Trevor Noah drops $27.5 million on Bel-Air showplace

Trevor Noah will spend 2021 in style. The day before New Year’s Eve, “The Daily Show” host shelled out $27.5 million for a contemporary mansion in Bel-Air, The Times has confirmed.

The comedian must have a thing for architectural showplaces. In 2019, he dropped $20.5 million on a similarly dramatic mansion also found in Bel-Air, but ended up selling it last summer for $21.7 million.

Noah bought this one from Mark Rios, an L.A. architect who built the 11,000-square-foot home for himself. Inspired by Japanese aesthetics, he told Architectural Digest that he went through 50 plans before settling on the final design and employed dark timbers based on a room he saw in Kyoto and extra-thick walls to protect against the noise of the city below.

From the street, the home appears as a series of cubes stacked together. Aerial photos from the back reveal that the estate sprawls across its hillside lot with a series of open spaces that adjoin or overlook a scenic backyard with a lawn and infinity-edge pool.


Stone, wood, bronze and glass combine in the common spaces including a spacious dining room and a lounge with custom wall coverings. Spread across three stories are six bedrooms, 11 bathrooms, an office, library, elevator, gym, spa, steam room and game room.

Up top, a movie theater leads to a rooftop terrace. A cabana with a bar and sun deck adjoins the pool out back.

Linda May and Drew Fenton of Hilton & Hyland held the listing. Jonah Wilson, also with Hilton & Hyland, represented the buyer.

A native of South Africa, Noah has found success in comedy and television. After joining “The Daily Show” as a correspondent in 2014, the 36-year-old succeeded Jon Stewart as host the following year and inked a five-year extension in 2017 — the same year he won a Primetime Emmy.



Everything to Consider Before You Sell Pokemon Cards

The resurgence of Pokemon has young adults rummaging through their closets in hopes of finding their old collection of trading cards. 

And, if they’re lucky, a rare card that could make them a fortune.

The 1997 Japanese anime-turned-trading-card-game-turned-video-game series holds a special place in the hearts of ‘90s kids, who cherished the furry creatures with elemental powers that could be traded and battled and hoarded for years to come. 

For Scott Pratte, a Pokemon enthusiast and card-trading expert, the hobby never dimmed. Pratte collects and sells some of the most treasured Pokemon cards in the world.

“I’ve done 7-figure deals,” Pratte says. “That’s just one deal, not even my lifetime” earnings.

Due to nondisclosure agreements, he can’t say exactly which cards have made him the most money, but he says that his trophy cards, aka the rarest Pokemon cards on the market, easily rake in upwards of $1 million.

Only a select few people hold these trophy cards, usually those who won Pokemon tournaments in the early 2000s and were awarded ultra limited edition cards. But there are a fair amount of more common Pokemon cards that could sell for hundreds or even thousands of dollars.

Pokemon Cards Worth Selling

The two biggest value factors to consider about old Pokemon cards are their rarity and condition.

In terms of rarity, “base-set” cards are where the money is for most collectors, and these cards are the most traded ones in the hobby. Set cards are “any card you can pull from a pack” bought from the store, says Pratte. The base set comprises the original 102 cards printed in 1999 and includes classic Pokemon like Pikachu, Blastoise, Charizard and Venusaur.

A complete first-edition base set in mint condition sold for $100,000 in December 2017. If you have a base-set card in your collection, there are a few visual indicators of its worth.

A graphic compares rare and common Pokemon cards
Illustration by Chris Zuppa and Adam Hardy
  1. Holographic cards: These are the most discernable at first glance. The background of the Pokemon illustration is shiny and reflective — not the whole card, only the picture of the monster. They’re typically referred to as “holo” cards, and only 16 of the original 102 are holo.

  2. First-edition cards: Directly next to the left corner of the illustration appears the “edition 1” logo. These cards were bought up shortly after initial release and remain some of the rarest and most sought-after cards.

  3. Shadowless cards: This version is almost identical to the first-edition prints but exclude the first-edition logo. If you don’t have a newer card for comparison, this is particularly hard to notice: the illustration box appears 2D. On newer cards, the picture box has a shadow along the right border to give it a 3D appearance.

  4. Unlimited cards: These cards are still old and rare, but they do not include the first-edition symbol and have an added shadow behind the illustration to give the picture box a 3D effect. To check if your card is part of the base set, look at the bottom right corner of the picture box. If you do not see one of the many later-added set symbols, then you have a base-set, Unlimited card.

The second important factor in a card’s value is the condition. If you do happen to have a first-edition, holographic base-set Charizard, you’re not guaranteed thousands of dollars. The price it fetches depends on how well the card has been taken care of.

If you have a card that you expect is worth more than $100, Pratte recommends getting it graded by Professional Sports Authenticator (PSA). 

Despite its name, the PSA grades all kinds of trading cards, including non-sports cards like Pokemon. PSA’s 10-point grading scale is accepted as the industry standard, and the company also publishes price guides to help determine a card’s worth. According to its current valuations, first-edition cards in perfect condition are valued at a minimum of $40. Those aren’t rarer, holographic cards either. A first-edition holo in mint condition can rake in between $1,000 and $24,000.

So why Pratte’s $100 limit? Well, the number isn’t a hard-and-fast rule, but the card-grading services offered by PSA will cost $20 or more per card, meaning a lower-value card doesn’t always merit the cost to get it authenticated.

“It’s a process,” says PSA spokesperson Terry Melia. “But it’s something that could reap big rewards in the end.”

In addition to grading the condition of the card, PSA ensures the card isn’t a forgery by using high-powered lights and magnifying equipment to check for tampering.

“There are a lot of forgeries and bogus merchandise out there,” says Melia.

Especially so online.

Where to Sell Pokemon Cards

After you’ve done some homework — checking the type of card, estimating its value and sending it in for authentication, if needed — you’re finally ready to sell.

“The main marketplace is for sure going to be eBay,” Pratte says. “Even if you’re someone who just stumbled upon your childhood collection, it’s really easy to take a couple of pictures [and] make a decent listing.”

The PSA’s grading system and authentication make selling online much easier. This process allays fears that the card is a fake and curbs arguments over its true condition. Each authenticated card comes in a protective case with the grade and barcode clearly visible at the top.

As Pokemon re-enters mainstream culture with the release of new video games and movies, expect to see an uptick in buying and selling activity of old cards. But interest doesn’t pick up overnight.

“It’s not binary in that sense,” Pratte says.

Instead, it’s a more gradual process where each new Pokemon-related release reminds twenty- and thirty-somethings of their childhood: the crinkling sound of ripping open a new pack of cards followed by a strong whiff of ink as they shuffle through the set, hoping to find something rare.

Pratte offers this caution about getting rich overnight: “Be realistic.”

“If you put in little or no effort back in the day,” he says, “you probably don’t have the homerun card.”

But as you rummage through your collection, remember that there’s no rush to purge now. Spend some time with your cards. See if they’re valuable. Consider getting them authenticated. Then decide if they’re worth selling. 

After two decades, Pokemon — and its card-collecting hobbyists — aren’t going anywhere anytime soon.

Adam Hardy is a former staff writer at The Penny Hoarder. 




