Goldman Sachs Invests in Motif Investing

I saw this really interesting article in the DealBook Section of the New York Times online:
Goldman Invests in Upstart Online Broker Primarily it goes into the investment Wall Street standard-bearer Goldman Sachs made into Motif Investing. This supports not only what I wrote in the previous post, that this is the democratization of the mutual fund industry, and even moreso that those in the know view it as the future of the mutual fund industry, or at the very least a promising direction for the industry's future. The article also gets into some of the startup's board members, which include former SEC Chairman Arthur Levitt. This fact bodes well for their legal sustainability. The final detail in the article goes to the sites plans for monetization for user-created funds, which I think is very strategically being referred to as a "royalty" structure: "In February, the company began allowing investors to create their own portfolios from scratch, and said those investors would eventually be eligible for royalties if others wanted to buy their themed portfolios."

Food for thought, no doubt.

The Democratization of the Mutual Fund Industry

While the verdict is still out on how Motif Investing (as described in the last two posts) will be, my preliminary assessment is that this could well be the democratization of the mutual fund industry. When I consider the possibility of putting together several Motifs, theme-based funds, with very little investment, let alone a promotional offer that covers trading expenses if you follow the promo's requirements, it looks like an opening to the world of diversified and informed fund investment for both the original fund creator such as myself and the retail investor.