In essence, the Morningstar Medalist rating is about competitive advantages. If we think a fund has enough competitive advantages to outperform its peers, we give it a Morningstar Analyst Rating of Bronze. If it has enough advantages to have a good chance to outperform its benchmark, too, we rate it Silver or Gold.Our analysts spend the bulk of their time assessing whether a fund has competitive advantages.Some advantages endure and some erode over time, so it requires a close watch and a mind open to change. Reaching your investment goals is a lot easier when you invest in funds with competitive advantages because you improve your chances for outperformance. (Building a sound plan and sticking to it are also huge parts of meeting your goals, of course, but I'm focusing on the fund-selection part here, as I do most of the time.)T… Full Story

Fear or Fear Not?My colleague John Rekenthaler recently wrote about the hazards of illiquid mutual fund investments. Long story short, mutual funds and illiquid investments are a potentially lethal combination, as funds can’t meet daily redemption requests if they can’t easily value and trade their holdings. The mousetrap breaks.Fortunately, investors don’t need to fret too much that their fund is a liquidity trap. The most popular funds and exchange-traded funds invest largely if not entirely in very liquid securities, like publicly traded large-cap stocks, government debt, and the like. If you own a target-date fund in your retirement plan--as many savers do--odds are it’s funneling most of your dollars into these very wide, deep markets. For example, here’s a snapshot of the asset mix of Vanguard’s … Full Story