14 Anti-Valentine’s Day Ideas for Singles Without Dates

Do you think Feb. 14 should be just another day on the calendar? The annual onslaught of heart-shaped objects, cheap chocolates, and exploitatively priced diamonds can leave those who are recently or perennially single — or just don’t like Hallmark holidays — feeling left out.

Valentine’s Day is commonly associated with love, romance, and mushy stuff. But the holiday actually has some pretty gory and brutal origins, according to Smithsonian Magazine and NPR. That alone is enough to make some people skip it.

And newer traditions, like Singles Awareness Day and Galentine’s Day, have shifted the holiday’s focus from a celebration of romantic couples to a more general celebration of love and friendship.

Whether you want to celebrate Anti-Valentine’s Day, Singles Awareness Day, or Galentine’s Day (technically, Feb. 13), you have plenty of options for having fun without a significant other.

Anti-Valentine’s Day Party & Activity Ideas

Don’t wait around for Cupid this Valentine’s Day. Plan your own Anti-Valentine’s Day party or get together. You can invite your single friends, your best friend, or keep the guest list to a minimum and only invite yourself.

Just remember to keep your festivities COVID-19-friendly this year. That’s easy if you’re celebrating solo. But if you want to celebrate with friends, keep the events virtual or socially distanced (preferably outdoors) or limit the guest list to your pandemic pod.

1. Swap Bad Ex Stories

Even if you’re currently unattached, you may have an ex who was — to put it mildly — memorable.

First Person Arts, a Philadelphia-based organization dedicated to the art of storytelling, holds an annual Valentine’s Day story slam called “Ex-Files.” Members of the audience sign up for the opportunity to tell a story about an ex. At the end of the story slam, judges (also from the audience) choose a winner, who walks away with a cash prize and the opportunity to compete at the Grand Slam, where they crown Philly’s citywide storytelling champ.

You can put together your own ex-themed storytelling event by gathering a group of friends to come up with your own (true) stories. Use the word “ex” loosely here. Your story can be about a terrible first date or a longer-term relationship.

When asking people to participate, remind them that the goal is to be entertaining or compelling. You’re not just gathering to complain about your exes. You want to make people laugh or cry.

While you’ll be delivering the stories aloud, you can write and practice them beforehand. If you or your friends have never taken part in a story slam, share some helpful links about learning to tell a story, such as Udemy’s quick guide to storytelling.

If you can’t gather in person, a story slam is the perfect event to hold virtually.

2. Kick Back With a Book About the Joys of Being Single

When you think of single people, what sorts of images come to mind? Maybe you see sad and lonely Bridget Jones singing along to Celine Dion in her pajamas or remember the comic strip “Cathy” and its somewhat neurotic hero.

Single people aren’t usually shown in the best light, at least as far as pop culture goes. We’re all desperate for a partner, constantly wondering to ourselves why no one loves us and why we’re still on our own.

Reality is quite a bit different from most depictions of singletons. In a 2020 post summarizing several studies, Varsha Swamy, a graduate student at Colorado State University notes that single people have more financial freedom than coupled folks, tend to have better-quality relationships with other family members and friends, and are more likely to be in better physical health.

It can help to remind yourself of those things. What better way to do that than by spending Feb. 14 reading a book that celebrates singleness?

Some titles to check out:

  • “Single on Purpose.” John Kim, aka The Angry Therapist, walks you through how to make your relationship with yourself the most important one you have, enabling you to feel fulfilled and complete.
  • “How to Be Alone.” Don’t be fooled by the title. Former Cosmopolitan sex and relationships editor Lane Moore’s debut book isn’t a how-to guide. Instead, it’s a memoir that sees Moore reflect on and come to terms with solitude.
  • “Year of Yes.” TV producer Shonda Rhimes (of “Bridgerton,” “Scandal,” and “Grey’s Anatomy” fame) spent a year challenging herself after her sister told her she never said yes to anything. The rest is history. While the book isn’t about singleness per se, it is an excellent reminder of the importance of getting out there and embracing life, whatever your current relationship status.
  • “All the Single Ladies.” Rebecca Traister, an award-winning journalist for New York magazine does a deep dive into the economic and social role single women play in the United States. It’s a well-researched and thought-provoking read.
  • “Sex From Scratch.” Bitch magazine editor Sarah Mirk’s advice isn’t specifically about singleness. But it’s a refreshing read for anyone who feels confined by societal expectations or wants to walk their own path, whether that means staying single or finding a partner (or partners).
  • “Going Solo.” Eric Klinenberg, a sociology professor at New York University, takes a close look at the relatively recent phenomenon of people living on their own and how solo living is changing society for the better.
  • “The Unexpected Joys of Being Single.” Catherine Gray, who also wrote “The Unexpected Joy of Being Sober” and several other “Unexpected Joy” books, explores the benefits and joys of being on your own, interviewing psychologists and neuroscientists to unearth the reasons for our unhealthy obsession with coupling along the way. Notably, she notes the benefits of singledom compared to constantly tethering yourself to unhealthy relationships.

3. Watch Your Favorite Movies (No Rom-Coms Allowed!)

Put a somewhat different spin on “Netflix and chill” this Valentine’s Day by holding a movie marathon, either for an audience of one or for a group of friends.

For a remote movie marathon, you can sync your streams with your friends’ using a service like Teleparty, which works on Disney+, Netflix, Hulu, and HBO, or Watch Party for Amazon Prime.

The less romantic the movie, the better. Stick with horror films if you can stomach them, or go for raunchy comedies. Whatever you do, leave the sappy romantic comedies and romance dramas for another day.

4. Go for a Long Walk

Walking is one of the most underrated forms of exercise. It’s also a relaxing way to enjoy some quiet time to yourself.

If you find yourself alone, stressed or a little down on Valentine’s Day, take a walk. It doesn’t matter where you go.

During the COVID-19 pandemic, I started taking a daily walk, wandering up and down the narrow streets in the neighborhoods near my home. Some days, I’d start my walk with my fists clenched, full of tension and stress. After 30 minutes to an hour of walking, my body relaxed.

If you don’t live in a city designed with walkability in mind, try visiting a nearby park with paths or trails. Bundle up if it’s cold, keeping your core warm so you don’t give up on the walk too soon. You can also bring along a thermos of tea or hot chocolate to keep yourself toasty.

5. Host a Solo Dance Party

During the pandemic, clubs are closed, meaning an at-home DIY-DJ dance party is your only option. That’s probably for the best since the idea of heading out to a crowded club on Valentine’s Day fills a lot of people with dread.

Instead, hold a private dance party at home. No one will be there to judge your dance moves or hit on you. And you don’t have to worry about the DJ playing terrible songs.

To DIY your dance party, make a playlist on Spotify featuring all the songs you love to dance to. You can also check out the mixes on Mixcloud to see what professional DJs have put together.

While the joy of an Anti-Valentine’s Day solo dance party is getting to dance around your living room in your socks and PJs, you can invite others to join in. Set up a Zoom call or similar, share your playlist with your favorite people, and get ready to dance the night away.

6. Show the World How Handy You Are

Need a bit of a self-esteem boost this Valentine’s Day? Do something handy around your house. I recently hung a mailbox, and I can’t put into words how accomplished successfully drilling into brick made me feel. The same is true of hanging perfectly level shelves, building a custom deck chair, or fixing the tattered trim on your home’s exterior.

