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Who we are and what we believe

Mark LaMonica  |  13 Sep 2017Text size  Decrease  Increase  |  
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The Morningstar Guide to Investing - Part One, released on 12 September 2017, covers the core tenets of our investment philosophy and some foundational investing concepts around making informed financial decisions.


The "Morningstar Investor" is a central part of the guide, which is titled Who we are and what we believe. Over our 33 years as a company, we have formed some strong opinions on what it takes to achieve success as investors.

While the specific goals may differ, we all invest to make our families' futures a little brighter and more secure. Even getting started in investing involves identifying, strengthening and refining traits that are in short supply these days: the ability to delay gratification, and maintain faith in the future. Once investors have negotiated these initial hurdles, Morningstar is committed to providing guidance along each step of the investment journey.

So, what does the Morningstar Investor believe?

Knowledge is the foundation of independence

Our first investment is in ourselves. We understand that empowerment comes from understanding the foundational investment concepts necessary to make the right decisions and hold financial advisers accountable.

We are independent-minded

To deliver results, we think it’s necessary to invest with conviction, even when it means standing apart from the crowd. Herding is commonplace in investing. We know it generally delivers average results in normal times and can drive destructive booms and busts. We understand that meeting our investment goals may often mean acting independently from the herd.

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We invest for the long term

Taking a patient, long-term view helps us ride out market fluctuations and take advantage of opportunities when they arise. We know that investors often over-emphasise the importance of recent events, rushing into hot stocks when they’re overpriced and fleeing from market downturns. We fight this common error by focusing on long-term lessons and long-term performance.

We’re valuation-driven investors

Anchoring decisions to an investment’s fair value--or its true worth--can lead to greater potential for returns. We understand that our minds are hard-wired to find patterns in everything, and that much of the market’s daily volatility is just meaningless noise. We know that in the long term, the underlying value of a company, relative to its price, drives performance.

We believe in fundamental research

A fundamental research approach means gaining a deep understanding of each investment. At its core, a fundamental investing approach means focusing on the future earnings of an investment, and not its prospective price change. Our focus on fundamental research means we don’t fall victim to convincing stories to support the merits of an investment.

In the coming weeks, we will be releasing additional parts of the guide, with a focus on how Morningstar helps investors reach their goals, and how individuals can improve their financial outcomes by taking a more thoughtful approach to investing.

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Mark LaMonica is product manager, individual team, Morningstar Australia.

© 2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

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