The Morningstar Income Investing Guide

At Morningstar, we're all about independence for the individual investor. Independence from conflicted advice, independence from excessive fees and independence from the presumption that it is somebody else’s responsibility to give you the life you want.

Passive income is one of the pillars of independence. Which investor hasn’t dreamt of earning income while sitting on a white-sand beach sipping a cocktail? That’s nice, but a Morningstar investor knows the difference between dream and reality.

This dream isn’t going to come true by itself. It takes research to uncover investment opportunities. It takes patience to let compounding do its magical work. It takes conviction to resist chasing the crowd. And it takes foresight to realise that earning money is only the first step on the journey to financial independence.

The Morningstar Income Investing Guide is intended to help you become a better income investor whether you are just starting out or have been investing for years. The guide outlines basic income-investing concepts and points you towards Morningstar Premium features and tools that can help you navigate your own path to financial independence. The guide is available to anyone who takes a free trial prior to September 15th.

What's in a moat? 

The term “economic moat” was popularised by Warren Buffett and is used to describe companies with sustainable competitive advantages. Just as moats protected castles from invaders in medieval times, economic moats protect the company’s earnings from competition. Moat companies have exclusive assets or skills that help them stay ahead of the competition and thereby survive the hard times and flourish in the good.

Each moat rated company sources its moat from one or more of these categories: intangible assets, cost advantage, switching costs, network effect or efficient scale. We have introduced a new moat source feature on the page displaying our current research view.

Moat source chart

Morningstar moat source chart

 

Mid-year investment forecast

Peter Warnes recently released his bi-annual feature covering the key issues, trends and risks in the share market and economy over the next year. He looks at local and global trends that influence financial markets with the goal of providing investors with the necessary information and investment ideas to generate satisfactory long-term returns.

Special reports from our equity research team

Our equity research team has been busy producing several in-depth Morningstar special reports on local companies. In the past month, these companies have included CSL Limited (ASX: CSL), Macquarie (ASX: MQG) and Invocare (ASX: IVC).

Morningstar Next diversification tool

Morningstar Next offers three ready-made portfolios that are thoroughly diversified across asset classes, industries and geographic regions. We recently added a powerful new diversification tool that allows you to quickly and easily see the asset allocation and holdings of each portfolio. Give the new tool a try and let us know what you think. 

Morningstar values your feedback. Write to us at [email protected]

 

More from Morningstar

• Investing basics: What it takes to make $1m before retirement

• Goodman builds 9pc profit boost

• Make better investment decisions with Morningstar Premium | Free 4-week trial

 

Mark Lamonica is a product manager, Individual Investor, Australia.

© 2018 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.