Tackle that home improvement project that’s been languishing on your to-do list, or start planning a new one just for Valentine’s Day. When the project is complete, snap a few pictures of the “after” and post them to your favorite social media sites or share them in your group chats to revel in the praise.

7. Bake Sweet Treats

You don’t need a special loved one to enjoy decadent desserts on Valentine’s Day. If you love sweets, get into the kitchen and bake some goodies for yourself. Some ideas to try:

  • Red Velvet Cupcakes. With a delicate crumb and tangy cream cheese frosting to complement the intense red-tinged chocolate, Ina Garten’s red velvet cupcakes are truly decadent. The recipe makes 15, so you’ll have plenty to share or freeze for later. Get the full recipe on Food Network.
  • S’mores Nutella Crepes. If you love the roasty flavor of Nutella chocolate-hazelnut spread, combine it with buttery crepes and fluffy marshmallows for a grown-up version of a kid-friendly campfire classic. Get the full recipe on Sally’s Baking Addiction.
  • Flourless Chocolate Cake. Even those with a gluten allergy can indulge in chocolate cake. This flourless chocolate cake is super-rich and gluten-free. If you’re a chocoholic, it’s pretty much heaven on a plate. Get the full recipe from King Arthur Baking Company.
  • Conversation Heart Cookies. Iced cut-out cookies aren’t just for Christmas. Break out the heart-shaped cookie cutters and your piping bag and make some conversation heart cookies to celebrate Anti-Valentine’s Day. Get the full recipe from Martha Stewart. But instead of just icing them, think of Anti-Valentine’s Day words or phrases to write on the cookies, such as, “No, Thanks,” “Anti-Love,” or “Love Stinks.” Pipe the phrases on after the icing is fully dry.
  • Brownies and Ice Cream. You want a sweet treat, but your baking skills are lacking and Mr. or Ms. Right (probably) isn’t about to show up at your door with some pastries or cake. No problem. Buy a box of Ghirardelli brownie mix and prepare it according to the package directions (to avoid overbaking, take the brownies out when they’re set on the edges and a toothpick inserted in the center comes out with batter on it). Let them cool, then slice and top with your favorite ice cream, such as chocolate fudge ripple, mint chocolate chip, or strawberry.

8. Plan an Amazing Solo Getaway

This Feb. 14, show your love for yourself by planning a trip to take on your own. It doesn’t matter whether you really end up taking the trip. The point of the project is to get yourself thinking about what you want and what you enjoy.

When planning your solo travel adventure, hammer out the same details you would if it were a trip with a group of friends:

  • Where to Go. Dream big! Where would you go if money and travel restrictions were no object? It could be a backpacking trip across Europe, a stay at a beachside resort, or a trip to a rainforest in South America.
  • What to Do. Do you see yourself walking across England or the Coastal Path in Wales? Maybe you want to visit as many American museums or Japanese temples as possible. Perhaps your goal is to climb Everest or another challenging summit.
  • When to Go. When would you like to make this trip? Depending on the vacation’s scope, it might be something that requires years of planning and saving or a months-long hiatus from work.
  • Why You Want to Go. Why this trip? What about it appeals to you? Assessing why you want to go can spur you to action. It could inspire you to start looking up airfares or researching travel rules and requirements after you’ve sketched out a basic plan.

9. Visit a Museum

You don’t need a date to visit a museum. You might actually get more enjoyment from your visit — or at least a better appreciation of the art or artifacts you see — if you go alone.

Pick a favorite museum in your area, or virtually visit one in a farther-flung location on Valentine’s Day. Ignore any canoodling couples you see and focus on the work around you. Unless you really need it, skip the audio tour so you can zero in on what you see. The National Endowment for the Humanities questions the value of the placards next to the artifacts too. Just look at the art or artifacts.

Another benefit of visiting a museum solo is that you can decide when to leave and what you look at. If you’re going to a museum you’ve been to frequently, you can stick to the “greatest hits,” looking at the exhibitions that spoke to you on previous visits.

10. Throw a Used Dates Party

In an episode from season 3 of “Sex and the City,” Charlotte throws a “used dates” party. She asks guests to bring someone they used to date to the party in the hopes sparks would fly between other guests.

If you and your circle of single friends have exes you’re on good terms with, a used dates party can be a somewhat cynical but fun way to un-celebrate Valentine’s Day. Just make sure everyone attending the party knows the premise so no one ends up getting hurt or thinking their “date” wants to go out with them again.

Depending on circumstances, the party can be in person or over Zoom. If you’re doing a virtual version, be sure to give everyone a chance to introduce themselves or introduce their date. Set up breakout rooms so people can mix and mingle in smaller groups, just as they would at an in-person get-together.

11. Hold an Ex Bonfire

Do you have old Valentine’s Day gifts or Valentine’s Day cards from an ex lying around? To borrow another idea from late-1990s TV, throw an ex bonfire and burn those mementos.

You can have the bonfire on your own or invite other friends to join in. Just keep a few fire-safety rules in mind. Don’t burn the items inside your house. Instead, set up a fire pit outdoors at a safe distance from your home or any other flammable structures.

Also, don’t burn anything that could produce fumes, such as plastic objects or that mix CD your high school boyfriend made for you.

If the idea of an ex bonfire appeals to you, but you don’t have the means of safely lighting anything on fire, try destroying old mementos in other ways:

  • Shred an old greeting card or two.
  • Take a hammer to old gifts, such as vases or pottery.
  • Break an old mix CD or cassette in half.
  • Cut up an old T-shirt your ex gave you.
  • Paste a picture of their face to a piñata and smash away.
  • Fill a deli container with their gifts, dig a hole in the garden, and bury the past.

12. Enjoy a Solo ‘Romantic’ Dinner

Romance yourself this Valentine’s Day by making or ordering foods you don’t usually get to enjoy. Think lobster, wagyu beef, and caviar. It’s a chance to open the quality bottle of wine you’ve been saving or enjoy an indulgent dessert.

Go all out with your table setting. Put candles on the table, use a place mat and cloth napkin, and eat off real plates using real flatware. Also, dim the lights and put on your favorite music to set the mood.

While eating, tuck away your phone and other screens and focus on the food in front of you. Keep a journal or notepad beside you to write down thoughts on the food or ideas that come to mind as you eat. You can also set up a Zoom dinner date with another single friend or two if you prefer.

13. Get Artsy

Tap into your creative side on Valentine’s Day and get crafting. Depending on your skill level and confidence, you can:

For more simple adult-friendly art projects, go to Ann Arbor Art Center.

14. Enjoy a Solo Spa Day

Even if you’re not stressed about being single, 2020 was a long year, and we’re not out of the woods yet. Set up an at-home spa day to help yourself relax.

For a DIY mani-pedi, fill a portable basin with water and dissolve Epsom salts to soak your feet in. The Epsom will soothe and soften tired feet. You can also soak your fingertips in the Epsom salt solution, then give yourself a home manicure to tidy up your nails. For a little added fun, buy a flashy nail art kit and give your hands a blingy makeover.

