R E T I R E M E N T

WhyFinancial

AdviceIs About

to GetBetter

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5 GreatFamily

VacationDeals

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The 21 Most ValuableCareer Skills Now—and How to Get Them P . 4 2

Team MONEY Gives3 Job Seekersa Makeover P . 5 3

GIVEYOURSELFA RAISE

I N V E S T I N G

FundsThat CanHelp YouBeat theMarket

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J U N E 2 0 1 6

I’m glad I missed my delivery. Said no one ever.Nobody likes to worry about missing a delivery. UPS Access PointTM locations

give today’s customers the convenience of picking up and dropping off

deliveries at more than 8,000 neighborhood businesses across the country.

Just one of the many ways UPS is helping companies solve for today’s rising

customer expectations. See how we can help you at ups.com/solvers

Copyright ©2016 United Parcel Service of America, Inc.

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C O V E R S T O R Y

F E AT U R E S

42The21 MostValuableCareerSkillsOur exclusive new studyIDs the know-how that canhelp you land a fat raise ornab a sweet promotion.by Cybele Weisser, Kerri Anne Renzulliand Megan Leonhardt

53Dream CareerMakeoversGet inspired by threehead-to-toe overhauls.by Elaine Pofeldt andKerri Anne Renzulli

62Five Ways to Win

the Fund RaceProfessional stock jockeys facelong odds. Follow these rules to

harness what they do best.by Penelope Wang

68The Best Tripsfor Family Fun

From theme parks to beachgetaways, here are five value-

packed summer vacations that willplease the kids—and your wallet.

by Stirling Kelso

Photograph by ja m i e c h u n g

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Visit us at mutualofamerica.com or call us at 1-866-954-4321.

America’s emblemstands for great strengthand long life.

With that in mind, let’s talk retirement.

J U N E 2 0 1 6 m o n e y . c o m 5

J U N E 2 0 1 6 V O L U M E 4 5 , N U M B E R 5

Plan

Retire

Invest

C O L U M N S40THE INTELLIGENT

I N V E S T O R

Seeing theUpside ofBad NewsInvestors oftenoverreact toone-time setbacks.These funds aim tohelp you profit fromsuch short-termthinking.by JohnWaggoner

80 M O N E Y W E L L S P E N T

My Fresh-Air FundA devoteddaughter learnsthe value of anover-the-topsplurge just whenher sensible-spending dadneeds it most.by SusiePoppick

30 H O M E

How to BeatBack New-Home BillsFirst-time buyersunderestimate allthe extras that canblow a housingbudget. Before youbid on your newplace, factor inthese costs too.by Alexavon Tobel

F I R ST

25 / SCORE A BIGRETAIL DEAL

Learn how to game the systemand save every time you shop.

28 / ASK THE EXPERTSpousal Roth IRA rules,financial aid tips, and more.

29 / ARE “BOOT CAMPS”WORTH THE COST?

Specialized college coursespromise to shape up studentsbefore they’re shipped out.

33 / THE RIGHTTIMES TO ACT

To retire well, know your bestmoves at these five key ages.

35 / A WIN ON ADVICEA new rule should improve thequality of investment guidance.

37 / THE RX FORBIOTECH

In the wake of the burstbubble, how to invest inbeaten-down health care.

39 / X-RAY: FIDELITYLOW-PRICEDSTOCK

This massive small-companyfund defies convention.

6 / Money.com8 / Editor’s Note11 / Letters & Comments76 / The Numbers

IN THIS ISSUE

17 / THE BIGNUMBER

18 / FAST TAKES

19 / SOCIALCURRENCY

20 / THE STATS

22 / TECH

68

Cover photograph byJAMIE CHUNGSet design by Brian ByrneWardrobe by Charlotte Sims

MONEY (ISSN 0149-4653) is published monthly (except one in January/February) by Time Inc. PRINCIPAL OFFICE: 225 Liberty Street, New York, N.Y. 10281-1008. Periodicals postage paid at New York, N.Y. and additional mailing offices.POSTMASTER: Send all UAA to CFS. (See DMM 507.1.5.2). NON-POSTAL AND MILITARY FACILITIES: Send address corrections to MONEY Magazine, P.O. Box 62120, Tampa, FL 33662-2120. Canada Post Publications Mail Agreement No. 40110178.Return undeliverable Canadian addresses to: Postal Station A, P.O. Box 4326, Toronto, Ontario M5W 3H4. GST No. 888381621RT0001. © 2016 Time Inc. All rights reserved. Reproduction in whole or in part without written permission isprohibited. MONEY is a registered trademark of Time Inc. U.S. subscriptions: $15 for one year. SUBSCRIBERS: If the Postal Service alerts us that your magazine is undeliverable, we have no further obligation unless we receive a correctedaddress within two years. Your bank may provide updates to the card information we have on file. You may opt out of this service at any time. CUSTOMER SERVICE AND SUBSCRIPTIONS: For 24/7 service, go to MONEY.COM/CUSTOMERSERVICE. You canalso call 800-633-9970; write MONEY, P.O. Box 62120, Tampa, FL, 33662-2120; or email help@money.customersvc.com. MAILING LIST: We make a portion of our mailing list available to reputable firms. If you would prefer that we notinclude your name, please call or write us. PRINTED IN THE U.S.

Beach lovers can digup deals in priceyCape Cod this year.

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MONEY INYOUR IN-BOX!

Sign up for our weeklynewsletters: Ask theExpert, Retire With Money,and our latest, the MONEYCollege Planner.money.com/newsletters

NEW! MONEY CALCULATORS

For mortgages, budgeting,retirement, college, and more.money.com/calculators

YOUR WEDDING GIFTQUESTIONS ANSWERED

If you’re attending a weddingthis summer, don’t stress: Ouretiquette experts tell you when,whether, and how much to give.money.com/weddings

“DUMB MONEY” SERIES

MONEY writer Taylor Tepperhelps make you smarter aboutfinances by answering theeveryday questions you maybe too embarrassed to ask.money.com/video

THE ULTIMATE GUIDE TO ADULTINGThe most important financial and career advice new college grads need to know, from how to set a budget andnegotiate a starting salary to the best way to save for retirement (yes, retirement). Plus, in an exclusive survey,students respond to the question, How prepared are you for the real world? money.com/newgrads

C O L U M N I ST

WALTER UPDEGRAVEoffers straight talk andeasy-to-understandretirement advice.

@realdealretire

Before investing in any mutual fund or exchange-traded fund, you should consider its investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.Past performance is no guarantee of future results.ETFs are subject to market fl uctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.In general, the bond market is volatile, and fi xed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry infl ation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Lower-quality fi xed income securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Foreign investments involve greater risks than U.S. investments, and can decline signifi cantly in response to adverse issuer, political, regulatory, market, and economic risks. Any fi xed income security sold or redeemed prior to maturity may be subject to loss.The municipal market can be affected by adverse tax, legislative, or political changes and the fi nancial condition of the issuers of municipal securities. Interest income generated by municipal bonds is generally expected to be exempt from federal income taxes and, if the bonds are held by an investor resident in the state of issuance, state and local income taxes. Such interest income may be subject to federal and/or state alternative minimum taxes. Investing in municipal bonds for the purpose of generating tax-exempt income may not be appropriate for investors in all tax brackets. Generally, tax-exempt municipal securities are not appropriate holdings for tax-advantaged accounts such as IRAs and 401(k)s.Hypothetical yield curve: A chart that plots the yields of similar bonds across different maturities. The yield, as of 8/14/15, for commonly referenced indices representing bonds with 1–5 year maturities, is as follows: U.S. Treasury securities (1.01%), Barclays 1–5 Year Municipal Bond Index (1.11%), Barclays 1–5 Year U.S. Credit Bond Index (2.05%), and Bank of America Merrill Lynch 1–5 Year BB/B Cash Pay Index (5.99%). Sources: Barclays Live, Bank of America Merrill Lynch.1 Interest rate sensitivity is based on the annualized standard deviation of monthly total returns for the 10-year period ending February 2014, with the overall bond market represented by the Barclays U.S. Credit Bond Index (all maturities), and short-term bonds represented by the subset of bonds within the index with maturities of 1–5 years (Barclays 1–5 Year U.S. Credit Bond Index). Source: FMR.

2 Frequency of reinvestment based on the percentage of bonds maturing within 3 years as of 8/14/15 — 22.54% for the overall bond market (represented by Barclays U.S. Credit Bond Index), and 55.42% for short-term bonds (represented by Barclays 1–5 Year U.S. Credit Bond Index). Source: FMR.Fidelity Brokerage Services LLC, Member NYSE, SIPC. © 2016 FMR LLC. All rights reserved. 686815.6.0

The strong case for short-term bonds as interest rates rise.

Potential interest rate increases often present opportunity. At Fidelity, we use our industry-leading bond research and analysis to help you generate additional income and reduce risk.

Fidelity.com/shortbondfunds800.FIDELITYOr call your Advisor.

Consider these short-term bond investments for your portfolio

Short-term bonds have offered:

45%less sensitivity to interest rate changes than the overall U.S. credit bond market1

2.4xmore frequent reinvestment than longer maturity bonds2

1mo 3mo 6mo 1yr 2yr 3yr 5yr 7yr 10yr 20yr 30yr

Time to Maturity

Yiel

d %

Short-termbonds

FIDELITY® LIMITED TERM BOND FUND FJRLX

FIDELITY® LIMITED TERM BOND ETF FLTB

FIDELITY® SHORT DURATION HIGH INCOME FUND FSAHX

FIDELITY® CONSERVATIVE INCOME MUNICIPAL BOND FUND FCRDX

Write the editor: editor@moneymail.com

BEYOND THE BASIC EXPERTISE you need to succeed in yourjob, what is the most important skill you could add toyour repertoire to advance your career—that is, to get araise, nab a promotion, or derive greater satisfaction fromyour work? That is the question we aim to answer in this

month’s cover story, “The 21 Most Valuable Career Skills.”Coming up with the list was a daunting exercise. Partnering with

the compensation experts at PayScale.com, a five-person editorialteam led by assistant managing editor Rachel Elson analyzed thesalary and job description data of 54 million user profiles covering15,000 different positions across 350 industries to determine, allelse being equal, which of 2,300 professional skills were most closelycorrelated with higher pay and career achievement. You’ll find thefascinating results starting on page 42, along with advice on howto acquire the know-how most in demand in your profession.

