, Columnist
Morningstar's Star System Was Always a Bright Shiny Object
The ratings look backward and give a false sense of comfort.
Eye candy.
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The front page of yesterday’s Wall Street Journal called out mutual-fund analytics firm Morningstar and its five-star rating system.1509033284948
The Journal’s conclusion? Top-rated funds “drew the vast majority of investor dollars, but most didn’t continue performing at that level.” Morningstar, of course, said “its ratings were not supposed to be predictive and they should be a starting point for investors selecting funds.”