If your skin needs some TLC, try an at-home facial. The Tatcha Luminous Dewy Skin Mask softens dry, flaky winter skin. If your pores need a bit of a detox, try Origins Clear Improvement active charcoal mask.

To set the mood for your spa day, dim the lights, light some scented candles, and turn on your favorite quiet music.

Final Word

Valentine’s Day is often a time for romance and a celebration of coupledom. But it doesn’t have to be. Whether you say you’re anti-Valentine’s Day or are celebrating Singles Awareness Day, you’re free to celebrate your awesomeness as a single person on Feb. 14.

Spend the day commiserating with friends about your dating history or nonexistent love life, or dedicate a few hours to focusing on yourself and what you want to get out of life. Whatever you do, remember that, at the end of the day, it’ll be Feb. 15, and Valentine’s Day will be behind you for another year.


Japan’s borders just closed even more tightly to foreigners

Japan’s borders just closed even more tightly to foreigners

Advertiser Disclosure

Many of the credit card offers that appear on the website are from credit card companies from which receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all credit card companies or all available credit card offers. Please view our advertising policy page for more information.

Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.


These Are the 3 Best Used Cars You Can Buy

A driver holds the keys to her used car
Photo by tommaso79 /

If safety, reliability and resale value top your list of attributes in a used car, consider a Honda Accord.

It was named the best used midsize sedan and earned the highest overall score — 9.1 out of 10 — of all the “best” non-electric passenger cars in a recent analysis by iSeeCars.

If an SUV is more your thing, another vehicle from a Japanese manufacturer — the Toyota Highlander — might be a good choice. It was named the best used midsize SUV and the best used third-row SUV and earned the highest overall score out of all the non-electric SUVs in the study, 8.9 out of 10.

If you are interested in an electric vehicle and willing to spend at least around $40,000 for a used car, consider the Tesla Model S. It was named the best used electric vehicle and earned an overall score of 9.6 out of 10 — the highest of any vehicle in iSeeCars’ analysis.

In arriving at its conclusions, the automotive website and search engine analyzed data from more than 24 million cars, focusing on how they performed in three areas:

  • Longevity
  • Resale value
  • Safety ratings from the National Highway Traffic Safety Administration

The Accord beat out other non-electric passenger cars for several reasons. Even as the popularity of sedans has faded, iSeeCars notes, the Accord remains a strong seller due to its longevity. According to iSeeCars:

“It is the longest-lasting vehicle in its segment, with above-average value retention and perfect safety scores. It also has a comfortable and roomy interior and excellent fuel economy.”

According to iSeeCars, these are your best used cars in the other categories included in the analysis:

  • Compact SUV: Honda CR-V
  • Luxury compact SUV: Acura RDX
  • Luxury midsize SUV: Acura MDX
  • Full-size SUV: Chevrolet Tahoe
  • Luxury full-size SUV: Lincoln Navigator
  • Luxury third-row SUV: Acura MDX
  • Midsize truck: Toyota Tacoma
  • Full-size truck: Toyota Tundra
  • Compact car: Honda Civic
  • Luxury compact car: Lexus IS 250
  • Luxury midsize sedan: Lexus ES 350
  • Large sedan: Toyota Avalon
  • Luxury large sedan: Buick LaCrosse
  • Sports car: Ford Mustang
  • Hybrid car: Toyota Prius
  • Hybrid SUV: Toyota Highlander Hybrid
  • Minivan: Honda Odyssey
  • Car under $5,000: Mazda Mazda3
  • Car under $10,000: Toyota Yaris

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


The 25 Best Low-Fee Mutual Funds You Can Buy

The Kiplinger 25 list of our favorite no-load mutual funds dates back to 2004, and our coverage of mutual funds goes all the way back to the 1950s. We believe in holding funds rather than trading them, so we focus on promising mutual funds with solid long-term records – and managers with tenures to match.

Over the past 12 months, U.S. stocks hit new highs, and then a viral pandemic snuffed out a nearly 11-year bull market, wiping out gains in just days … and then stocks bounced back into a new bull market just a few months later. The major indices have been roaring ever since, and have been regularly setting all-time highs of late.

That has many (but not all) of our Kiplinger 25 picks looking like their old selves.

Over the past decade, for instance, the 11 U.S. diversified stock funds with 10-year records returned an average of 13.4% annualized, right on par with the S&P 500 Index. Our seven bond funds as a group beat the Bloomberg Barclays U.S. Aggregate Bond Index over the past five and 10 years on an annualized-return basis.

Here are our picks for the best 25 low-fee mutual funds: what makes them tick, and what kind of returns they’ve delivered.

Data is as of Jan. 28, unless otherwise noted. Three-, five- and 10-year returns are annualized. Yields on equity funds represent the trailing 12-month yield. Yields on balanced and bond funds are SEC yields, which reflect the interest earned after deducting fund expenses for the most recent 30-day period.
– Fund not in existence for the entire period.

1 of 25

Dodge & Cox Stock

Composite image representing Dodge &amp; Cox's DODGX fundComposite image representing Dodge &amp; Cox's DODGX fund
  • Symbol: DODGX
  • 1-year return: 10.1%
  • 3-year return: 4.9%
  • 5-year return: 14.7%
  • 10-year return: 11.5%
  • Yield: 1.7%
  • Expense ratio: 0.52%

The focus: Cheap shares in large firms.

The process: Ten managers home in on well-established companies with attractive prices and long-term prospects. Portfolio managers are patient and invest with a three- to five-year horizon in mind.

The track record: The fund is prone to streaky returns because the managers’ out-of-favor bets can take time to play out. Be patient. Over the past 10 years, the fund’s 11.5% annualized return beats 95% of its peers, which are funds that invest in bargain-priced large-company stocks. But, like many value-oriented funds, it lags Standard & Poor’s 500-stock index, which boasts a 13.5% annual total return (price plus dividends).

The upshot: Markets are cyclical, and this investing style will come back.

2 of 25

Mairs & Power Growth

  • Symbol: MPGFX
  • 1-year return: 17.4%
  • 3-year return: 11.0%
  • 5-year return: 15.6%
  • 10-year return: 12.9%
  • Yield: 1.0%
  • Expense ratio: 0.65%

The focus: Upper Midwest firms of all sizes with durable competitive advantages, trading at bargain prices.

The process: Three managers spend months analyzing a company’s niche in its market and its management team before they buy. The fund tilts toward health care and industrial firms. While MPGFX does hold some tech and communications giants, such as Microsoft (MSFT), Google parent Alphabet (GOOGL) and chipmaker Nvidia (NVDA), the fund’s top 10 holdings aren’t as heavy on tech names as many large-cap U.S. stock funds.

The track record: The fund “struggles in strong markets and picks up ground in downturns,” says lead manager Andy Adams. Growth’s 15-year annualized return beats 70% of similar funds. But over the past 12 months, it beats about half.

The upshot: The pandemic may have roiled stocks last year, but the managers will “stick to their knitting,” says Adams.

3 of 25

Primecap Odyssey Growth

  • Symbol: POGRX
  • 1-year return: 25.6%
  • 3-year return: 10.6%
  • 5-year return: 19.4%
  • 10-year return: 15.0%
  • Yield: 0.4%
  • Expense ratio: 0.65%

The focus: Long-term bets on attractively priced, fast-growing firms.