All of which prompted me to think about which job skills havebeen or would be most helpful to me, and to be curiousabout the same for the people I work with. So I asked.

Not surprisingly, many of our answers underscorethe findings in the cover story. Becoming more techsavvy was a consistent theme, from mastering computercode (software development is No. 6 on our list) to sta-tistical analysis and data mining (Nos. 1 and 2). As writerKaitlin Mulhere noted, “I read so many studies, some-times with conflicting claims, that it’d be really helpfulto speak the language of researchers more fluently.”Elson named systems troubleshooting (No. 20), sayingthat the ability “to look at an operation and see wherethe bottlenecks and stress points are makes me morevaluable to my managers.” (True that, Rachel.)

My most valuable added skill, I think, is my entrepre-neurialism, which lets me think up new business ideas(No. 21) that help the bottom line, even though that’s notin my job description. Acting ability and salesmanshipwere other skills not necessarily equated with journal-ism that MONEY staffers thought would be useful.

DIANE HARRIStwitter.com/dianeharris

What It Takes toGet Ahead Now

READY FOR HIS CLOSE-UP To go from his job as head of a small nonprofitto a bigger professional stage, Gerald Sorokin needs to look the part.Below, a local Iowa City styling and makeup team preps him for our cam-eras. Find his story, plus two other career makeovers, on page 53.

My favorite answer identified a skill not onour list but that perfectly captures its intent:adaptability. “It’s essential to always be learn-ing, to think of yourself as never quite done,to consider yourself and your career in per-manent beta mode,” said senior writer BradTuttle. “You have to be able to adapt.”

Our career special report aims to help youdo just that. I hope you find it useful and en-lightening, and the rest of the issue as well.

8 m o n e y . c o m J U N E 2 0 1 6

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LETTERS &COMMENTS

PURPLE WART HOGS

©2016 Zillow Group. All rights reserved.J U N E 2 0 1 6 m o n e y . c o m 11P

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Write to MONEY: letters@moneymail.com

A table in “Take Charge of Your Retire-ment” (April) misstated the maximumannual contribution for a solo 401(k). It is25% of compensation—not 25% ofprofits—plus $18,000, up to $53,000.

CORRECTION

DON’T LEAVE THE BANK ALONEWhen you pay off loans earlyby making extra payments oramounts [“Adulting: A FinancialCheat Sheet,” May], it is notenough to specify that it is togo to the principal and not theinterest. You sometimes haveto send that extra payment to adifferent address—sometimesto another state!—that is ear-marked for that specificpurpose. Call to find that out,and be persistent!

kirby leong, San Lorenzo, Calif.

YOUR 401(k): ALL IN GOOD RHYME“It’s Okay to Stray from Your401(k)” [May] is a catchy title,but isn’t that what got mostAmericans into the financialmess they are in? The author’s

conclusion that liquidity andflexibility are two of the greatestbenefits money can buy missesthe point that you have to havesaved that money in the firstplace. A better title: “If you strayyou pay at the end of the day.”

chris drahos, Wyoming, Mich.

GET THEM WHEN THEY’RE YOUNGMy 11-year-old son, Matthew,picked up a copy of MONEY inmy home office. He was intriguedby the cover story on travel[“Best in Travel 2016,” April].And since it’s a struggle to gethim to complete his required30-minute daily reading, I wasthrilled when he not only readthat article but also proceeded toread the rest of the magazinecover to cover. So we are nowsubscribers! I hope that hisinterest is the beginning of myfuture retirement.

debra loew, Chappaqua, N.Y.

RE: SPRING REAL ESTATE GUIDE [MAY]

I found your chart showinga modest 1.6% housinghome price increase inWashington, D.C.—due toa (supposedly) “smallerfederal government”—intriguing. While valuesmay have leveled off, I’ve

also read there’s no shortage of buyers. And if ourrecent federal tax bill is any indication of thegrowth and housing market in Washington, thenD.C. isn’t getting any smaller. mimi vangel, Wadsworth, Ohio

vw.com Simulated image. *Driver Assistance features are not substitutes for attentive driving. See Owner’s Manual for further details and important limitations. For more information, visit www.iihs.org. ©2016 Volkswagen of America, Inc.

Just because you don’t see it, doesn’t mean it isn’t there.Introducing the newly redesigned Volkswagen Passat with Blind Spot Monitor, one of seven available Driver Assistance features.* Passat. Where family happens. When equipped with

optional Front Assist

Photograph by b i l l d i o dato

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E J U N E 2 0 1 6THE BIG NUMBER + FAST TAKES + SOCIAL CURRENCY + THE STATS + TECH

Planning for retirement can be daunting, and it doesn’t help thatmany online calculators produce “extremely misleading” results,according to a recent Texas Tech study. It found that 25 of 36 pop-ular online tools designed to project how much you’d need to saveunderestimated the size of a couple’s targeted nest egg. Beforeyou bank on any retirement calculator, keep in mind these tips:

REDO THE MATH

LOOK BEYOND ASSETS Financial planner Harold Evensky,one of the study’s authors, says his team didn’t namethe best calculators in part because what’s “best” de-pends on which factors most affect your personal situa-tion, such as tolerance for risk. But all good tools willconsider marital status and overall health, which canaffect your life span (and therefore your savings goal).

WIDEN YOUR NET One way to find the right calculator:Test several of them. That will help you spot theoutlier tools that produce inaccurate results. You’llalso get a sense of the ones that ask the most rele-vant questions for you.

GO FOR A PRO Planning is usually most complex withinfive to 10 years of retirement, so consider hiring afinancial planner then, says David Blanchett, head ofretirement research at Morningstar. Expect to spendat least $100 for the initial consultation. —KERRY CLOSE

Popular retirementtools that are faulty

J U N E 2 0 1 6 m o n e y . c o m 17

FAST TAKESF I R S T

LOOKING TO SWITCH BANKS? Check out MONEY’scomprehensive guide at money.com/bestbanks.

IN RECENT YEARS, the interest offered by the typicalchecking account has dipped to nearly 0%. But a newBankrate survey found 56 high-yield checking accountsat U.S. banks that offer an average yield of 1.65%.

Before you switch to a higher-earning checking ac-count, consider a few of the ground rules. Many banksrequire a minimum number of debit card transactionsper month, usually 10. Many also require direct depositof your paycheck and provide only electronic checkingstatements. High-yieldchecking accounts tendto have balance caps be-tween $500 and $25,000(the average maximumis $16,336). Finally, manyaccounts are offeredat regional banks andcredit unions and requireaccount holders to livein a certain area to beeligible. That said, switching to a high-yield accountmay be worth your while. A 1.65% return on $25,000would earn $416 a year. (For a list of banks, search for“2016 high-yield checking survey” on bankrate.com.)

The move to higher-yield accounts isn’t limited tochecking. Wall Street powerhouse Goldman Sachs justlaunched a savings account with a generous 1.05%yield. It’s open to anyone and requires a minimumbalance of just $1. —DENVER NICKS

18 m o n e y . c o m

WHY SO SAD,RETIREES?The golden yearsaren’t as golden asthey used to be,according to a newstudy from theEmployee BenefitResearch Institute.

Between 1998and 2012, the num-ber of retirees whosaid they were

retirement was“very satisfying.”

The drop in thenumber of happi-est retirees is notlimited to any par-ticular economicgroup either. “Thisis clearly a moregeneral trend,”says study authorSudipto Banerjee.“What’s not yetclear is exactly why

Illustration by sar i na f i n k e l s t e i n

this is happening.”There are ways

to brighten theblues. Studies findthat being busy—with a hobby, atwork, or socializ-ing—correlates withbeing happier. Yetretirees who livedwithin 10 miles oftheir kids were lesshappy. Aren’t fami-lies great? —D.N.

BANKING

Get a DecentReturn on YourChecking—Finally

Q U O T E D

“Money is bestspent on someonewho needs it.”Prince, on his philosophy on giving back,as quoted in “Here’s What Prince Had to SayAbout Money at the Height of His Fame”on Money.com.

“very satisfied”fell to 48.6%, downmarkedly from1998, when 60.5%of respondents said

IT’S MONEY IN THE BANKAnnual interest earned

on $25,000

$28TYPICAL

CHECKINGACCOUNT

YIELD0.11%

AVERAGE HIGH-YIELD

RATE 1.65%

$416

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FACEBOOKQUESTIONOF THEMONTH

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SOCIAL CURRENCYF I R S T

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Have a dis-cussion assoon as youknow you

might want a seriousrelationship but beforeany commitmentsbetween you are made.Be sure to explain whythe bankruptcy hap-pened and what you’vedone to improve.

viola cooperTucson

From the beginning!There is nothing worsethan starting a relation-ship with a secret.

eric joubertWhitman, Mass.

When you are interestedin a long-term relation-ship, you need to have adiscussion about money,including not only badpast decisions, but alsowhether you are a saveror spender, how big yourcredit card balances are,and your views on savingfor retirement.

bill hutchinsonCarmel, Ind.

This isn’tsomethingto lead offwith on a first

date, but don’t over-think it. A lot of peopledeclared bankruptcyafter the Great Reces-sion. You may find outthat your date has alittle story to tell too.

john dirgodeweese

Seattle

Don’t tell her about it atall. Just be more consci-entious about how you

are handling yourmoney so she canobserve, appreciate,and hopefully take aliking to you.

george carreraSan Antonio

If your bank-ruptcy wasseven to 10years ago

and has already fallenoff your credit report,you probably don’tneed to tell her at all.

alex caffariniSchaumburg, Ill.

Want solutions to a financial dilemma in your life? Email your question tosocial@moneymail.com. To join our reader panel, go to moneymatterspanel.com.

T H E E X P E R T S A Y S

While this CFP doesn’t think you shouldwear a “Scarlet B” on the first date,a bankruptcy warrants early disclosure.Bankruptcy is an FTD (financiallytransmittable disease) that can affectyour partner’s finances, since you maynot be able to borrow and would thenrely on your beloved’s financial recordsto transact. Be open and transparent.

austin frye CEO and CFP, Frye Financial Center

Join the conversation: twitter.com/money • facebook.com/moneymagazine • pinterest.com/moneymagazine

“Building relationships. Nomatter what career you’re in,it’s ultimately about people.”—juana reed

“Persistence. Everything you do is a trialby fire, and you cannot be afraid to getburned once in a while.” —martin ruiz

“Luck—where experience andknowledge come together.”—michael schneider

“Believe in yourself.” —zebaan farooqui

“The ability to accept, deal with, and adapt tochanges in the workplace.”—marc hardekopf

“Data skills, writing skills,and conceptual thinking.”—roxanne brendel

“Become good friends with your boss.”—t. thomas vesper

WHAT’S THE ONESKILL YOU NEED TOBOOST YOUR CAREER?

