Morningstar Review 2022

Jeremy Biberdorf By: Jeremy Biberdorf Nov 27, 2022
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4.5/5

4.5 rating based on 5 ratings

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In a Nutshell: Morningstar, Inc. is an investment firm that provides an excellent investment tool that conducts analyses of mutual funds, stocks, and other relevant market data. Other than being a comprehensive research tool, Morningstar also has insights on mutual funds and ETFs (exchange-traded funds) that other platforms such as Motley Fool use as sources for their stock picks.

Read our Morningstar review to learn more about what this platform offers and why you should consider it.

FeesAccessInvestment Types
$249/year or $34.95/month for Morningstar PremiumGet access to analyst reports, top investment picks, portfolio manager and
X-ray, screeners and the article archive
Funds, ETFs, Stocks, Bonds
Pros & Cons
Pros
  • Free 7-day trial
  • Intuitive interface
  • Access to important research, analyses, data, and picks
Cons
  • May be a bit confusing to beginners

What is Morningstar?

Morningstar is an ultimate investment research tool that analyzes and researches the market to provide you with important data and recommended stock picks to help you get ahead. Morningstar itself is one of the largest investment firms in the world. They aim to offer valuable insight into the market for investors to take a more active approach to invest.

That being said, it’s not the best for users who want to “set it and forget it”. Morningstar works best for those who want investment ideas that allow them to take more control and manage their own portfolios. Morningstar offers two plans – the free Basic Plan and the Morningstar Premium Plan.

The Premium (Morningstar Investor) Plan will cost you $249 a year and unlocks all the features the platform offers. The Basic Plan offers partial access to certain stock investing and investment tracking features while some others are off-limits.

How to Save on Morningstar Premium

A subscription to Morningstar Premium—now known as “Morningstar Investor”—can cost quite a lot if you choose to pay for an extended membership upfront. For this reason, some investors may opt for a monthly Morningstar Premium instead. While this will certainly lower the upfront costs, a monthly plan will actually end up costing far more than paying for an extended plan upfront.

Currently, Morningstar Premium costs $34.95 per month, which comes out to $419.40 per year. Compare this to the annual plan, which is available for a one-time payment of $249. You can instantly save $170.40 (41%) just by opting for the annual plan! Modest Money readers can save an additional $50 on the annual plan by signing up using our exclusive link, which reduces the cost to $199 for the first year.

Students can save even further, reducing the cost of the annual plan to a mere $25 for the first year. You will need a valid .edu email address to qualify for the 90% student discount.

Regardless of which Morningstar Premium plan you end up going for, you should take advantage of their trial offer first. Currently, Morningstar offers a seven-day free trial, giving investors plenty of time to determine whether the platform will meet their needs.

Morningstar Features

Speaking of features, let’s take a deeper dive into what you can get out of Morningstar.

Morningstar Rating

The Morningstar rating system makes picking mutual funds much easier. The platform rates each one with a 1 to 5-star rating based on the risks vs returns. While this is very informative indeed and the ratings are generated by mathematical algorithms rather than human analysts, we must remind our readers that past performance is not indicative of future possibilities.

Investment Tracking

The Portfolio Manager feature in the Morningstar Premium Plan tracks your investments and helps you diversify and evaluate your portfolio and goals. The Portfolio Manager is excellent when used alongside other investing tools since it also allows you to track assets not included in your actual portfolio via the “Watchlist” feature. This means you can directly compare assets you own to assets you’re considering and use the aggregated data to make buy/hold/sell decisions. Unlike some alternative planning tools, the Morningstar Investor Portfolio presents data in an easy-to-understand pie chart, which is helpful for those who prefer visual displays to text-only ones.

With the Portfolio Manager also comes the Portfolio X-ray, which peels back the layers of your investments with multiple tools to pinpoint and help build the best profile for you.

The Portfolio X-Ray is arguably the best feature of the Portfolio Manager. This is due to the high accuracy of the information it provides. Whereas similar planning tools often claim to offer a detailed analysis of your current assets, they often fall short, overlooking any duplicates in your portfolio.

This Morningstar Investor feature doesn’t just look at the names of your stocks; it also takes a closer look into the contents of any funds you’ve invested in. For example, if you owned AMZN stock but also had AMZN in an ETF, most tools would only display the AMZN stock shares. This would result in incorrect results when looking at your asset allocation.

Fortunately, Portfolio X-Ray considers the individual investments inside of each asset class, resulting in an accurate display of asset allocation.