The process: Five managers run a portion of assets independently. They all look for companies with better growth prospects than their share prices imply. And they buy for the long term: The typical holding period is 10 years.

The track record: This aggressive growth fund’s one-year return ranks behind 94% of its peers, in part because of big drops in Alkermes (ALKS) and Southwest Airlines (LUV). Smart investors will hold on. The fund’s 15-year record beats the S&P 500 by an average of 1.6 percentage points per year.

The upshot: These proven managers know how to block out the noise. We’re hanging in.

4 of 25

T. Rowe Price Blue Chip Growth

Composite image representing T. Rowe Price's TRBCX fundComposite image representing T. Rowe Price's TRBCX fund
  • Symbol: TRBCX
  • 1-year return: 30.5%
  • 3-year return: 17.1%
  • 5-year return: 22.5%
  • 10-year return: 17.6%
  • Yield: 0.0%
  • Expense ratio: 0.69%

The focus: Established companies with strong growth prospects.

The process: Manager Larry Puglia favors firms with sustainable competitive advantages over rivals, strong cash flow, healthy balance sheets and executives who spend in smart ways. The company’s top holding is (AMZN, 11.3% of assets), which has been one of the darlings of the COVID-period market, up 76% in 2020 versus 18% for the S&P 500. In April, Puglia took on an associate manager, Paul Greene, but says he has no plans to retire.

The track record: Puglia beats the S&P 500 index handily over the past three, five and 10 years – and, despite the recent market volatility, over the past 12 months as well.

The upshot: Blue Chip Growth was a prime beneficiary of the long bull market, but the fund has held up well since the market crashed. And over the long stretch of a full market cycle, Puglia has outpaced the S&P 500.

5 of 25

T. Rowe Price Dividend Growth

  • Symbol: PRDGX
  • 1-year return: 11.3%
  • 3-year return: 11.3%
  • 5-year return: 15.8%
  • 10-year return: 13.1%
  • Yield: 1.0%
  • Expense ratio: 0.63%

The focus: Firms with a mindset to increase dividend payouts over time.

The process: Manager Tom Huber focuses on large, high-quality companies that generate strong free cash flow (cash profits after capital expenditures) and have the capacity and willingness to raise their payouts.

The track record: PRDGX lags the S&P 500 by more than 6 percentage points over the past year. But its 15-year annualized return slightly edges out the S&P 500 and beats 86% of its peers (funds that invest in stocks with value and growth traits).

The upshot: T. Rowe Price Dividend Growth, an all-weather portfolio, keeps pace in good markets and holds up well in down markets.

6 of 25

Vanguard Equity-Income

Composite image representing Vanguard's VEIPX fundComposite image representing Vanguard's VEIPX fund
  • Symbol: VEIPX
  • 1-year return: 3.5%
  • 3-year return: 4.5%
  • 5-year return: 11.9%
  • 10-year return: 11.3%
  • Yield: 2.6%
  • Expense ratio: 0.27%

The focus: Dividend-paying stocks.

The process: Wellington Management’s Michael Reckmeyer runs two-thirds of the assets; Vanguard’s in-house quantitative stock-picking group manages the rest. Together, they build a portfolio of about 180 large companies, including Johnson & Johnson (JNJ), Procter & Gamble (PG) and JPMorgan Chase (JPM).

The track record: Health care stocks were a boon to the fund in 2019, but it has struggled over the past year, with a mere 3.5% gain. Nonetheless, over the past decade, VEIPX has beaten 93% of its peers (funds focused on large, value-priced firms). 

The upshot: The fund offers above-average returns for below-average risk.

7 of 25

DF Dent Midcap Growth

  • Symbol: DFDMX
  • 1-year return: 21.4%
  • 3-year return: 18.0%
  • 5-year return: 21.6%
  • 10-year return:
  • Yield: 0.0%
  • Expense ratio: 0.98%

The focus: Growing midsize companies.

The process: Four managers find solid businesses that dominate their industries, generate plenty of cash and are run by executives who spend wisely. The fund will hold on to shares as long as a firm is still growing fast. Shares in large-cap stock Ecolab (ECL) have been in the fund since 2011.

The track record: DFDMX has beaten the majority of its peers in seven of the past nine calendar years.

The upshot: Mid-cap stocks are often in the market’s sweet spot. Typically, these firms are growing faster than large companies and are less volatile than small businesses.

8 of 25

Parnassus Mid Cap

  • Symbol: PARMX
  • 1-year return: 12.4%
  • 3-year return: 9.6%
  • 5-year return: 14.6%
  • 10-year return: 11.9%
  • Yield: 0.2%
  • Expense ratio: 0.99%

The focus: Growing midsize firms that pass environmental, social and governance (ESG) measures.

The process: Two longtime managers, 18 analysts and a dedicated ESG team pick 40 stocks, with sustainability in mind. Hologic (HOLX), a diagnostics and medical imaging company, and Republic Services (RSG), a waste-collection service, are among the top holdings.

The track record: PARMX’s one-year return has beaten 68% of its peers. Over 10 years, the fund’s 12.0% annualized return beat 87% of its peers.

The upshot: At the moment, technology is the largest sector allocation at more than a quarter of assets. The fund is also heavily invested in industrials (21%) and healthcare (14%).

9 of 25

T. Rowe Price Small-Cap Value

  • Symbol: PRSVX
  • 1-year return: 15.5%
  • 3-year return: 7.5%
  • 5-year return: 15.3%
  • 10-year return: 10.8%
  • Yield: 0.4%
  • Expense ratio: 0.83%

The focus: Unloved, under-the-radar, bargain-priced small companies.

The process: Financially sound firms with a competitive edge over rivals and a strong management team make it into the fund. PennyMac Financial Services (PFSI), a national mortgage lender, and Belden (BDC), a maker of networking and cable products, are among PRSVX’s top holdings.

The track record: Small-cap value stocks have been the worst-performing U.S. category in recent years. But this fund is only a little behind the Russell 2000 index over the trailing five-year period.

The upshot: Small-cap stocks have gained some wind in their sails of late, but they still have some catching up to do compared to their large-cap brethren. PRSVX provides exposure to the some of the best values among smaller companies.

10 of 25

T. Rowe Price QM U.S. Small-Cap Growth

  • Symbol: PRDSX
  • 1-year return: 24.0%
  • 3-year return: 13.2%
  • 5-year return: 19.0%
  • 10-year return: 14.5%
  • Yield: 0.0%
  • Expense ratio: 0.79%

The focus: Small, growing companies.

The process: Using quantitative models (hence the “QM” in its name) developed initially while he was in academia, Sudhir Nanda and his team focus their sights on high-quality, highly profitable firms with reasonably priced shares. Samuel Adams beer crafter Boston Beer (SAM) and semiconductor-materials provider Entegris (ENTG) are among top holdings.

The track record: The fund has handily beaten the Russell 2000 small-cap stock index over the past three, five and 10 years.

The upshot: Since the end of 2019, shares in small companies are up less than 7%. But Nanda focuses more on an individual company’s business characteristics than on big-picture market or economic issues.