“I declared bankruptcy a fewyears ago. How long after datingsomeone new should I tell her?”

READERS TO THE RESCUE

SEE THE

21 MOST

VALUABLE

CAREER SKILLS

(PAGE 42)

20 m o n e y. c o m J U N E 2 0 1 6

THE STATSF I R S T

Next month’s question: How much do eco-friendly choicescost you each month? To cast your vote, go to money.com.

NOTE: Money.com poll survey of 2,827 readers, conducted in March 2016. SOURCES: Splendid Insights Global Wedding Survey; Alan Fields; AmericanExpress Spending and Saving Tracker; Debi Lilly, A Perfect Event Weddings; The Knot; CostofWedding.com; Priceonomics; BrideBox.com

THESE FREE APPSCAN HELP YOUGET ORGANIZED

The KnotWedding Planning CompleteWeddingHappy

The WeddingCost Planner

Weddingoutfit cost

$236

Bacheloretteparty and

shower

$501

Travel andlodging

$317

PITY THE POORBRIDESMAIDS

Weddinggift

$125

TOTAL$1,179

WHO FOOTSTHE BILL?

12%Groom’s parents

2%Others

43%Bride and

groom

43%Bride’sparents THE GENDER GAP: BRIDE AND GROOM EDITION

AVERAGECOST OF AWEDDINGPLANNER:

$3,500

HOLY MATRIMONY,BATMAN! THE COSTS FOROUT-OF-TOWN GUESTS

POLL: How much do you thinkshould be spent on a wedding?

MONEY READERS WEIGH IN

$225Airfare

$170Hotel

$116Dining out

$95Dressing up

.Wedding

dressGroom’stuxedo

SSSH. DON’T MENTIONTHE WORD “WEDDING”

30%The typical venuemarkup when theevent is a wedding

$780:AVERAGECOST TODRAFT APRENUP

Close family member

Close friend

Friend

Co-worker

$180

$80

$65

$120

GIFT GUIDE: AVERAGEAMOUNT SPENT ON A…

SATURDAY NIGHTIS PRIME TIME

JUNE 2016MON TUE WED THU FRI SAT

SUN

1 2 3 46 7 8 9 10 1113 14 15 16 1720 21 22 23 24 2527 28 29 30 31

512

1926 18

25%LESS THAN $5,000

12%MORE THAN $25,000

29%$10,000–$25,000

34%$5,000–$9,999

SUNDAYWEDDINGSCOST 10%

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TECHF I R S T

22 m o n e y . c o m

You know what Dad reallyappreciates? When youbuy him something cooland score a deal. Theselesser-known gadgets holdtheir own against higher-profile, and higher-cost,options. —DOUG AAMOTH

FATHER’S DAY

Buy This,Not That

TabletDell’s gorgeous, powerful Venue Android tablet ($199, below) costs half as

much as the comparable iPad Mini 4 ($399, right), yet it sports a slightly

larger and higher-resolution screen. It also features expandable storage, an

impressive-for-a-tablet processor, and a 3D camera. Apple’s advantage?

Better apps and an optional cellular data chip.

For more Father’s Day techideas, go to money.com/tech.

HeadphonesSony’s MDR-7506 over-the-ear headphones ($80, above) put up a good fight

against the second iteration of the entry-level Beats Solo2 ($140, right). The Sony

phones produce great, clean sound with a wider dynamic range. They’re also

sturdily built and offer insanely comfortable, pillow-like earpieces. Where Beats

can’t be beat: style and a removable cord with built-in playback controls.

SAVINGS

50%

SAVINGS

66%

SAVINGS

43%

ActivityTrackerLooking to chart your train-

ing for less? Misfit’s clip-on

Link ($20, above) offers

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if you want a snazzy

LCD screen or an on-

line portal to track

your weight, hit

the Fitbit.

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Progressive Casualty Ins. Co. & affi liates. Business insurance may be placed through Progressive Specialty Insurance Agency, Inc. with select insurers, which are not affi liated with Progressive, are solely responsible for servicing and claims, and pay the agency commission for policies sold. Prices, coverages, privacy policies and commission rates vary among these insurers.

J U N E 2 0 1 6 m o n e y . c o m 25

Score a BigRetail Deal

YOU MIGHT BE SURPRISED BY HOW EASY IT ISTO GAME THE SYSTEM—AND SAVE ANYTIME

YOU SHOP. by Lisa Lee Freeman

SEEN ANY GREAT DISCOUNTS LATELY? Of course youhave. In our digital world, deals are like dande-lions in springtime—they pop up everywhere.The good news is that there are also some greattools to help you weed out the junk. The best newsavings apps and online coupon finders will evenlocate the deals you want, redeem them for you,and send you a check. But be warned: Retailerincentives are also marketing tools, designed toget you to spend on stuff you don’t really need.These tips will help you take advantage of thedeals without being taken advantage of yourself.

Photo illustration by dav i d s c h w e n

26 m o n e y . c o m J U N E 2 0 1 6

Plan SMART SHOPPING | ASK THE EXPERT | COLLEGE | HOME

BECOME A DISCOUNT MAGNET Tool: Coupon SherpaWhat’s the deal: Using your

phone’s GPS and other technolo-gies, some coupon apps can pin-point where you’re shopping, thenshoot you the store’s discounts auto-matically. You can download an appfor individual outlets or cast a widersavings net with an app like CouponSherpa. It’s connected to hundredsof retailers, and some shoppersmight find the home screen, withits “stores” tab, more convenientthan competitor RetailMeNot’s.Some recent Coupon Sherpa finds:40% off one item at Lands’ End and$10 off $30 in packing and shippingsupplies at Staples.

Keep in mind: Not every deal isas juicy as it seems. Focus on theprice, not the markdown. “Whenyou see 80% off, your emotions takeover,” says Alok Gupta, a professorof information management at theUniversity of Minnesota. Not sureif the discount is worthwhile? Appslike CamelCamelCamel and PriceZombie will show you an item’sprice history, and ShopSavvy willhelp you compare prices so you cansee if today’s sale is really all that.

SAVE ON AUTOPILOT Tool: Piggy What’s the deal: If you don’t

have the time or the patience tobother with a coupon, try a browseradd-on such as Piggy (joinpiggy.com). When you’re ready to clickthe checkout button on a retailer’swebsite, the app will automaticallyhunt for available coupons andapply them against your bill. Evenbetter, Piggy features one of thebest cash-back programs: 3% onyour Macys.com purchases, 7% onOverstock.com, 15% on a Groupon

buy. Once you’ve racked up $50in savings, Piggy will send you thecash-back bonus (mailed quarterly).

Keep in mind: Retailer appscan save you money, but they alsoentice you to spend it. “They areoptimized to help you buy stuffmore easily,” says Lakshman Krish-namurthi, a marketing professor atNorthwestern University. One solu-tion: Use the Wunderlist app or thebuilt-in notes app on your phone tobuild a shopping list. “You’re lesslikely to browse if you go in know-ing exactly what you’re looking for,”says Matt Schulz, senior industryanalyst at CreditCards.com.

PROFIT FROM PRICE DROPS Tool: Paribus What’s the deal: Online retailers

such as Amazon and BestBuy.com

will give you a refund if the pricedrops after you buy an item, butyou have to file for the rebate, andyou’ve got only a narrow window(usually within a week or so) todo so. Paribus automates theprocess. It scans all your onlinereceipts, remembers to check forfuture price drops, then appliesfor eligible rebates automatically.Paribus credits the money to yourcard, minus a 25% commission.

Keep in mind: For Paribus towork, you have to give it accessto your email. The company saysit encrypts users’ passwords andwill only track emails from re-tailers, but allowing this kind ofaccess could be a privacy concernfor many people. One possiblesolution: Set up a separate emailaccount for your online shopping.

REQUEST A DISCOUNT Tool: Your favorite retailers’

social media feeds What’s the deal: You know

the old saying “It never hurts toask”? That can work online too.“It’s amazing how many storeshave people who will shoot you acoupon if you ask on Facebook orTwitter,” says Kyle James, founderof Rather-Be-Shopping.com. “Oryou can use live chat to ask for acoupon or even negotiate a deal.”Requesting a discount works bestif you find a great bargain else-where, then see if the competingretailer will beat the cost. Butsometimes all you have to do isinquire about “wiggle room”on the price. James says he didthat when he was shopping onKohls.com for a $150 Keurig 2.0K250 coffeemaker. His deal: $120,a 20% savings. Bet that morningcup of joe tastes even sweeter.

NOTE: Cash back paid quarterly after your Piggy rebateaccount totals $50 or more. SOURCE: Piggy

Putting Extra Cashin Your PocketFrustrated that you can neverget a discount on your favoriteline of makeup or Apple product?Use Piggy’s cash-back feature.

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28 m o n e y . c o m J U N E 2 0 1 6

Plan SMART SHOPPING | ASK THE EXPERT | COLLEGE | HOME

Savings held in nonretirement accounts could sharplyreduce financial aid awards, especially at public colleges.

YOUR LIKELY AID (WITH $350,000 IN SAVINGS)

NOTE: Assumes $100,000 annual household income, no other savings.SOURCES: UVA’s and USC’s net price calculators

You don’t have toreport your re-tirement savings

as assets on the FreeApplication for FederalStudent Aid, as longas the money is in aqualified account. Suchaccounts include IRAs,401(k)s, and 403(b)s; youalso get a pass on thevalue of a pension plan.

You must disclose anyfunds that are in a bro-kerage account, however,and these could reducethe amount of need-based aid your childgets, says financial aid

expert Mark Kantrowitz.

You can’t leave moneyoff the application sim-ply because you intend touse it during retirement.

If you have substantialsavings outside a retire-ment account, there aretwo basic ways to shelterit from the FAFSA,Kantrowitz says: Use themoney to pay down adebt, like a mortgage oran auto loan, or move itinto an annuity or otherretirement vehicle.

You can use thecompeting bid asleverage, but go

about it intelligently.Candidates should “dothe best they can to dealdirectly with the hiringmanager, the personwho’s actually managingthe budget for their com-pensation,” suggestsDave Carvajal, CEO of tech

industry recruitment firm

Dave Partners.

