Morningstar founder and CEO Joe Mansueto just retired after 33 years. The company he started in his Chicago apartment – and that turned him into a billionaire – is now the go-to source for information and analysis on mutual funds, exchange traded funds and all kinds of investment products in what is now a $16 trillion+ industry.
It’s hard to read Money magazine or any other financial publication without running across a reference to Morningstar and its investment research.
“Too much information”
In a recent interview, Mansueto talked about the wealth of investment information now available to the financial consumer, thanks in no small part to Morningstar research, and discussed whether there’s a downside to TMI – or “too much information.”
Here’s what he said:
“…Making institutional-quality information available to individuals at low or no cost … empowers investors to take control of their own financial future.
Actually there is one possible downside: with the flood of real-time information, people tend to trade too much. It’s much harder to be a buy and hold investor now. Information can induce people to sell too quickly. You want to ride through volatility. The biggest mistake in 2008-2009 was selling.”
Advocate for active and passive
Another surprise? Mansueto comes out as a strong advocate of both passive (index) and active (managed) investment strategies. “There’s a strong case for both active and passive funds,” he argues. “Active management still has great potential.”