11 of 25

Wasatch Small Cap Value

  • Symbol: WMCVX
  • 1-year return: 20.1%
  • 3-year return: 8.4%
  • 5-year return: 16.7%
  • 10-year return: 12.1%
  • Yield: 0.0%
  • Expense ratio: 1.20%

The focus: Temporarily underpriced shares in small, fast-growing firms.

The process: This is a growth-ier value fund. The portfolio’s 60-odd stocks fall into one of three buckets: undiscovered, little-known companies; firms suffering a temporary setback; and cheap stocks in steadier, slow-growth businesses.

The track record: The fund is back in a groove, with a 20% gain over the past 12 months. Its three-, five- and 10-year records rank among the top 68%, 77% and 85% of similar funds, respectively.

The upshot: Despite their recent poor performance, small-cap stocks offer higher growth potential than their large-company brethren. To cash in, you must have a long-term view and be willing to bear some turbulence.

12 of 25

Fidelity International Growth

  • Symbol: FIGFX
  • 1-year return: 16.2%
  • 3-year return: 9.0%
  • 5-year return: 13.5%
  • 10-year return: 9.1%
  • Yield: 0.1%
  • Expense ratio: 1.01%

The focus: Growing foreign companies.

The process: Manager Jed Weiss homes in on firms with good growth prospects and strong niches in their businesses that give them pricing power – the ability to hold prices firm in bad times and raise them in good times.

The track record: Weiss outpaced the MSCI EAFE index in 10 of the past 12 calendar years. His fund’s average 10-year return beats 78% of all foreign large-company stock funds. FIGFX tends to hold up well in bad markets.

The upshot: Weiss picks stocks one at a time, but he says long-term growth theme are set to propel returns going forward. At the moment, top holdings include the likes of Japanese sensor firm Keyence and multinational chemicals firm Linde (LIN).

13 of 25

Janus Henderson Global Equity Income

HFQTX stock tickerHFQTX stock ticker
  • Symbol: HFQTX
  • 1-year return: 3.7%
  • 3-year return: 0.3%
  • 5-year return: –
  • 10-year return: –
  • Yield: 7.5%
  • Expense ratio: 0.97%

The focus: High income in international-company equities.

The process: The fund aims “to provide a consistently high level of income while investing in overseas markets with a value bias,” says Ben Lofthouse, one of the fund’s three comanagers. “We look for the dividend to be sustainable.” To that end, firms with strong balance sheets, steady profits and cash flow are ideal for the fund. “Profitable companies have downside protection when things don’t go as well,” says Lofthouse.

The track record: Relative to other large-company foreign value stock funds, Global Equity Income shines. Over the past three years, the fund ranks among the top 33% of its peers. It currently yields 7.9%, and the fund says the annualized distribution yield “has consistently been around 6%.”

The upshot: In recent years, the managers have put aside some value measures, such as share price in relation to book value (assets minus liabilities), in favor of other gauges, such as the price-to-cash-flow ratio, that they say are better predictors of future returns. That should help them better identify values going forward.

14 of 25

Baron Emerging Markets

  • Symbol: BEXFX
  • 1-year return: 33.7%
  • 3-year return: 6.2%
  • 5-year return: 15.6%
  • 10-year return: 7.3%
  • Yield: 0.0%
  • Expense ratio: 1.35%

The focus: Emerging-markets firms of all sizes.

The process: Manager Michael Kass favors profitable, growing firms with steady competitive advantages. Asian tech giants Samsung, Tencent Holdings (TCEHY) and Taiwan Semiconductor (TSM) top the portfolio.

The track record: After a decade of sluggish returns, peppered with a few good years (such as 2019), emerging-markets stocks got socked again, this time by the coronavirus. But they have roared back. Over the past year, the fund has beaten the MSCI Emerging Markets index by more than 6 percentage points.

The upshot: There’s still uncertainty about the impact of the coronavirus on emerging-markets economies, but BEXFX should continue benefiting as EMs recover.

15 of 25

AMG TimesSquare International Small Cap Fund

  • Symbol: TCMPX
  • 1-year return: 15.3%
  • 3-year return: 0.6%
  • 5-year return: 10.7%
  • 10-year return:
  • Yield: 1.4%
  • Expense ratio: 1.23%

The focus: Small firms in developed foreign countries.

The process: Four managers circle the globe to find best-in-class companies. Japan, the U.K. and Italy are the fund’s biggest country exposures.

The track record: Small-cap foreign stocks have not fared well compared with shares in larger companies in recent years, but TCMPX has beaten its benchmark, the MSCI EAFE Small Cap Index, since inception in 2013.

The upshot: Volatility doesn’t faze these managers. “We can’t guess what the market will do tomorrow, but we can invest in outstanding companies we think can continue to grow,” says lead manager Magnus Larsson.

16 of 25

Fidelity Select Health Care

  • Symbol: FSPHX
  • 1-year return: 25.9%
  • 3-year return: 17.5%
  • 5-year return: 18.1%
  • 10-year return: 18.9%
  • Yield: 0.5%
  • Expense ratio: 0.70%

The focus: Healthcare stocks.

The process: Eddie Yoon, manager since 2008, divides the portfolio into three parts: steady, growing firms, which make up the biggest chunk of the fund; fast-growing, proven companies with focused niches; and emerging biotech businesses.

The track record: Yoon’s 10-year annualized record beats 80% of all healthcare-focused funds.

The upshot: Yoon is getting defensive, piling into stable growers, while keeping an eye on innovative firms in areas such as gene and cell therapy.

17 of 25

Vanguard Wellington

Composite image representing Vanguard's VWELX fundComposite image representing Vanguard's VWELX fund
  • Symbol: VWELX
  • 1-year return: 9.1%
  • 3-year return: 7.6%
  • 5-year return: 11.7%
  • 10-year return: 9.5%
  • Yield: 1.5%
  • Expense ratio: 0.25%

The focus: A balanced portfolio of roughly 65% stocks and 35% bonds at the moment. Buy shares through Vanguard if you’re new to the fund; otherwise, it’s closed.

The process: Managers focus on large-company, dividend-paying stocks, high-quality government bonds and investment-grade corporate debt. The fund yields 1.5%.

The track record: Despite the corona­virus, the fund has beaten 82% of its peers over the past five years.

The upshot: The managers like a bargain. Before the pandemic, they were waiting for discounts in large banks and consumer names. Defensive moves on the bond side, such as focusing on the highest-quality corporate debt and setting aside cash for a correction, were well timed.

18 of 25

DoubleLine Total Return Bond

  • Symbol: DLTNX
  • 1-year return: 2.9%
  • 3-year return: 4.0%
  • 5-year return: 3.1%
  • 10-year return: 4.1%
  • Yield: 2.8%
  • Expense ratio: 0.73%

The focus: Mortgage-backed securities.

The process: Three managers balance government-guaranteed mortgage-backed bonds – which are sensitive to interest-rate moves (when interest rates rise, bond prices fall, and vice versa) but have no default risk – with non-agency mortgage bonds, which have some risk of default, but little interest-rate sensitivity.

The track record: The fund holds no corporate debt, which has hurt relative returns in recent years. Over the past five years, the fund’s 3.1% annualized return lags the Bloomberg Barclays U.S. Aggregate Bond index.