Tell the hiring man-ager you have anotheroption on the table, and

be specific about whatthe competition hasoffered. Keep it friendly:“Make it clear that thisis the preferred opportu-nity,” Carvajal says, butat the same time politelystress that compensa-tion is a priority.

If you hit the wall onsalary, try negotiating asigning bonus. Compa-nies may be more recep-tive to a one-time costthan to an ongoing ex-pense that is higher thanthey had planned.

You may contrib-ute to what’scalled a spousal

Roth IRA based on yourwife’s income. The strat-egy lets you invest after-tax dollars now to avoidpaying taxes later ongains or withdrawals. “Irecommend this to manyof my clients,” says Mike

Piershale, a financial con-

sultant in Crystal Lake, Ill.

As long as your wifehas at least $13,000 inearned income in 2016and you’re both 50 orolder, you can contributeup to $6,500 to a Roth inher name and $6,500 inyours, says Piershale.Your combined contribu-tions can’t exceed hertaxable compensation.

One other caveat:As a couple filing jointly,you start losing yourability to contribute onceyou earn $184,000 inmodified adjusted grossincome; it disappears at$194,000. So if your wifeis a high earner, youcould be out of luck.

PA Y I N G F O R C O L L E G E

We have $350,000 ininvestments for retire-ment. Must we disclosethem on a FAFSA? —claudiaQ

A

A

R E T I R E M E N T

I’m retired,but my wife has

income; we file taxesjointly. May I putmoney in a Roth? —jim

Q

N E G O T I AT I N G S A L A R Y

I have two job offers, but myfirst choice pays less. How do I

get that one to match the other offer?Q

By Kaitlin Mulhere,Martha C. White, and Sarah Max

Read more answers from Ask the Expert and submit yourown question about personal finance at money.com/expert.

A Assets in brokerage account Assets in retirement account

University of Virginia(public)

University of SouthernCalifornia (private)

$6,972$38,600

$0$10,038

J U N E 2 0 1 6 m o n e y . c o m 29

PlanSMART SHOPPING | ASK THE EXPERT | COLLEGE | HOME

AS IF COLLEGE ISN’T EXPENSIVEenough these days, some studentsare now paying thousands of dol-lars, over and above their normaltuition, for specialized courses ineverything from business funda-mentals to computer programming.

Often referred to as “bootcamps,” these à la carte programspromise to provide the skillsthat employers want in their newhires and that may not be part ofthe regular college curriculum.“Colleges have always beenabout preparing students for thefifth job, not the first job,” saysRyan Craig, author of CollegeDisrupted: The Great Unbundlingof Higher Education.

Some boot camps are runby colleges themselves, others byindependent companies. Somecater to current students, others

to recent grads. While they vary inlength and cost, most courses willset you back at least $1,000 a weekfor tuition alone.

Coding boot camps are thebiggest category, enrolling morethan 16,000 students last year. Butat least a dozen major colleges alsooffer monthlong programs in en-trepreneurship, finance, and man-agement, tailored to nonbusinessmajors. Independent companies,such as Fullbridge and Koru, runboot camps for “soft” skills liketeamwork and problem solving.

So, are they worth it? AnthonyCarnevale, director of the George-town Center on Education and theWorkforce, says they can be, buthe urges students (and parents)to vet them carefully. Make sure,for example, that any privately runprogram is licensed by your state,

which gives you some protection ifit fails to deliver on its promises.Bear in mind that few boot camps,even those sponsored by colleges,currently offer course credit. Norare they eligible for federal grantsand loans, unlike some professionalcertificate programs that collegesoffer. So before you enlist, find out:

Is it affordable? Even if thetuition is manageable, don’t forgetextra living expenses, suggestsNick Ducoff, vice president fornew ventures at NortheasternUniversity in Boston. A full-time,three- to six-month program couldmean added housing and foodcosts of $5,000 to $10,000, as wellas cutting into the hours you couldearn money by working.

Does it offer the right skills?Some coding courses, for example,teach the programming languagePython, others JavaScript. “Youwant to make sure you go to aboot camp that’s teaching thelanguages that are in high demandin your community,” notes RickO’Donnell, founder of Skills Fund,a lender for boot-camp programs.So check job listings to see whatspecific skills local employers arelooking for.

How are alumni doing? Forindependent programs, consultstudent reviews at CourseReport.com. If it’s a college-sponsoredprogram, request the names ofother students or recent gradswho have been through it. Askthem if the program helped themland a job and whether the skillsthey learned turned out to be theones they really needed.

Are ‘Boot Camps’Worth the Bucks?THESE EXTRA-COST COLLEGE PROGRAMS PROMISE TOSHAPE UP STUDENTS’ JOB SKILLS. by Kaitlin Mulhere

For more about the different typesof boot camps and how to pay forthem, visit money.com/colleges.

Illustration by jac o b t h o m a s

30 m o n e y . c o m J U N E 2 0 1 6

YOUR HOME IS PROBABLY the biggestchunk of your monthly budget—soa miscalculation here can have alarger impact on your overall cashflow than, say, your grocery tab.The classic mistake: Many first-time buyers plan for their newmortgage but don’t add in the otherhomeownership expenses that canblow up a financial game plan. Ifyou’re eyeing a new place, be sureto manage all of these costs:

Utilities: When my husband andI bought our first apartment lastyear, we knew the extra spacewould boost our energy bills, butwe failed to predict just how much.Oops. Our cable costs would haverisen too if we had added boxes tomore rooms. (We ultimately didn’t.)How to save: Get a better forecastby having your agent ask the sellersfor recent utility statements. Then

cut costs by using a power strip toturn off “vampire” speakers, TVs,and other gadgets and keep themfrom sucking power while yousleep. On the entertainment front,check selection and prices forstreaming services like Netflix orHBO Go. You may be able to saveand still watch the shows you want.

Transit: Moving farther fromwork to get a cheaper place? Re-member to add up new transporta-tion costs: a pricier rail trip, per-haps, or a second car. The averageworker spends $2,600 annually oncommuting, a Citi-commissionedsurvey found last year.How to save: Employers may letyou set aside up to $255 a monthin a pretax account to cover publictransit and/or parking. The savingscan top $100 a month for someonein the 28% tax bracket.

Maintenance: Longtime rentersmay fail to plan for paint touch-ups,carpet cleaning, and other repairs.

But upkeep runs up to $3,500annually on average, says onlinereal estate site Zillow.How to save: Small periodictune-ups (checking HVAC filters,for instance) can preserve thelives of costly major appliances.Meanwhile, put aside cash forbigger projects so that you don’tneed to dip into emergencysavings or, worse, rack up creditcard debt. Replacing a washeror dryer, for instance, could cost$1,000 or more.

Furniture: Before we evenclosed on our new place, I beganenvisioning all of the beautiful newfurniture and lighting I was goingto put in. Reality check: Just be-cause you’re moving doesn’t meanyou need all new things.How to save: Bring as much fromyour old home as possible, givingyourself six months to settle in. Atthat point, you can determine whatnew items you actually need.

How to Beat New-Home BillsFIRST-TIME BUYERS DON’T ALWAYS FACTOR IN ALL THE EXTRAS THAT CANSTRAIN A BUDGET. MAKE SURE YOU KEEP AN EYE ON THESE OWNERSHIP COSTS.

Columnist Alexa von Tobel is thefounder of LearnVest. Catch hercolumns and videos at Money.com.

Plan SMART SHOPPING | ASK THE EXPERT | COLLEGE | HOME

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J U N E 2 0 1 6 m o n e y . c o m 33

ed

WHEN YOU’RE SAVING and investing for retirement,you can make a lot of progress by staying oncruise control. Sign up for your 401(k), set a highsavings rate, and continue stashing away moneythroughout your career. Occasionally, though,you’ll reach pivotal ages when your retirementwill require hands-on attention—you’ll have tomake a decision about your savings or healthcare, for example, that will affect your financialsecurity or quality of life for years to come.

At these times your window of opportunitymay last as little as a few months. So mark these

The RightggTimes toActAA

TO SECURE YOUR RETIREMENT, MAKE THEPROPER MOVES ATAA A FEW KEY MOMENTS.

by Penelope Wang

Photo illustration by dav i d s c h w e n

34 m o n e y . c o m J U N E 2 0 1 6

NOTES: Secure retirement income, including SocialSecurity, is 80% of final salary. Salary is $40,000 at age25, rising 3% per year. Savings rate is personal savingsplus employer contribution. Annual investment return is6%. Life span is 90 years. SOURCES: CalcXML.com,MONEY calculations

The Power of 25Starting in your mid-twenties tosave for retirement means youwon’t have to set aside a hugeportion of your earnings.

SAVINGS RATES FORA SECURE RETIREMENT

25 35 45

AGE YOU START SAVING

47%

23%24%

12%14%7%

Retire at age 62 Retire at age 67

five ages (or the ones that stillapply to you) on your calendar.

25 COMMIT TO SAVINGWhy this age is critical: Whenyou’re just out of college, savingcan be hard. But halfway throughyour twenties—with a job or twobehind you, and maybe gradschool too—you’re psychologicallyand financially ready to set moneyaside. Along with the monetarypayoff of starting at 25 (see thechart below), you’ll develop a habitthat will serve you well for life,says Denis Horrigan, a financialplanner in Farmington, Conn.

Key move: Aim to put away atleast 10% of your pay in your work-place plan, if you have one, or a RothIRA. Feeling pinched? Use a freeapp to divert small amounts intosavings. Acorns.com rounds up yourdebit or credit card transactions tothe nearest dollar, funneling thatchange into an investment account.

45 TURN UP THE VOLUMEWhy this age is critical: You’renear your peak earning year—for men, 48, and for women, 39,PayScale found in 2014—so you canpower-save. And you most likelyhave fewer working years ahead ofyou than behind you, so retirementhas to be a priority, says Brooklynplanner Tom Frederickson.

Key move: Use online tools, suchas T. Rowe Price’s RetirementIncome Calculator (troweprice.com/ric), to estimate how much retire-ment income your portfolio willgenerate. While forecasts aren’t per-fect (see page 17), they can inspire.A 2014 study out of Stanford andthe University of Minnesota foundthat seeing such estimates helpedspur workers to boost their savings.

60 SUSS OUT SOCIAL SECURITYWhy this age is critical: Theearliest you can receive SocialSecurity, generally, is at 62, butclaiming strategies, especially formarried couples, can be compli-cated. “These are big decisions,and most people need a couple ofyears to figure out what’s right forthem,” says Jim MacKay, a finan-cial planner in Springfield, Mo.

