We assess the Morningstar rating for stocks through three lenses.
4- and 5-star stocks are harder to come by in today's market, but a few stock-specific stories are still out there.
China's economic rebalancing means an overvalued basic materials sector, but consumption growth creates opportunities in areas such as telecom.
It's getting harder to find undervalued stocks with so much optimism factored into stock prices.
Given general valuation levels, careful individual stock selection is more important now.
Following the Trump victory, the market has incorporated expectations for stimulus, higher inflation, and higher interest rates.
The market overall looks slightly overvalued, with basic materials and energy the most overheated, and more value in healthcare and financial services.
Some fears are overblown, leading to attractive valuations in financial services and consumer cyclical.