The upshot: Mortgage rates continue to sit near all-time lows. And the primary risk for most mortgage-backed bonds is the potential that mortgage holders will prepay their principal. We’re watching DLTNX closely. Meanwhile, it yields 2.8%.

19 of 25

Fidelity Intermediate Municipal Income

  • Symbol: FLTMX
  • 1-year return: 3.7%
  • 3-year return: 4.4%
  • 5-year return: 3.3%
  • 10-year return: 3.8%
  • Yield: 0.8%
  • Expense ratio: 0.35%

The focus: Debt that is exempt from federal income taxes, issued by states and counties to fund expenses such as schools and transportation.

The process: Four managers choose high-quality, attractively priced muni bonds. Managing risk is a priority, too.

The track record: This fund consistently posts above-average returns in its category. It rarely tops the charts, but it tends to hold up better in downturns.

The upshot: Muni bonds were richly priced until COVID-19 events fueled a selloff. But low rates and steady demand has propped prices back up. The fund yields 0.8%, or 1.4% for investors in the highest tax bracket.

20 of 25

Fidelity New Markets Income

  • Symbol: FNMIX
  • 1-year return: 2.5%
  • 3-year return: 1.5%
  • 5-year return: 6.3%
  • 10-year return: 5.5%
  • Yield: 4.1%
  • Expense ratio: 0.82%

The focus: Emerging-markets debt.

The process: Longtime manager John Carlson has retired, but his replacements, Jonathan Kelly and Timothy Gill, are longtime analysts for the fund. Not much will change. The fund will still focus on dollar-denominated government bonds, but Kelly says he will likely hold a more consistent position in corporate debt, now 15% of assets. Mexico, Turkey and Ukraine are its top country exposures.

The track record: Carlson’s 15-year return was in the top 23% of emerging-markets debt funds. We’re watching closely to see how Kelly and Gill do.

The upshot: Yields on emerging-markets debt are still near historic lows. But the exit path from the coronavirus is still uncertain, so while a recovery is expected at some point, a shadow remains over near-term economic growth projections in emerging countries. Even so, the fund’s yield, 4.1%, is attractive.

21 of 25

Metropolitan West Total Return

Composite image representing Metropolitan West's MWTRX fundComposite image representing Metropolitan West's MWTRX fund
  • Symbol: MWTRX
  • 1-year return: 6.8%
  • 3-year return: 6.0%
  • 5-year return: 4.3%
  • 10-year return: 4.4%
  • Yield: 0.9%
  • Expense ratio: 0.68%

The focus: High-quality intermediate-maturity bonds.

The process: Four bargain-minded managers make the big-picture calls on the economy and invest accordingly in investment-grade bonds (those rated triple-B or better).

The track record: The fund got defensive early, nipping returns in 2016 and 2017. But its conservative position – it’s currently loaded up on Treasuries, government mortgage-backed bonds and investment-grade corporates – has been a boon over the past year, especially since the start of 2020. Total Return’s one-year return beats 63% of its peers, and its 10-year annualized return beats 65% of its peers. Both returns beat the Bloomberg Barclays U.S. Aggregate Bond index.

The upshot: The managers are “patient and disciplined,” says Morningstar analyst Brian Moriarty, and that should continue to set this fund’s performance apart over the long term.

22 of 25

Fidelity Advisor Strategic Income

  • Symbol: FADMX
  • 1-year return: 6.9%
  • 3-year return: 5.1%
  • 5-year return: 6.3%
  • 10-year return: 4.8%
  • Yield: 2.4%
  • Expense ratio: 0.68%

The focus: The fund seeks to deliver more yield than the Bloomberg Barclays Aggregate U.S. Bond index by investing in a blend of government debt and junkier, higher-yielding bonds. The fund yields 2.4%.

The process: Comanagers Ford O’Neil and Adam Kramer make broad calls on which bond sectors to emphasize while specialists do the individual bond picking.

The track record: The fund has returned 6.3% annualized over the past five years, which has handily beaten the Agg index.

The upshot: These days, the fund holds mostly high-yield debt (roughly 46% of assets), government securities (20%) and emerging-markets bonds (15%).

23 of 25

Vanguard High-Yield Corporate

  • Symbol: VWEHX
  • 1-year return: 5.0%
  • 3-year return: 5.6%
  • 5-year return: 7.4%
  • 10-year return: 6.2%
  • Yield: 3.0%
  • Expense ratio: 0.23%

The focus: Corporate debt rated below investment grade.

The process: Manager Michael Hong keeps risk at bay by focusing on debt rated double-B, the highest quality of junk bonds.

The track record: The fund struggles to top the charts in go-go years, but it leads in so-so years. All told, its 10-year annualized return beats 86% of its peers. It yields 3.0%.

The upshot: High-yield rates, on average, were near historic lows until the pandemic bumped them above 6% in early March, though they’ve since come back down to record lows from there. (When rates rise, bond prices fall, and vice versa.) We’re watching VWEHX carefully.

24 of 25

Vanguard Short-Term Investment Grade

  • Symbol: VFSTX
  • 1-year return: 4.5%
  • 3-year return: 4.0%
  • 5-year return: 3.2%
  • 10-year return: 2.6%
  • Yield: 0.7%
  • Expense ratio: 0.20%

The focus: To deliver a higher yield than cash and short-term government bonds. VFSTX currently yields 0.7%.

The process: Three managers, who took over in April 2018, invest in high-quality corporate debt, pooled consumer loans and Treasuries, with maturities that range between one and five years.

The track record: The fund has returned 3.5% annualized over the past three years, which outpaces 87% of its peers.

The upshot: Low rates mean low yields for now. But pressing uncertainties, such as the unknown recovery time from coronavirus, negative rates in other parts of the world and geopolitical risks, make this fund a welcome haven.

25 of 25

TIAA-CREF Core Impact Bond

  • Symbol: TSBRX
  • 1-year return: 5.1%
  • 3-year return: 5.3%
  • 5-year return: 4.2%
  • 10-year return:
  • Yield: 1.0%
  • Expense ratio: 0.64%

The focus: Bonds issued by companies that meet high ESG standards, as well as projects that deliver a measurable environmental or social impact.

The process: Veteran bond picker and lead manager Stephen Liberatore invests just under two-thirds of the fund in attractively priced, high-quality debt issued by firms that pass his own carefully honed ESG measures. He devotes about 40% of the fund’s assets to fund projects related to alternative energy, affordable housing or community development. The fund was formerly called Social Choice Bond.

The track record: The fund’s 4.2% an­nualized return over the past five years is just slightly below similar bond funds and the Agg index.

The upshot: Investors don’t sacrifice much performance or yield with these ESG- and impact-focused bonds.


8 401(k) Investing Tips to Maximize Your 401(k)

The best kind of 401(k) plan is one that is used. The employer-sponsored retirement plan is typically easy to open and fund (with pre-tax dollars often deducted straight from your paycheck), and offers tax benefits vs. saving and investing in a brokerage account.

Understanding the nuances of this all-important savings vehicle may help catapult investors into full-blown expert territory, helping them maximize their 401(k) investing.

While everyone’s financial and retirement situation is different, there are some useful 401(k) investing tips that could be helpful to anyone using this popular investment plan to boost their retirement savings. These 401(k) should apply no matter what stage of retirement saving you’re in—as long as you’re participating in a 401(k).