Key moves: Although some 40%of retirees claim at 62, look forways to hold off; monthly benefitsgrow 7% to 8% a year until you’re70. While you wait, build up one totwo years of cash to cover emergen-cies and daily expenses. To lowerthe risk of a bear market crushingyour nest egg, slowly shift yourinvestments so you end up with an

appropriately conservative portfo-lio by your expected retirementdate. Most advisers suggest arriv-ing at a 50%/50% stock/bond mix.

65 ENROLL IN MEDICAREWhy this age is critical: Unlessyou or your spouse is still workingand you’re on an employer plan—coverage via COBRA doesn’tcount—you have three monthsafter the month you turn 65 to signup for Medicare (at medicare.gov).Miss the deadline and you’ll payhigher premiums—for example,10% more for each year you delayMedicare Part B (for doctors).Key move: Shop around for aPart D plan for drug coverage anda Medigap plan to help pay extracosts, such as co-payments anddeductibles. Compare choices atmedicare.gov/find-a-plan. And goto shiptacenter.org to connect withlocal experts and trained volun-teers providing free guidance onall your Medicare options.

70½ TACKLE YOUR TAXESWhy this age is critical: Startingthe year you turn 70½, the clockbegins ticking on the requiredminimum distributions you musttake from your 401(k) and IRAs.(You can defer your first RMD untilApril 1 of the next year, but you’llhave to take a second one beforeyear-end.) Miss an RMD and you’llpay a hefty 50% penalty on themoney you should have withdrawn.

Key move: Get charitable. In2015 Congress made permanenta rule letting direct donationsfrom your IRA—up to $100,000 ayear—count toward your RMD(and perhaps lower your tax bill).So if you don’t need the money,you can find it a good home.

Retire IMPORTANT AGES | INVESTMENT ADVICE

J U N E 2 0 1 6 m o n e y . c o m 35

RetireIMPORTANT AGES | INVESTMENT ADVICE

NOTE: Percentages are based on median figures forfamilies in the second-highest income decile (medianpretax income of $122,700). SOURCE: Federal ReserveSurvey of Consumer Finances 2013

Why You NeedProtectionThe growing importance of IRAsand similar accounts highlightsthe need for good advice.

GROWTH OF RETIREMENT SAVINGS

YOU CAN REST more easily sincethe Department of Labor issued inApril a landmark rule designed toimprove the advice you get aboutretirement investments.

But you could feel befuddledtoo, given the complexities sur-rounding the 1,023-page documentknown as the fiduciary rule. Eventhough it won’t be in full force until2018—and may face legislative andlegal obstacles before then—therule is already making an impact.Here’s what you need to knowabout the financial advice you getnow—and what will change.

THERE ARE DOUBLE STANDARDSThe fiduciary rule will obligate afinancial professional, when coun-seling you about retirement invest-ments, to give advice that’s in yourbest interest. Believe it or not,many advisers don’t have to do that(and under the new rule won’t haveto for your nonretirement assets).Instead, they work under the loosersuitability standard, which letsthem sell investments that, whileappropriate, may be costlier foryou—and more profitable for youradviser—than alternatives.

Not sure if your financial profes-sional is a fiduciary now? A regis-

tered investment adviser, or RIA—who typically charges an annual orhourly fee—is a fiduciary. Regis-tered representatives of broker-ages follow the suitability standard.Confusingly, many advisers shiftbetween the standards, explainsUniversity of Mississippi securi-ties law professor Mercer Bullard.So ask your adviser whether andwhen he or she is a fiduciary.

IT’S ALL ABOUT YOUR IRAThe fiduciary rule could be crucialwhen you retire or leave a job.Financial advisers often suggestyou roll over money from your401(k) or other workplace planto an IRA. That can mean a bigpayday for them—perhaps tensof thousands of dollars in commis-sions. The new rule doesn’t outlawsuch payments, but supportersbelieve it will rein in sales pitchesby requiring an adviser to justifyin writing why a rollover is in yourbest interest and what servicesyou’re getting in return for his orher compensation. “Make sure it’sworth it to you,” says retirementlaw attorney Marcia Wagner.

YOUR ADVISER MIGHT CHANGESome financial trade groups haveargued that less wealthy custom-ers will be hurt by the fiduciaryrule, since firms that have servedthem under the suitability stan-dard will drop them because of thelower profits and higher adminis-trative expenses associated witha fiduciary obligation.

Should that happen to you, you’llhave choices. In response to thenew rule, the brokerage firm LPL,for example, is cutting prices andlowering the minimum on its fidu-ciary-compliant Optimum MarketPortfolios to $10,000 from $15,000.

You can also get fiduciary advicethrough services existing well be-fore the new rule. Vanguard’s Per-sonal Advisor Services, if you haveat least $50,000, connects you withfinancial pros who work by phoneor email. And companies known asrobo-advisers, including Wealth-front and Betterment, can create acustomized portfolio for an initialinvestment of under $1,000.

Raising the Bar onnanc al Adv ce

A NEW RULE SHOULD IMPROVE THE QUALITY OFYOUR INVESTMENT GUIDANCE. by Ian Salisbury

1989 ’95 2001 ’07 ’13

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Rx forDeflatingBiotechs

THOUGH THIS BURSTING BUBBLE SHARESDNA WITH THE DOTCOM CRASH, THERE

ARE KEY DIFFERENCES. by Carla Fried

FOR MUCH OF THIS bull market, biotechnologystocks were like anabolic steroids for yourportfolio. They soared nearly 600% from March2009 to last summer—almost three times thegains for the broad market. More recently,though, this risky but fast-growing segment ofthe health care sector has been afflicted with anumber of ailments, sinking about 30% since July.

A sharp decline in a sexy part of the marketthat had skyrocketed to stratospheric levels.Sound familiar? Biotechs share several geneticmarkers with dotcom stocks from more than 15

J U N E 2 0 1 6 m o n e y . c o m 37Photo illustration by dav i d s c h w e n

38 m o n e y . c o m J U N E 2 0 1 6

Invest RX FOR BIOTECH | FUND X-RAY | THE INTELLIGENT INVESTOR

NOTE: Price/earnings ratios are based on projected profits.SOURCES: YCharts.com, S&P Global, MONEY research

A Similar Slide?The biotech selloff sure looks alot like the dotcom bust in 2000.

LOSS SIX MONTHS INTO THE SLIDE

VALUATIONS

AmerisourceBergen (ABC) to medicalsuppliers such as Becton Dickinson

(BDX) that are positioned to benefitfrom growing health spending.Alternatively, you can go withHealth Care Select Sector SPDR (XLV),a low-cost ETF (expense ratio:0.14%) that owns all three stocks.

SHOP IN THE DISCOUNT BINSeveral years after the dotcomcrash, tech went from the realmof speculators to bargain hunters.Biotechs—at least shares of thebigger, established companies thatgenerate real products andprofits—have already reached thatpoint. “Large-cap biotechs are atthe best valuation we’ve seen”since tracking the group in 1985,says Greg Swenson at LeutholdWeeden Capital Management.

Take Gilead Sciences (GILD). Thecompany, which earned more than$18 billion last year, is suddenlygetting a cool reception fromgung ho growth investors. Theyworry that the explosive growth inGilead’s blockbuster HIV andhepatitis C drugs—which have beenon the market for a few years—maybe slowing. Gilead is also enmeshedin the recent public ire over sharplyrising drug prices that has been thefocus of congressional hearings.

Yet even if growth slows to atrickle, the shares trade at a mereeight times Gilead’s expected 2016earnings. And the stock paysa decent dividend yield of 1.8%.

Gilead and fellow giants Biogen

(BIIB) and Amgen (AMGN) are in theMarket Vectors Morningstar Wide

Moat ETF (MOAT). The fund owns onlyfirms with competitive advantagestrading at the widest discountsto their true value, according toMorningstar analysts.

years ago. Many biotech compa-nies, which use biological materialsto create drugs (pharmaceuticalfirms, by contrast, use plant andchemical compounds), have yetto turn a profit. Their shares haverisen on the promise of treatmentsin development that could beblockbusters one day—or busts.

Moreover, this group was bid upto dizzying heights. Shares of smallbiotech companies were trading ata price/earnings ratio of over 300last summer before the collapse.Even now the S&P 600 smallbiotech stock index sports a P/Eof 32, based on projected profits.

Still, there are differences. Inthe late 1990s there were no“cheap” Internet stocks to be had.On the other hand “there are a lotof very profitable biotech compa-nies and other health care seg-ments that are trading at reason-able and sometimes low valuations,”says Jeffrey Loo, director of healthcare equity research at S&P GlobalMarket Intelligence.

The key to investing in thewake of this burst bubble, then,is knowing where those values are.

BROADEN YOUR HORIZONSIn the dotcom era, euphoria forunproven startups seeped intonearly every nook and cranny ofthe whole tech sector. Valuationsgot so frothy that some tech giantssuch as Cisco Systems still aren’tback to their inflated highs.

The biotech craze, by contrast,never infected the broader healthcare sector that has only modestlyoutpaced the S&P 500 sinceMarch 2009. Blue-chip healthstocks trade at 16.1 times project-ed profits. Not only is that lowerthan the 17.9 P/E for the S&P 500,

it’s below the historical average(see chart below).

Health care is attractive foranother reason. In the long run,the aging population continues tobe a demographic tailwind, saysBrian Lazorishak, senior portfoliomanager at Stack FinancialManagement. A bonus given thisbull market’s advanced age: Whenbear markets strike, big, profitablehealth care stocks have tended tofall half as much as the market.

Lazorishak recommends adiversified approach to health care,ranging from defensive drugmak-ers such as Johnson & Johnson (JNJ)to pharmaceutical distributors like

But all of tech was frothy then—notso with health care stocks today.

Biotech stocksnow

Internet stocksin 2000

Post-crash P/E ratio Historical average P/E

Health care stocks

Tech stocks

48

-39% -43%

1816

18

J U N E 2 0 1 6 m o n e y . c o m 39

InvestRX FOR BIOTECH | FUND X-RAY | THE INTELLIGENT INVESTOR

SOURCE: Morningstar

X-Ray: Fidelity Low-Priced StockTHIS HUGE SMALL-STOCK FUND DEFIES CONVENTION—AND THE ODDS. by Ian Salisbury

Fidelity Low-Priced Stock gets its name from a peculiar requirement: to buy only stocks trading at $35 a shareor less. That’s an old-fashioned way to spot smaller, overlooked equities, yet you can’t argue with the results.Legendary stock picker Joel Tillinghast has posted gains of 7.3% a year over the past decade, beating the marketand his peers. While smaller-stock funds tend to shutter if assets swell—to let the managers focus on just a fewof their “best ideas”—Tillinghast holds 867 stocks in a $40 billion portfolio. Quirky for sure, but is it right for you?

