What is Morningstar Rating?

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. 

SAMHSA National can provide free referrals. They are open 24/7, 365 days a year.

Call: (800) 662-Help (4357).  

Visit:  SAMHSA’s National online treatment locator

Text: Your zip code to 435748

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.

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