other day to show my point stating that the market had to break above the line (marked with blue arrows):

SPX trend struggle
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Back in December 2016 I opened a triple play trade using Energy Transfer Equity, L.P. (ETE) as underlying.

I was selling cash secured puts as long as I got assigned into the stock.

After I got assigned, I kept the stock, collected nice dividend, and started selling covered calls. Today, my covered calls ended in the money and got assigned. I sold my stock.

This ends this trade and on Monday I will start the cycle again by selling new cash secured puts.

Here is the ETE trade review in numbers:

Open date Strike Option Premium Trade Status
12/2/2016 15.00 puts 0.52 rolled
12/21/2016 17.00 puts 0.21 rolled
12/28/2016 19.00 puts 0.45 assigned
01/23/2017 19.00 calls 0.35 expired
02/27/2017 19.00 calls 0.28 rolled
03/09/2017 19.00 calls 0.34 expired
03/27/2017 19.00 calls 0.26 assigned
04/07/2017     2.41  


Total Premiums Received: $241.00
Dividends Received: $28.50
Total Revenue: $269.50
Total Revenue %: 14.18%
Total Revenue Annualized: 40.77%
Days In Trade: 127


The dividends from this trade have been reinvested using DRIP program. I bought additional 1.505 fractional shares of ETE. These shares will bear dividends and I will continue reinvesting them.

This will ensure my stake in ETE will continue slowly growing.


 · What’s next?


On Monday, I will start selling new cash secured puts (CSP) – a new triple play cycle.

I plan on selling April 28 expiration 19 strike puts on Monday. Here is what the trade order would look like:

STO 1 ETE Apr28 19.00 put
@ 0.36 credit limit GTC

The expected ex-date is May 5th, 2017 (not confirmed yet) so the shares must get assigned in April 28th in order to own the shares before the ex-date (which would be the following Friday).

If the puts won’t get assigned, I will let them expire worthless and purchase 100 shares of ETE outright on Thursday the following day.



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Posted by Martin April 06, 2017


March 2017 options income

March 2017 trading turned out to be successful again although at first not expected.

As I mentioned in my previous posts about options trading I dedicated this year to consolidate my trades from previous year. I opened a few trades which I no longer like and I got stuck in those trade by first over-trading and then rolling them far away. Now I sit on those trades and they are dead money.

So, I decided to sequentially get rid of those trades. In previous months I closed a few trades for a loss, but offset that loss by new trades. I was successful in January and Fenruary this year.

I did the same in March 2017. But I closed too many trades in March. At least I thought so. I closed trades for $2,600 dollars loss.

But I was able to trade this loss out and finished the month with gains.

My plan for March 2017 was to make $1,717.35 dollars of income.

Although I haven’t met our goal, given the circumstances that I was offsetting a loss, I am happy to say that we were able to make $1,619.74 dollars of option income.


 · Options Trading Strategy


Over time since I learned trading options I went from trading spreads, single naked puts, later added naked calls and landed on trading strangles. Many people are afraid trading strangles. They do not know how to protect themselves when having naked calls trades. I was afraid too until I found out that it is not as dangerous as others say.

I am not saying that there is no risk, but if you know how to handle the risk, you will be able to navigate through strangles with no fear.

Over time I developed my own rules and strategy. You can review it in this section.



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 · Options Trading Results


As stated above our trading in January was really great and we made $1,619.74 dollars.

Below you can see all data and progress in our trading account:

Month-to-moth trading results

Trading results

(The red dots on the chart indicate income estimate, blue bars actual earnings.)

In March 2017 we made: 49 trades
Total trades in 2017: 136 trades
March 2017 options trading income: $1,619.74 (47.27%)
2017 portfolio Net-Liq (net)*: $2,708.97 (-32.62%)
2017 portfolio Net-Liq (gross)*: $23,208.97 (-5.35%)
2017 portfolio Cash Value (net)*: $28,141.97 (20.10%)
2017 portfolio Cash Value (gross)*: $48,641.97 (10.72%)
2017 portfolio Equity (net)*: $33,328.97 (4.20%)
2017 portfolio Equity (gross)*: $53,828.97 (2.56%)
2017 Liability/Debt: $20,500.00 (0.00%)
2017 overall trading account result: -28.25%

* The numbers marked as “net” and “gross” are results with loan (liability) included (gross) or excluded (net).