No Average JoelManager Joel Tillinghast hasconsistently posted outsize gains.

Tillinghast is a value investor whokeeps things simple. He favors firmswith business models he can easilyunderstand and strong competitiveadvantages. This strategy helped himbecome the literal poster child forstock picking—Fidelity featured himin ads promoting active management.

Yet Tillinghast achieved some ofhis success by borrowing a page frompassive management. With nearly900 stocks, his fund owns a widerarray of shares than many indexfunds. Low-Priced also charges just0.79% a year, only a hair above theaverage 0.72% fees levied by small-and midcap index funds. And he alsominimizes trading costs throughpatience. With a turnover rate of 10%,he hangs on to stocks longer than theRussell 2000 small-company index.

ANNUAL GAIN SINCE DEC. 1989 INCEPTION

Hard to PigeonholeThe fund focuses on smaller stocksbut actually owns shares of all sizes.

For its first 15 years, Low-PricedStock specialized in small-companyshares. But as the fund’s assetsgrew, it became harder for a portfoliothis big to just seed tiny businesses.Today, Low-Priced Stock is classifiedas a “midcap” fund, but even thatbelies its unconventional approach.

While there’s still a “tilt” to smallernames, the fund also owns somemegasize stocks like Microsoft andOracle.“It helps diversify the risk,”Tillinghast says. Plus about 45% ofhis holdings are in international equi-ties, which have dragged performancea bit over the past year. This idiosyn-cratic approach means Low-PricedStock can’t neatly replace a small- orlarge-stock fund in your core portfolio.“It’s a niche play,” says Mount Sinai,N.Y., planner Peter Creedon.

The Clock Is TickingHow much longer can investorsexpect Tillinghast’s run to last?

While Tillinghast’s distinctivestrategy has helped his fund generatestellar returns, the downside is thatLow-Priced Stock relies heavily on hisskills. “He’s a celebrity manager,”says Woburn, Mass., financial plannerKashif Ahmed. “If something wereto happen to him suddenly, his fansmay rush out the door, leaving real,long-term investors vulnerable.”

Tillinghast, who turns 58 in June,says he has no plans to go anywhere.But he’s been at the helm for 26years, outlasting 99% of his peers.A few years ago he ceded a sliver—about 6%—of the portfolio to a groupof six research analysts who can takecharge when he’s away. The questionis, If handed the remaining $37.6 bil-lion, can “Team Joel” replicateTillinghast’s winning record?

FidelityLow-Priced

Stock

AverageU.S. stock

fund

Averagesmall-stock

fund

13.7% 10.0% 9.2%

LOW-PRICED STOCK’S PORTFOLIO

12%Megastocks

25%Large

34%Midsize

29%Small

MANAGER TENURE

FidelityLow-Priced

Average fundmanager

26.5YEARS

5.8YEARS

40 m o n e y . c o m J U N E 2 0 1 6

Invest RX FOR BIOTECH | FUND X-RAY | THE INTELLIGENT INVESTOR

IN THE LONG RUN the stock marketmay well be a wise predictor offuture corporate earnings. In theshort term it has all the wisdomof a herd of drunken buffalo.

A simple example: Stocksdropped from the S&P 500 oftenfall sharply, while those added rise.Membership in an index has noth-ing to do with a company’s outlook,but when a stock falls out of theS&P, hundreds of funds automati-cally sell—and that gives a savvyinvestor a chance to buy cheaply.

Spin-offs are another example.

Investors often shun jettisonedbusinesses, assuming there’s areason for being kicked to the curb.Yet studies show that spun-offfirms often outperform, as they’reoverlooked and underappreciated.

A NEW TWIST ON VALUEThis sounds like the essence ofbargain hunting, but traditionalvalue funds look for long-standingmisjudgments. There are nowsome funds that take advantageof this type of short-term silliness,and they even have a name: “eventdriven” funds. Guggenheim Spin-Off

ETF (CSD), for instance, owns sharesof mostly small and midsize compa-nies that were unloaded. Over the

past five years the fund gained11.3% annually, outpacing peersby nearly two points a year.

EMERGING OPPORTUNITIESSome funds don’t just look for badsituations; they seek out corporatemoves that have historically ledto opportunities, such as mergers.Investors have long profited bybetting on the modest gap betweenan acquisition target’s current priceand the deal price. When investingin announced mergers, the returnhas typically been about 5% to 7%,says Mark McKenna, manager ofBlackRock Event Driven Equity (BALPX).But he thinks that will rise to 10%as the pace of mergers increases.

Arvind Navaratnam, managerof Fidelity Event Driven Opportuni-

ties (FARNX), also looks at mergers,among other incidents. He scoopedup shares of Journal Media Groupwhen it announced plans to mergeits broadcast assets with E.W.Scripps. (The companies also spunoff their print divisions into a newcompany.) The stock popped morethan 40% when Gannett announcedthat it was buying Journal Medialast October.

As with all forms of value invest-ing, there are risks. Navaratnamalso held a big stake in ValeantPharmaceuticals, a serial acquirerwhose shares have sunk more than80% in the past year. Despite that,his fund has beaten 80% of its peersin the past 12 months.

There’s one other benefit be-yond performance. Because theylook for quirky buy and sell sig-nals, event funds tend to be poorlycorrelated with the broad market,making them good diversifiers.

Seeing the Value ina Shattering EventTHE MARKET OFTEN OVERREACTS NEGATIVELY TO ONE-TIME OCCURRENCES. HERE’S HOW TO PROFIT FROM THAT.

by JohnWaggoner

Illustration by tay l o r ca l l e ry

Columnist John Waggoner is the author ofthree books on Wall Street and investing.

UNAV082910T. Rowe Price Investment Services, Inc., Distributor.

The principal value of the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund. If an investor plans to retire signifi cantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date. The funds’ allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long-term postretirement withdrawal horizon. The funds are not designed for a lump-sum redemption at the target date and do not guarantee a particular level of income. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons.

*20 of our 36 Retirement Funds had a 10-year track record as of 3/31/16 (includes all share classes). All 20 of these 20 funds (100%) beat their Lipper average for the 10-year period. 36 of 36, 36 of 36, and 36 of 36 of the Retirement Funds outperformed their Lipper average for the 1-, 3-, 5-year periods ended 3/31/16, respectively. Calculations are based on cumulative total return. Not all funds outperformed for all periods. (Source for data: Lipper Inc.)**Keep in mind that an IRA may be subject to an annual fee, and a fee may be assessed if the IRA is closed. †Consider all available options, including remaining with your current retirement plan, rolling over into a new employer’s plan or IRA, or cashing out the account value.

HAVE YOU BEEN SETTLING FOR AVERAGE?

We have not. 100% of T. Rowe Price Retirement Funds have above-average returns for the 10-year period and below-average costs.

• 100% of our Retirement Funds beat their 10-year Lipper average as of 3/31/16*

• 100% of our Retirement Funds have expenses below their Lipper average as of 3/31/16**

Results will vary for other periods. Past performance cannot guarantee future results.Request a prospectus or summary prospectus; each includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing.

Call our Retirement Specialists to roll over your old 401(k).†

Rollover with Confi denceSM troweprice.com/rollover | 800-541-5862

C O V E R STO R Y

42 m o n e y . c o m J U N E 2 0 1 6

THE

21 MostValuableCareerSkills

Whether you’re looking to land a hefty raiseor nab a big promotion, our exclusive new

study of the know-how that pays off the mostat work can help you reach your goal.

By CYBELE WEISSER, KERRI ANNE RENZULLI,and MEGAN LEONHARDT

J U N E 2 0 1 6 m o n e y . c o m 43

You’ve paid your dues. You work hard, in a field you love.You are, by most measures, successful in your career.Now you’re ready for the step—or, perhaps, leap—to abigger job, the next level, substantially higher pay.

In this complex, fast-changingjob market, just putting in thehours and being good at what youdo may not be enough. You need anedge. And the surest one thesedays is to possess the skills that aremost in demand in your field, thathelp your employer keep up withthe technological, economic, andsocial forces that are transformingso many industries. The key, ofcourse, is to know exactly whatthose skills are, how to get them,and what the payoff will be.

To provide that critical insight,MONEY and compensation datasite PayScale.com teamed up todevelop a unique new analysis ofthe skills that employers place thehighest value on now. Adding thisknow-how to your arsenal is essen-tial. “You can’t remain stagnant,”says Lydia Frank, PayScale’s edito-rial director. “You always want to

be learning something new; youalways want to be advancing.”

To identify the abilities thatbring the greatest rewards, MONEYand PayScale analyzed 54 millionemployee profiles, across 350 in-dustries, with 15,000 job titles—from entry-level workers to topexecs. We compared people withthe same title, age, location, andexperience, isolating the specificskills (from a universe of about2,300) correlated with higher pay,advancement, and career opportu-nity. The result: an authoritativelist of the skills with the best payoffin the workforce today.

Of course, knowing which skillsare in demand is just the first step.So in the pages that follow, you’llalso find great advice from careercoaches, academics, and recruiterson how to get the know-how youneed. The rest is up to you.

44 m o n e y . c o m J U N E 2 0 1 6

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What Employers Pay More For

M A K I N G S E N S E O F B I G D ATAAcross a variety of fields, workers earnmore when they can make sense of theexponentially more complex data nowavailable about the markets their em-ployers serve. Although companies havelong tracked information about custom-ers, sales, and suppliers, businesses to-day have access to a far richer vein ofinformation. Every time you click on awebsite, shop online, watch a video, or dopretty much anything else, you leave be-hind crumbs of information. “People nowcreate more data in an hour than theyused to in a month,” says Traci Fiatte, agroup president at Randstad, an interna-tional provider of HR services.

Thanks to massive improvements inthe software that collects, stores, andintegrates data, companies can use thisinformation to do things like target newcustomers, improve service, and offermore personalized products—as long asthey employ folks who understand how

to organize, analyze, and apply it.Enter the data maven. “Mainstream

American companies have come to real-ize that in order to become more effectivein the marketplace, they need to analyzedata,” says Matt Sigelman, the CEO ofBurning Glass Technologies, which ana-lyzes job listing information. “And we’reseeing those skills showing up at a pre-mium in a variety of industries, includingmarketing, logistics jobs, and operationsmanagement jobs, just to name a few.”