Investment Screening

The market is made up of thousands upon thousands of stocks and funds, so it’s a task and a half to find one that matches your criteria. With the investment screening function, you can narrow down the options by filtering down the choices.

It’s one of the best planning tools for Morningstar Investor members, as they are able to track down potential stocks that may be worth adding to their portfolios with ease. The star rating system makes it easy to sort through stocks, and you can learn more about a particular stock’s performance by clicking on it. The feature offers both screeners for stocks and fund screeners. However, you’re only able to screen stocks using the metrics provided by Morningstar (such as financials or analyst ratings).

Investment screening functions are no strangers to other investment tools, so it may not be the best use of your money if this is all that appeals to you about Morningstar.

Top Picks

Perhaps the most coveted features are the top picks and insights Morningstar offers. In fact, this data is so valuable that Motley Fool also relies on this information for their stock suggestions. Morningstar has many analysts providing their unbiased expertise in the market.

Mobile App

Morningstar Premium does offer mobile apps for Android and iOS devices. The Android version is listed as “Morningstar Portfolio Manager” in the Play store; the iOS version is listed as “Morningstar For Investors” in the App Store.

Both apps offer the same functions, which are extremely limited when compared to the website. You will only be able to view your current portfolio and watchlist portfolios using the app. While this is helpful for monitoring your portfolio on the go, it doesn’t offer any of the key features or services—such as in-depth editorials or “Top Picks”—that you’d expect from a mobile app.

What Does the Basic Plan Offer?

Unlike Morningstar Investor, trades will have many restrictions placed on them if they opt for the free version of Morningstar. Although they will have complete access to Morningstar’s wide selection of editorial pieces, most of the planning tools and investing tools will have severe limitations placed on them. Upgrading to paid membership will allow users to use the stock screener(s), read detailed asset analysis pieces, take advantage of the portfolio manager, and more.

Who is Morningstar for?

To put it simply, Morningstar is for hands-on active traders and ones with some knowledge already about investing. The data, analyses, and research are a little advanced for beginners and the tools will take time to navigate. This is not to say you can’t master it over time.

There is nothing wrong with trying the free Basic Plan first just to get a feel of what the platform can do for you. The free plan is also a great place for beginners to start learning and preparing for the eventual upgrade to Morningstar Premium.

We do not recommend settling for the basic plan if you are an intermediate or expert active trader looking to make the most use of the insights Morningstar can give.

Who Should Avoid Morningstar?

Morningstar Premium works excellently for the active investor, but its services aren’t ideal for day trading or swing trading. Instead, Morningstar Investor aims to help investors maximize their returns over long periods of time by providing them with potential opportunities and investment strategies. Investors using the platform will still need the time to do their own research, though, as Morningstar only provides assessments of individual stocks and assets: it doesn’t tell you which ones to buy!

MorningStar Alternatives

The services offered by Morningstar, Inc.—both Morningstar Basic and Morningstar Premium—are best suited for the active investor who has time to research their investments. However, this powerful tool won’t be of much use to the hands-off investor, who seeks straightforward stock recommendations and minimal time commitments.

If the above description sounds like you, then we would recommend an alternative subscription service: Motley Fool Stock Advisor! This service doesn’t provide an analysis of individual stocks, but it does provide clear-cut stock recommendations that you can use to build out your portfolio.

The Fool actually offers a few different services for different types of investment portfolios. Rule Breakers—another one of the stock investing services—provides riskier stock recommendations that the Fool believes could offer sky-high annual returns.

We recommend checking out Motley Fool’s services if you’re looking for actionable stock recommendations rather than complex data on individual stocks.

Should You Get Morningstar Investor?

Again, Morningstar Investor is our recommendation for active traders who manage their own investment profiles and make  investment decisions independently. The knowledge the data and research provide is invaluable in picking the right stocks, mutual funds, and ETFs. Not only can you have the information at your fingertips, but you can also learn and grow as an investor from the selection process.

Morningstar Investor opens many doors for an average investor, although it does take a paid subscription to gain access. Is the fee worth it? It really is. Of course, it makes more financial sense to pay annually, but you can also choose to pay monthly.

We don’t want to shut out potential small-time investors as we do believe information from Morningstar can grow your profile, but it may not be as worth it as it is for those who have a larger investment balance. Click here to learn more about what Morningstar can do for you.

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Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. After working many years in the website marketing industry, he decided to take on blogging full time and also get his finances headed in the right direction. Also check out his contributions to Equities.com and Benzinga.