We are presenting you our month-to-month business performance review:


In March 2017, we made money to offset closing bad trades and yet ending up with gains.

However, these gains were immediately blocked by other existing trades and a few new trades.

The biggest problem was a $LULU trade. The company missed by very little when reporting earnings but provided weak guidance which sank the stock more than 20%. This trade had negative impact on our net-liq and overall account results.

However, I consider it a temporary decline since we haven’t closed any trades in our portfolio. There fore, once those trades get better again (by rolling , closing, offsetting etc.) our net-liq will go up again.


 · Options Trading April 2017 outlook


Last month, my March outlook was quite optimistic.

Until the market presented itself in a reversal and decline.

In my last Trading Diary #4 post I wrote that the market retreated from the recent highs. I expressed a hope that the market could pushed up and break the downtrend.


As you can see in the chart above, the market is stuck with fighting between bears and bulls. But it cannot break the downtrend line. Anytime the price breached the downtrend line it was immediately sold off.

This was also happening on the downside and the market fell to the support or even below, it was immediately bought by buyers.

However, my overall bias is bearish. Nothing disastrous, but I expect the stocks sliding lower until the market breaks up.

What do you think about options trading?


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Posted by Guest April 04, 2017
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Unconventional Ways to Save Money

Saving money is a concern that affects most people today. We have probably heard all of the conventional money-saving tips, such as, cutting back on your personal fun money or trying not to eat out as often. There are other ways to save money that are not so conventional, though. Let’s take a closer look at some of them now.


 · TV Options


If you are paying for satellite or cable services, you have a pretty good chance to find ways to save money on your services. The savings you get can be as little as $5 or more than $100 depending on what you subscribe to and what you feel you can live without. The key to this is to constantly be looking at your service level to see what you are and are not watching. What you don’t watch, try to cut it out. We all enjoy our local channels though and with DIRECTV local channels are something that you will never need to go without.


 · Skip the Meat


When you are looking at ways to manage your finances so that you can save more money, one way to do this is to save money on groceries. Yes, we already know about price matching, shopping around, and using coupons, so we won’t get into that here. Instead, what about cutting out one of the biggest expenses on your shopping list… meat. Meat can be incredibly expensive. This is especially true if you are a big fan of steaks, corned beef briskets, and the like. By skipping out on the meat during your shopping, you will be doing more than making healthier choices… you will also be making it easier for you to save a lot of money on your grocery bill.


 · Give Up the Wheels


This might not be an option for a lot of people who live far away from their place of employment, or in rural areas, or even in cities that don’t have dependable public transportation options, such as in Mobile. AL. However, there are millions of people who remain without a vehicle, which enables them to save money on car payments, gas, insurance, taxes, and more. Some of the options you might have include using public transportation, biking, and walking. There are very creative ways to get around not having a vehicle. You can take a cab, rent a car on those occasions when you absolutely have to have a car, and you can even get your groceries delivered if you have a grocery store in your area that offers this. Almost everything else you might need can be ordered online.


 · Avoid Tolls


Living in Chicago has its perks, but getting around without having to pay tolls can be difficult without help. You can always make sure to set your GPS so that you can avoid them and this can save you a lot of money. This might take a few minutes out of your day, but the savings, especially in toll happy places, can be significant.


 · Make Your Own Clothes


A lot of people might be of the opinion that sewing is something that is hard to do. High levels of this activity can be quite difficult and can require a bit of experience, but you might be surprised at how much you can save on clothes just by hemming that pair of pants by yourself or doing a few simple alterations. At times, getting a single dress altered might cost you up to $20. You don’t need an expensive sewing machine either. You can get a good one for about $50. Then, just practice with a few patterns. You can make things like tote bags, skirts, pillows, and more with very little experience.

All in all, there are quite a few more obvious ways that you can save money. From not spending so much on your coffee every morning to sharing a ride with a co – worker. That being said, sometimes it can be a fun thing to try to stretch your limits and find more and more unconventional methods for you to save a bit more of your money. What can you come up with to save more money this year?


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