Top Data Skills / Avg. Pay Boost» SAS (Statistical Analysis System) +6.1%» Data Mining/Data Warehousing +5.1%» Data Modeling +5%

M A N AG I N G T H E B OT TO M L I N EIf you’re not a finance wonk, you might betempted to leave the numbers stuff to thebean counters upstairs. But no matterwhere you sit in your firm’s org chart,

you’ll get a boost by under-standing what keeps the com-pany in the black. “When weask our alums what they’d dodifferently in their career, themost common response is thatthey wish they’d taken morefinancial accounting classes,”says Thomas Lys, a professoremeritus at Northwestern Uni-versity’s Kellogg School ofManagement.

Understanding how day-to-day deals and decisions af-fect profitability becomeseven more important as youadvance. A separate analysisof the skills that set apart ex-ecutives from junior staff (seethe chart on page 46) puts

TOP SKILL FOR…

THE FINDINGS

CAREERS 2016 M O ST VA L U AB L E S K I L L S

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

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17

18

19

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21

J U N E 2 0 1 6 m o n e y . c o m 45

THE 21 MOST VALUABLE CAREER SKILLSThese high-demand skills give you the best shot at getting a higher salary than your peers, across multiple types of jobs.

RANK SKILL WHAT IT INVOLVES PAY PREMIUM

SAS (Statistical Analysis System)Understanding of this data analysis software commands thehighest salary premium on our list. 6.1%

Data Mining/Data WarehousingThese skills involve integrating large data sets and combingthrough them for patterns with bottom-line impact. 5.1%

Search Engine MarketingDigital marketing is hot. Being able to reach customers viasearch engine ads gives you an edge. 5.0%

Data ModelingThis database design skill is correlated with a juicy pay bumpacross several job types, from the sciences to finance. 5.0%

Contract NegotiationIt’s not just for lawyers: Negotiating chops also commandhigher pay in business, finance, and management jobs. 5.0%

Software DevelopmentFrom the sciences to engineering, people who can build andcustomize digital tools wind up earning more. 4.9%

Strategic Project ManagementThe value here stems from a tricky balancing act: high-levelthinking plus careful management of details. 4.4%

Strategic PlanningThis skill hits a trifecta: higher pay, a better shot at an executiveslot, and a calling card in a wide range of industries. 4.3%

Technical SalesSales pros typically fatten their paycheck if they can handletechnologically complex products and services. 4.3%

Customer Service MetricsWith greater focus on customers’ experience, companies wantstaff who can track user satisfaction and anticipate future needs. 4.3%

Financial AnalysisManaging costs, revenue, and (ultimately) profitability makesyou a key team asset. 4.0%

Risk Management/Risk ControlThe ability to assess and minimize operational threats yieldsa pay premium in fields ranging from business to health care. 3.9%

SAP Material ManagementThis piece of software is important for managing purchasing,inventory, and other elements of a supply chain. 3.9%

Business AnalysisWorkers who can identify business needs and solutions tendto earn more across a broad range of occupations. 3.8%

IT Security and InfrastructureA wave of high-profile hacks has driven employers to pay morefor people who can protect tech systems from breaches. 3.7%

Lean ManufacturingThis skill set, focused on reducing waste, is tied to a managementphilosophy that grew out of a Toyota manufacturing system. 3.6%

ForecastingCompanies value this skill, which pairs management insightswith historical data to generate business outlooks. 3.5%

Clinical EducationThe ability to teach patient procedures correlates with higher payin health care and social sciences as well as education. 3.4%

Computer-Aided Design/ManufacturingThese digital product design skills pay off in fields as varied ashealth care and engineering. 3.4%

Systems TroubleshootingEarn more in several fields with this problem-solving approach,which methodically diagnoses and repairs operational failures. 3.3%

New Business Development Bringing in partners and brokering revenue-generating deals aregood ways to pump up your paycheck.

3.0%

NOTES: Analysis identified skills that delivered a 3% or greater pay boost across three or more of the Department of Labor’s 23 major occupation groups, holding other factors (such as title,location, and years of experience) constant. Full methodology on page 47. SOURCES: PayScale.com, MONEY research

46 m o n e y . c o m J U N E 2 0 1 6

BEST SKILLS TO EARN A PROMOTIONReady to move up? MONEY and PayScale identified the skills that distinguish executives and managers from employeesfurther down the ladder. (The bigger the text size, the more significant the difference.) Some of these talents are also

associated with significantly higher salaries—but not all. At senior levels, a quality like leadership is simply table stakes.

AT THE EXECUTIVE LEVEL

1. Team Leadership » 2. Event Management » 3. Clinical Supervision » 4. People Management » 5. Operations Management

6. Legal Compliance » 7. Sales Management » 8. ADP Payroll System » 9. Accounting » 10. Employee Relations

AT THEMANAGER

LEVEL

business managementstrategy development

profit and loss statements

strategic planning

commercial loansbusiness strategy

organizational development

business development

leadership

program management

management of profit and loss state-ments in the No. 2 spot. Executives withthat skill also earned 5.4% more thantheir peers.

“When I work with executives, I findthat what’s really missing is an under-standing of big-picture questions,” saysLys. “They will be trained in how to booka transaction, but they don’t know howto look at financial statements and an-swer whether this company is doing wellor not and why.”

Even workers in creative fields mayneed to make business decisions thataffect the bottom line. “One of my clientswas a photographer who wound up work-ing for a photo agency,” says Paul McDon-

ald, senior executive director at staffingfirm Robert Half. As this person advanced,he wound up working more with the agen-cy’s clients, McDonald says. “And all of asudden he was involved in the financesand budgeting of the entire company.”

Top Business Skills / Avg. Pay Boost» Contract Negotiation +5%» Financial Analysis +4%

W R A N G L I N G N E W T E C HIt’s hardly news that hard-core techfolks—coders, IT managers, server ad-ministrators—have a major edge when itcomes to valued job skills. A LinkedIn

“When Iwork with

executives,I find that

what’s reallymissing is an

understandingof big-picture

questions.”—THOMAS LYS,

KELLOGG SCHOOL OFMANAGEMENT

NOTE: Skills here are disproportionately more likely to appear in executive or manager/supervisor profiles than in lower-level jobs. SOURCES: PayScale.com, MONEY research.

CAREERS 2016 M O ST VA L U AB L E S K I L L S

analysis of the most in-demandskills for 2016, for instance, foundthat 19 of the top 25 were technol-ogy-related, with the top of the listdominated by cutting-edge areassuch as cloud computing, softwaredevelopment for mobile devices,and online security.

But IT skills are only a minorpart of the story, says LinkedInspokesman Joseph Roualdes:“Tech is in demand across nearlyevery industry.”

Most employers favor techni-cal skills specific to the field,notes Katie Bardaro, PayScale’svice president of data analytics.Just within human resources,for example, a separate PayScaleanalysis found that workers who canuse the popular Workday software arepaid 9.6% more than their peers. Thosein health care earn 8.5% more if wellversed in Epic software, which helpscompanies manage electronic healthcare records. Marketers, meanwhile,must navigate search engine behaviorand customer analytics.

Not sure what matters most in yourfield? Ask your manager what technicalskills are missing from your team, saysRobert Half’s McDonald.

Top Tech Skills / Avg. Pay Boost» Search Engine Marketing +5%» Customer Service Metrics +4.3%» SAP Material Management +3.9%

STR AT E G I C T H I N K I N GIf you right-brain types are starting tofeel discouraged, take note: Some of themost sought-after skills have nothingto do with science and technology. Twoof the 10 most valued skills involve high-level thinking and organization: strate-gic project management and strategicplanning. “Strategy is about under-standing the business purpose of a job

rather than just the tasks of a job,” saysBoston-area recruiter David Hayes.

And the higher you go, the more valu-able strategic thinking becomes. Both“strategy development” and “businessstrategy” are skills that set executivesapart, for instance. Moreover, even with-in that elite stratum, workers with thoseskills earn 9.1% and 8.2%, respectively,more than those without.

Top Strategy Skills / Avg. Pay Boost» Strategic Planning +4.3%» Business Analysis +3.8%

J U N E 2 0 1 6 m o n e y . c o m 47

MONEY and PayScale.com

combed through the compensa-

tion experts’ database of 54

million employee profiles, ranging

across 350 industries and 15,000

job types, looking at worker pay

and the skills employees said

were critical to their job. Here’s

how we used that info:

» For the Most Valuable CareerSkills list (page 45), we identified

those correlated with at least 3%

higher pay for three or more major

job types—defined by the U.S.

Department of Labor’s Standard

Occupational Classifications—

holding constant title, location,

experience, and industry.

» Best Skills to Earn a Promo-tion (opposite page) highlights

talents that are correlated with

at least 2% higher pay and are

disproportionately more likely

to show up at the executive or

manager/supervisor level than

at lower job levels. We then

ranked them by how often they

appear, with higher pay used

as a tiebreaker.

» The Most Flexible CareerSkills (page 50) correlate with

at least 2% higher pay in seven

or more major job types. For all

the analyses, MONEY focused

on professional job titles.

Methodology

• The Highest-Paying Skills for100-Plus Jobs

• The 25 TalentsThat Deliverthe BiggestSalary Boost

• Which Skills to Leave OffYour Résumé

Learn More Online

V I D E O S :

• 5 Secrets toAdvancement Froma Top Recruiter

• Name YourMost Valuable Skill

A N D M O R E . . .

Go to money.com/bestskills

48 m o n e y . c o m J U N E 2 0 1 6

“Give yourboss a

heads-up thatyou’re trying

to improveyourself.”

—CAREER COACHKATHY ROBINSON

How to Get the Skills You Need

Knowing which skills are in demand isthe first step. Next, you’ll need to goout and acquire them—ideally, withoutspending large amounts of money ortaking a lot of time off work.

Fortunately, you have options, andperhaps even employer support—par-ticularly if you understand which abili-ties matter most to the person whosigns your checks. To ensure that yourefforts will be valued (and rewarded),discuss training plans with your man-ager during an annual review or an-other one-on-one conversation.

“That makes it collaborative,” saysKathy Robinson, a career coach in Bos-ton. “Give your boss a heads-up thatyou’re trying to improve yourself andnot happy with the status quo. It makesit more of a partnership.”

