Morningstar Review 2023

How to Save on Morningstar Investor

First, a quick note on how you can save on Morningstar Investor, as it isn’t exactly cheap. Fortunately, Morningstar offers a few ways for you to save.

For one, and this is true of many investment services, you will get a better deal by paying annually or for a multi-year subscription than if you pay monthly. Of course, you need more capital to do so, but you can save substantially this way.

For example, paying yearly for Morningstar Investor will cost you $249, which breaks down to just under $21 a month. This is a 41% savings compared to the monthly fee of $34.95, which comes out to just under $420 per year.

Modest Money readers can save an additional $50 on the annual plan by signing up with this 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, however, to qualify for the 90% student discount.

Regardless of the Morningstar Investor plan you end up going for, you can take advantage of their trial offer first. Currently, Morningstar offers a seven-day free trial, giving investors some time to decide how they like it before committing.

How Does Morningstar Work?

Morningstar is a fairly straightforward platform. The site provides analysis, including ratings, of a huge number of stocks and funds. You will often see Morningstar’s ratings used by other investment firms, such as Charles Schwab, for example.

Morningstar leans to the fundamental investing side of things rather than the technical analysis side. Whereas technical analysis is all about interpreting charts, fundamental investing prefers to base investment decisions on a company’s financials.

Morningstar provides high-quality, market-leading data and analysis, which is why it’s trusted by the world’s top investment firms. You can simply type in the symbol of a given security (stock, ETF, or mutual fund) and you’ll see a ton of information at a glance, allowing you to quickly gauge a given asset’s promise as an investment.

Some of the information provided here includes a comparison of the asset’s financials with competitors, current market price versus its “fair value,” its economic moat, and its management (or “stewardship”).

It’s important to note that while Morningstar does provide stock ratings, it doesn’t necessarily do all the work for you. You need to spend time with the information and analysis provided and come to your own decisions. In this way, it’s different from a stock-picking service like The Motley Fool.

Now let’s take a more in-depth look at Morningstar’s top features.

Morningstar Features

Morningstar Ratings

Morningstar’s rating system is found across the financial world because of Morningstar’s strong track record. On a scale of 1-5, Morningstar assigns a rating to thousands of mutual funds. This score is derived from the fund’s risk-adjusted historical return and is algorithmically chosen. Depending on your preferences, this nonhuman component may be a positive or a negative.

In any case, since the ratings are derived from past performance, they should be taken with a grain of salt.

Security Analysis

Morningstar Investor outshines the free version (Basic) largely on the strength of its stock and fund analysis. With nearly two hundred independent analysts providing articles on stocks, ETFs, and mutual funds, Morningstar has a comprehensive library of ratings and research on a huge variety of funds and stocks.

Individual analyst ratings range from Negative, Neutral, Bronze, Silver, and Gold. The better the rating, the more the analyst has confidence in that security’s ability to outperform the market over the next twelve months.

Portfolio Management

Morningstar’s Portfolio Manager is another huge benefit of Morningstar Investor (again, fka Morningstar Premium).

The Portfolio Manager analyzes your portfolio and helps measure your diversification, your asset and sector allocations. It also provides indicators for how to optimize your diversification as well as tools for tracking your financial goals.

The Portfolio X-Ray offers a robust array of tools to help you find the allocation mix that’s right for your investment goals and risk tolerance. As the name suggests, the Portfolio X-Ray peels back the layers of your portfolio so you have access to a detailed analysis of your current assets.

The Portfolio X-Ray does this in part by looking beyond the stocks that you hold outright, but also the stocks held by any of the funds you own. For example, if you own GOOG stock but also hold GOOG in an ETF, most tools would only display the GOOG shares held outright. This would mean inaccurate results when looking at your asset allocation.

The Portfolio Manager is excellent when paired with the Watchlist feature. Together, you can directly compare assets you own to assets you’re considering, and use the aggregated data to make your investment 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.

Stock and Fund Screeners

The global stock market is overwhelmingly large, with tens of thousands of securities. Morningstar helps you cut through the bulk of assets by allowing you to screen stocks and funds with a wide range of filters.