1. Take Advantage of Your Employer Match
2. Consider Your Circumstances Before Contributing the Match
3. Understand Your 401(k) Investment Options
4. Stay the Course
5. Change Your Investments Over Time
6. Find—and Keep—Your Balance
7. Diversify
8. Beware Early Withdrawals

#1 Take Advantage of Your Employer Match

This first 401(k) tip is admittedly basic, but also probably the most important. Understanding your employer match is essential to making the most of your 401(k).

Also called a company match, an employer match is a contribution made to your 401(k) by your employer, but only when you contribute to your account first.

Withdrawing money early from a 401(k) can result in a hefty penalty.

There are some exceptions, depending on what you’ll use the withdrawn funds for. For example, qualified first-time home buyers may be exempt from the early distribution penalty. But for the most part, if you know you need to save for some big pre-retirement expenses, it may be better to do so in a non-qualified account.

Another consideration is whether to put all of your eggs in your 401(k) basket. Of course, these accounts can offer big benefits in terms of tax deferral and may come with a matching contribution from your employer as well. But individuals who are eligible to contribute to a Roth IRA, may consider splitting contributions between the two accounts.

While 401(k) contributions are made with pre-tax dollars and taxes are paid when you make a withdrawal, Roth IRA contributions are the opposite—taxed on the way in, but not on the way out (with some exceptions).

If you’re concerned about being in a higher tax bracket at retirement than you are now, a Roth IRA can make sense as a complement to your 401(k). The caveat is that these accounts are only available to people below a certain income level.

#3 Understand Your 401(k) Investment Options

The first step is contributing to a 401(k); the second is directing that money into particular investments. Typically, plan participants are able to choose from a list of mutual funds to invest in for the long-term. Some 401(k) plans may give participants the option of a lifecycle fund or a retirement target-date fund.

To pick the right mutual funds, you may want to consider what is being held inside those mutual funds. For example, a mutual fund that is invested in stocks means that you are now invested in the stock market.

With each option, ask yourself: Does the underlying investment make sense for your goals and risk tolerance? Are you prepared to stay the course in the event of a stock market correction?

You may also want to consider the fees charged by your mutual fund options, because any management fee will be subtracted from your potential future returns. When analyzing your options, look for what is called the expense ratio—that’s the annual management fee.

#4 Stay the Course

Many investors will have at least a part of their 401(k) money invested in the stock market, whether through mutual funds or by holding individual stocks.

If you’re not used to investing, it can be tempting to panic over small losses. This is also known as a day-trader mentality, and it is one of the worst things you can do—especially with a 401(k). Remember, investing in the stock market is generally considered for the long haul.

Getting spooked by a dip (or even a stock market crash like the one in 2008) and pulling your money out of the market is generally a poor strategy, because you are locking in what could possibly amount to be “paper” or temporary losses. The thinking goes, if you wait long enough, that stock might rebound and your loss will go away. (Though as always, past performance is no predictor of future success.)

It may help to remember that although stock market crashes are disappointing, they are a normal and natural part of the growth cycle. Remember, the goal is to be patient and let the stock market do its thing.

Some investors find it helpful to only check their 401(k) balance occasionally, rather than obsess over day-to-day fluctuations.

#5 Change Your Investments Over Time

Lots of things change as we age, and one of the most important 401(k) tips is to change your investing along with it. While some principles of retirement saving are eternal—use the employer match as much as you can, don’t trade too much, pay attention to fees—some 401(k) advice is specific to where you are relative to retirement.

While everyone’s situation is different and economic conditions can be unique, one rule of thumb is that as you get closer to retirement, it makes sense to shift the composition of your investments away from higher risk but potentially higher growth assets like stocks, and towards lower risk, lower return assets like bonds.

There are types of funds and investments that manage this change over time, like target date funds, that make this strategizing easier. Some investors choose to make these changes themselves as part of a quarterly or annual rebalancing.

#6. Find—And Keep—Your Balance

While you may want your 401(k) investments to change over time, at any given time, you should have a certain goal of how your investments should be allocated: a certain portion in bonds, stocks, international stocks, American stocks, large companies, small companies, and so on.

But these targets and goals for allocation can change over time even if your allocations and investment choices don’t change. That’s because certain investments may grow faster than others and thus, by no explicit choice of your own, they take up a bigger portion of your portfolio over time.

Rebalancing is a process where, every year or every few months, you buy and sell shares in the investments you have in order to keep your asset allocation where it was at the beginning of the year.

For example, if you have 80% of your assets in a diversified stock market fund and 20% of your assets in a diversified bond fund, over the course of a year, those allocations may end up at 83% and 17%.

To address that, you might either sell shares in the stock fund and buy shares in the bond fund in order to return to the original 80/20 mix, or adjust your allocations going forward to hit the target in the next year.

#7 Diversify

In addition to employer matching, diversification is considered one of the few “free lunches” for investors. By diversifying your investments, you can help to lower the risk of your assets tanking while still being exposed to the gains of the market.

difference between stocks and bonds.)

Within stocks, diversification can mean investing in US stocks, international stocks, big companies, and small companies. But rather than, for example, owning shares in one big American company, one big Japanese company, a multi billion-dollar company, and a smaller company, it might make sense instead buy diversified funds in all these categories that are diversified within themselves—thus offering exposure to the whole sector without being at the risk of any given company collapsing.

#8 Beware Early Withdrawals

Perhaps the most important 401(k) tip is to remember that the 401(k) is designed for retirement, with funds withdrawn only after a certain age. The system works by letting you invest income that isn’t taxed until distribution. But if you withdraw from your 401(k) early, much of this advantage disappears.

With few exceptions, the IRS imposes a 10% tax penalty on withdrawals made before age 59½. That 10% tax is on top of any regular income taxes a plan holder would pay on 401(k) withdrawals. While withdrawals are sometimes unavoidable, the steep cost of withdrawing funds should be a strong reason not to, as it wipes away much of the gains that can come from 401(k) investing.

If you would like to buy a car or a house, or pay off debt, there are other options to explore. First consider pulling money from any accounts that don’t have an early withdrawal penalty, such as a Roth IRA (contributions can be withdrawn penalty-free as long as they’ve met the 5-taxable-year rule) or a brokerage account.

The Takeaway

If you have a 401(k) through your employer, you may want to consider taking advantage of it. Not only might you have a company match, but automatic contributions taken directly from your paycheck and deposited into your 401(k) may keep you from forgetting to contribute.

That said, a 401(k) is not the only option for saving and investing money for the long-term. One such option is a Roth IRA. While there are income limitations to who can use a Roth IRA, these accounts also tend to have a bit more flexibility when withdrawing funds than 401(k) plans. (If you don’t qualify for a Roth IRA, ask your tax professional for additional guidance.)

Another option is to open an investment account that is not tied to an employer-sponsored retirement plan. Sometimes called a brokerage or after-tax account, these accounts don’t have the special tax treatment of retirement-specific accounts, but can still be viable ways to save money for people who have maxed out their 401(k) contributions or are looking for an alternative way to invest.

Find out how SoFi Invest® can help you start saving for your future.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC,

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.