Mutual fund ratings
It is tougher to do research on mutual funds than it is on individual stocks in my opinion. You can look up anything you ever wanted to know on a stock. It’s history, its earnings, its returns, its balance sheet… Whatever you want to know you can easily find online.
You can find some information on mutual funds easily online but not nearly as much because of the nature of mutual funds.
Mutual funds are much more subjective that way. Therefore mutual fund ratings by companies and websites such as morningstar play a much bigger role in investor’s minds.
The rating of a mutual fund is definitely something to take into account. If a respected site like morningstar gives a fund a 1 or 2 star rating there should be cause for concern. However they are not the final say as to how the fund will do. Just because a fund is 4 or 5 stars does not say anything about how the fund will perform. There are no guarantees in investing. Make sure you do your own independent research if you are going to invest in individual mutual funds.