Motley Fool vs. Morningstar

To buy or to sell?

That is the question.

How do you make your decisions?

In today’s world, news moves at the speed of light (probably faster).

If you plan to be a successful investor…

…you need to be on your game.

If you are not, you will never get ahead as an investor.

Therefore, having technology on your side is one key to success.

You simply cannot survive without the help of technology.

But the volume of options can also be downright frustrating.

So, what is another way you can get ahead?

By reading this blog post. Read it to the bitter end.

Why?

Because we are enabling your lazy ass to coast on this one.

We have two great companies for you to consider:

Those companies are Motley Fool vs. MorningStar.

Each company is strong, for similar and different reasons.

And one thing is for sure: Both companies can help you achieve success.

But if you had to choose ONE…

…which one would you choose?

Keep in mind, there can only be one winner.

Enough talk, more action.

Let’s get into our latest matchup: Motley Fool vs. MorningStar.

Let’s GO!

Motley Fool vs. Morningstar

Motley Fool

Let me just say…

…I am a “fool” for The Motley Fool!

Why?


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Morningstar is one of those “older” companies.

Founded back in 1984, the company began by analyzing mutual funds.

The cost to subscribe was high, and the internet was not really a thing.

What does this mean?

Information on mutual funds was nearly impossible to find.

This reason alone increased Morningstar’s popularity.

From there, its coverage grew from plain, old mutual funds…

…and now includes individual stock analysis.

From humble beginnings, the company now serves:

  • 9 million individual investors;
  • 260 thousand financial advisors; and
  • 51 hundred institutional investors.

You can subscribe to Morningstar on a monthly or annual basis.

The monthly subscription fee of $24 and the annual subscription fee is $200.

Many investors consider Morningstar to be their go-to mutual fund research tool.

The company provides insight and investment offerings for over 510,000 companies.

Morningstar has many features, but here are the most important:

Rating System

The “star” system is used for grading mutual funds.

Each fund is rated between 1 and 5 stars based on its market performance.

The star rating is intuitive (pretend you are shopping on Amazon or something).

However, there is much more to the system than what meets the eye.

Here is how it works:

Mutual Funds

The star system measures the performance of individual funds for three, five, and ten years.

Based on the results, each fund is ranked within a specific category of related funds.

Stocks

Morningstar uses the star system for stocks, but the factors are different.

The system for stocks is based on the overall valuation of an individual stock.

For example, a five-star stock implies an undervalued stock.

On the other hand, a one-star stock implies an overvalued stock or a generally weak company.

So, what do Morningstar analysts look for when rating stocks?

Here are the major factors:

  • Current prices;
  • Fair market value; and
  •  

From there, the stocks are ranked into different categories and given a star rating.

X-Ray Tool

What can beat Morningstar’s x-ray tool?

To some people, the answer is nothing.

The tool is useful AND easy to use.

For example, let’s say that you are deliberating between several mutual funds.

You can take the x-ray tool and determine if your fund choices have similarities.

These similarities include things like how many of the same stock you have in other funds.

You can also get the exact percentages of each holding for your entire portfolio.

If that is not enough, the tool will even interpret the results and let you know how your diversification is looking.

Are you properly diversified?

Do you have too much in one industry or sector?

Morningstar will let you know and reduce your overall risk.

Valuation

Morningstar uses its own propriety model to value companies.

The company utilizes a discounted cash flow model that remains undisclosed to the public.

But generally speaking, the way companies are valued is by discounting cash flow to the present, lump-sum value.

Screeners

The stock and mutual fund screeners are a life-saver for many.

You can quickly search for stocks and mutual funds based on your chosen criteria.

For example, you can search by star performance ratings.

The Bottomline

So, is Morningstar worth joining?

We will leave the decision up to you (like we have a choice).

Your options are two- and three-year subscriptions to the service.

The two-year subscription is $339, and the three-year subscription is $439.

Which One Is Better?

Okay, now that you have made it the end, we owe you an answer.

Motley Fool vs. Morningstar – which is the superior company?

If you need to choose one, go with The Motley Fool.

If you can try both, you need to try both (and heck, you might keep both).

The Motley Fool has more to offer everyone.

However, both services offer something unique,


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