Advisor Insights

Looking Beyond the Markets

Steve Wendel
Ryun Patterson

This is a special time to be an investor. There is an ever-increasing array of low-cost investing options, high-quality data, and a range of vehicles investors can use to pursue their strategies. The result is proliferating choice and decreasing costs. However, there is still significant work to be done, both in terms of increasing the number of people who invest and in terms of challenges current investors face in reaching their goals. At Morningstar, we’re undertaking a new research project to answer a straightforward, but important question: What is needed to help investors succeed beyond good investments? Here’s an overview of our research effort.

Challenges Potential Investors Face
Investing provides the best opportunity for the public to build long-term wealth by participating in the economic engine and growth of society. Yet according to Gallup, only 54% of Americans invest in stocks in any form. The vast majority of those who do, do so through 401(k)s and IRAs, often defaulted in by employers and owning low balances. Among Vanguard 401(k) account holders, for example, the median balance in 2016 was $24,713. Companies’ 401(k) default programs help employees invest, but they often haven’t engendered an active interest in one’s financial future.