If you are a hands-on investor, Morningstar.com is a free tool for research and analysis of investments.
Here are the key factors:
What is Morningstar?
Morningstar is an investment research company which assigns risk rating primarily to publicly traded mutual funds and exchange traded funds (EFTs), but they also rate stocks and bonds.
How Ratings Work?
The funds are rated on a 1-5 with 5 being the best. This rating is based on the fund’s performance compared within the same Morningstar category and it’s calculated at the end of the month. Funds must have at least 3 years of history.
Ratings are also available through brokerage firms, media websites and within 401k plans. This allows for easy evaluation of funds.
Morningstar is not the only company – Zacks Investment Research, Standard and Poor’s, TheStreet, and Thomson Reuters Lipper also provide ratings.
Criticism
A criticism reported by Investopedia is that the ratings compare funds to other similar funds and don’t take into account the whole marketplace; therefore, they do not provide an overall picture of growth and potential.
Mindful Reminder
You must remember to have patience. It takes time to do research especially if you are new to investing or in a new market such as ESG investing. Be mindful of your time on the computer, so you don’t overextend yourself.
Seeking Help
If you are depressed, anxious, or have panic attacks, find a health professional who can help you.
Substance Abuse and Mental Health Services Administration (SAMHSA) National can provide free referrals. They are open 24/7, 365 days a year.
If you are experiencing suicidal thoughts, please contact 988 for help. The calls are free, confidential, and they are open 24/7 to help you navigate difficult emotions.
Attend a Workshop
If you are interested in attending a live webinar on improving your relationship with your finances, please visit my events.
Related Posts
Investopedia. (2021). Morningstar risk rating: definition, factors assessed, and example Retrieved from: https://www.investopedia.com/terms/m/morningstarriskrating.asp
Morningstar. (nd) Morningstar ratings 101: what you need to know. Retrieved from: https://www.morningstar.com/company/morningstar-ratings-faq
Nerdwallet. (2022). Morningstar review: pros, cons and key features. Retrieved from: https://www.nerdwallet.com/article/investing/morningstar-review
Sofi. (2021). Morningstar ratings: what are they & are they accurate? Retrieved from: https://www.sofi.com/learn/content/morningstar-review-system-explained/
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