The screeners are among Morningstar Investor’s best tools, as it allows users to easily narrow down a huge number of stocks to those that they want to buy or follow. The star rating system makes it easy to sort through stocks, and you can quickly learn more about a particular stock’s performance with a simple click.

The feature offers screeners for both stocks and funds. However, you’re only able to screen stocks using the metrics provided by Morningstar (such as financials or analyst ratings).

Mobile App

Morningstar offers a mobile app for iOS and Android devices. The Android version is listed as “Morningstar Portfolio Manager” in the Play store, while the iOS version is listed as “Morningstar For Investors” in the App Store.

Both apps offer the same functions, which are unfortunately rather limited when compared to the website version. On the app, you will only be able to view your current portfolio and watchlist portfolios. For quick analysis of a given stock or fund, or to check on your portfolio, the app is fine. But for in-depth research, the website is much better.

Morningstar Investor Pricing & Plans

Morningstar Investor is Morningstar’s primary offering. Here is a quick price breakdown:

• Monthly | $34.95/month ($420 annually)
• Annually | $20.75/month ($249 annually)
• Free 7-day Trial

Discounts are also available for students and through our exclusive link.

What does Morningstar’s Basic Plan Offer?

Morningstar’s Basic plan, which is free, lacks many of the benefits of Morningstar Investor. (No surprises there.) With the Basic plan, you will have access to Morningstar’s editorial articles, but most of the planning and investing tools will be unavailable or severely limited.

Upgrading to Morningstar Investor provides the full range of features (a few of which are outlined above).

Who Is Morningstar For?

Ultimately, Morningstar is for any trader or investor who wants comprehensive and robust market data and analysis at their fingertips. While Morningstar leans more toward fundamental analysis than technical analysis, day and swing traders can still benefit from Morningstar’s leading investment information and tools.

Since Morningstar’s ratings and analyses are generally built around the analysis of financial information, it’s helpful to understand the basics of fundamental investing. In this way, Morningstar Investor may not be worth it for brand-new investors or those who simply want to invest in one mutual fund for life.

Fortunately, you can try Morningstar Investor’s 7-day trial and see how you like it. There’s no pressure as you can simply cancel before the 7 days are up.

Who Should Avoid Morningstar?

Morningstar Investor is best suited for intermediate to advanced investors, as well as investors who are fairly active.

People who can probably do without Morningstar Investor are those who prefer technical analysis and day trading, as well as those investors who have decided to stick with one investment strategy until retirement (and beyond).

Ultimately, Morningstar provides a lot of information, analysis, and ratings, but it’s best if investors use this information and analyze it themselves. Morningstar isn’t a stock-picking service like The Motley Fool. People who want to be told which stocks to buy are better off using that service or a similar one.

Morningstar Alternatives

There are a number of alternatives to Morningstar out there. Other services that provide similar platforms include Zacks and Seeking Alpha.

As stated above, however, people looking for a stock-picking service should know that Morningstar does not exist to tell people what stocks to buy. While it does provide rating and analysis, it’s more about providing reliable information so investors can make their own minds up.

For a stock-picking service, you might consider The Motley Fool or one of its competitors. These services deliver stock picks right to your email inbox. So, if you prefer to sit back and receive stock picks rather than do the analysis yourself, those are better options than Morningstar.

Is Morningstar Worth It?

Morningstar and especially Morningstar Investor provide great tools for investors of all types. They’re a leading firm for a reason, with countless top banks and investment firms all around the world relying on the information and ratings they provide.

Morningstar Investor is great for anyone looking to have access to market-leading stock market information, research, analysis, and tools. It can allow you to quickly screen and assess stocks and funds, and the Portfolio Manager and Portfolio X-Ray tools help you track and analyze your own holdings.

While Morningstar Investor is probably not a great fit for total beginners and extremely passive or active investors, it should appeal to many investors out there.

Click here to learn more about what Morningstar can do for your investment journey.