The following five strategies canhelp you position yourself for success.

FIND FREE, IN-HOUSE TRAININGNearly 70% of employers offer formalstaff training, according to a recentCareerBuilder survey of more than

2,300 hiring and HR managers. Classescover a variety of soft and hard skills,from public speaking to the basics ofdata analytics. Many large firms giveemployees free access to online pro-vider Lynda.com’s 3,500 web-basedtutorials, which range from design (afive-hour lesson on drawing vectorgraphics) to business strategy (such asan hourlong training session on man-aging budget-constrained projects).

In some cases, Lynda provides com-prehensive, multi-unit “learning paths.”For instance, if you want to pick upcomputer-aided design—No. 19 on theMost Valuable Skills list—Lynda offersfour separate paths, from a 20-hourcourse on the Solidworks program to a53-hour class that trains you to becomean architecture CAD technician.

H I T T H E W E BLike Lynda, sites like Coursera, Udemy,and EdX offer hundreds of online class-es, most of which are free or low-cost(usually less than $100). These sites arebest for people who already know theycan learn well on their own, says careercoach Cheryl Palmer. “It takes a certainamount of discipline to stay motivatedto do this type of training without anyexternal pressure,” she points out.

Want to be able to understand andexploit customer service metrics,No. 10 on the Most Valuable Skills list?Coursera has a four-week CustomerAnalytics course, created by the Uni-versity of Pennsylvania, that will takefive to six hours a week and cost $95.

To beef up business skills, Kelloggprofessor Lys suggests a class in finan-cial statement analysis, which will helpyou look at a firm’s ledgers and inter-pret the results. “If I give you the com-

TOP SKILL FOR…

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pany’s reported financials, you need toknow how to zero in on how well thecompany is doing,” he says. “For ex-ample, labor expenses can be hiddenunder the cost of goods sold. If you’rein human resources, it can be reallyhelpful to know that.”

G E T C E RT I F I E DFor some skills, particularly those tiedto software, recruiters and hiring man-agers seek out formal certifications. Soif you’re learning, say, SAS or medicalbilling tools, take accredited classes,says Randstad’s Fiatte—perhapsthrough a professional organization orlocal college.

Project management, the mostflexible skill we identified (see thegraphic at left), falls into this category.Already doing the work? With threeyears of related experience, you can getcertified as a Project ManagementProfessional. You’ll need 35 hours ofcoursework—you can use online study(some of which is free) or classroomtraining (often around $1,000)—and apassing grade on the 200-questionexam ($555 to the Project ManagementInstitute, which issues the credential).

Half of the companies in the Career-Builder survey said they pay for at leasta portion of training and certificationsthat employees get on their own. Evenif your company doesn’t have a formalprogram, ask whether your managerwill cover at least some of the cost (and,if needed, give you time to attend class).

If you pay out of pocket—even ifyou’ll get reimbursed eventually—youcan use federal student loans to coverthe bills, as long as you’re taking class-es at an accredited institution. And foraccredited education costs your em-ployer won’t cover, you can claim 20%(up to $2,000 a year) as a lifetimelearning credit on your tax return ifyou fall below the income limit($130,000 modified adjusted gross in-

come in 2016 for married couples fill-ing jointly, or $65,000 for singles).

V O L U N T E E R FO R A P R O J E C TIn some cases, suggests recruiter Mc-Donald, hands-on practice is the bestway to learn. Is your company investi-gating a new cloud software package,for instance? Ask to be one of the tes-ters and, ideally, to help with the imple-mentation of the selected tool. “It’s away to get both learning and experi-ence,” McDonald says.

Another spot where real-life experi-ence helps is contract negotiation, No. 5on the list. Don’t expect to be includedon big transactions, says Robinson, thecareer coach. But your manager maylet you take on a smaller deal, handlepart of a client relationship, or shadowsomeone during negotiations. “Askingyour boss to put you in that situation isthe first step,” Robinson says.

Palmer suggests another tactic: Pickup skills by volunteering at a nonprofitor an industry group. “You can use a sitelike volunteermatch.org to find local op-portunities in the type of work that youwant to gain expertise in,” she says.

L I N E U P A M E N TO RTo develop a trait like strategic think-ing, suggests Samantha Raniere, anexecutive coach in San Francisco, finda personal adviser—someone who canboth demonstrate the higher-level skilland give you immediate feedback onyour own projects. Ideally, this will besomeone you work closely with, per-haps even your manager. “You want towork under someone who is reallygood at it,” Raniere says.

Again, as with most skill building,you’ll probably need a mix of new in-sights and practical experience. “Theideal setup for success,” she says, “ishaving an apprenticeship or mentor-ship, backed up by deep knowledge ofthe business.”

50 m o n e y . c o m

MOSTFLEXIBLE

CAREERSKILLS

Looking to jump to a newjob or industry?

The following talents arevalued across a wide range

of professions.

NOTES: These skills show at least 2% higherpay across seven or more of the Labor

Department’s major job classifications; paydifference was used as a tiebreaker.

SOURCES: PayScale.com, MONEY research

1. Project Management

(17 out of 23 major job types)

2. Leadership

3. Budget Management

4. Training ProgramDevelopment

5. Program Management

6. Strategic Planning

7. Financial Analysis

8. Regulatory Compliance

WHAT ONE SKILL HAS MOST HELPED YOUR CAREER? Let us know at letters@moneymail.com.

TOP SKILL FOR…

CAREERS 2016 M O ST VA L U AB L E S K I L L S

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CAREERS 2016 DREAM MAKEOVERS

NOTREADY

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GETTINGON THE

RIGHTTRACK

SEEKINGA BIGGER

STAGE

J U N E 2 0 1 6 m o n e y . c o m 53

Introduceyourself

to themarketing

team.

Lose theChuckTaylors.

Take carewith your

cash flow.

I Wanta Career

MakeoverTeam MONEY to the rescue:

Our experts give advice on jobs,finances, and fashion to three

professionals ready for a change.

By ELAINE POFELDT and KERRI ANNE RENZULLI

HELP!

54 m o n e y . c o m J U N E 2 0 1 6

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CAREERS 2016 DREAM MAKEOVERS

Are you yearning to make abig change to your career?Maybe you’re ready to takea big leap in responsibilities.Maybe you’d like to stay rel-evant in a shifting work-place. Or maybe you justwant to get on a differenttrack altogether.

Whatever your dream, wouldn’t you be hap-py to inhabit your own little Cinderella story—one in which a team of experts swoops in withwise counsel to put you in reach of your careergoal? Wouldn’t it be great to have a lineup ofadvisers offering practical strategies on how toget an edge and unlock your full potential?

That’s the fantasy that MONEY has made areality for the three profes-sionals in this story. They’reat different stages of theircareer, each with a differentgoal and each facing differ-ent challenges in reaching it.Coming to their rescue withadvice tailored especiallyfor them are four specializedpros: a human resources

consultant, a job coach, a certified financialplanner, and an image consultant.

What our three subjects have in commonwith one another—and perhaps you—is adesire to make a major change, a willingnessto listen to good advice, and a readiness toact on what they’ve heard. Read their storiesto learn about the challenges they face andthe solutions that MONEY’s experts have de-vised. And prepare to take full advantage oftheir wisdom in order to land work that’s agreat fit for you. In other words, get ready forthe next dream career makeover: yours.

“Dress for the role you want tobe in, not the one you have.”

The MONEY Makeover Team

“Be the CEOof your own career.”

Jaime Klein launched InspireHuman Resources, an HRconsulting firm, in 2007.She formerly worked forAmerican Express and hasa master’s degree inorganizational psychology.

“Changing jobs? Don’t jump off acliff unless there’s water below.”

Donald Duncan is a certifiedpublic accountant and a certi-fied financial planner with 35years of experience. Based inChicago, he heads D3 Finan-cial Counselors, which hefounded in 1997.

“Transitions aren’t failures,but times of opportunity.”

Linda Rossetti is a careercoach in the Boston area whospecializes in life transitions.She’s the author of Women &Transition and managingdirector of an angel-investor capital network.

Sylvie di Giusto is an imageconsultant and corporatetrainer based in New YorkCity. She’s the author of TheImage of Leadership and aformer corporate humanresources executive.

MAKEOVERSIN ACTIONWatch all

three subjectstransformed

in before-and-after videos.money.com/

bestskills

Trademarks are used with permission. Appearance does not constitute a USPS endorsement. United States Postal Service. All Rights Reserved. The Eagle Logo is among the many trademarks of the U.S. Postal Service®.

WHEN YOU SHIP WITH US, YOUR BUSINESS BECOMES OUR BUSINESS.That’s why we make more eCommerce deliveries to homes than anyone else in the country.

Learn more at usps.com/deliver

56 m o n e y . c o m J U N E 2 0 1 6 Main portraits photographed by ac k e r m a n + g ru b e r

CAREERS 2016 DREAM MAKEOVERS

B rittny Grady got hooked onmarketing in college, in partthrough internships doing so-

cial media and community outreachfor a local arts group. But aftergraduation Grady couldn’t find a jobin her chosen field. Needing to repaystudent loans and meet living ex-penses, she landed a sales assistantjob at a computer company. Promot-ed to account manager—she sellsgoods and services to firms thatresell them to small businesses—she now earns about $45,000a year, including commissions.

Grady hopes to pivot from salesto marketing, but she hasn’t seenmany entry-level openings at heremployer. Earlier this year she start-ed applying for marketing jobselsewhere. She has gotten encour-agement and advice from a mentorwho works in the field, but despiteGrady’s sales experience and pro-motion, her five applications thusfar have led nowhere. “I still can’tseem to land the job that’s right forme and get my shot,” she says.

Accentuate the positives.

Grady’s biggest impedi-ment to nabbing an entry-level marketing gig is herrésumé, says Linda Ros-setti. “None of her greatwork experiences or pas-sion for marketing comesacross,” she says. In the“Experience” section,she needs to play up hercollege marketing efforts,highlighting “marqueemoments” or accomplish-ments, especially any thatcan be quantified. Sheshould also draw attentionto her former duties as asales assistant, which gaveher experience trackingand reporting on sales andmarketing programs.

Grady also needs tocustomize her résumé foreach job application, saysRossetti. “Look over the joblisting carefully and mirrorthe language they use,”she says. “You want theirkey phrases to pop up inyour résumé so that whenthey use software to sortthrough online applications,yours rises to the top.”

Do some marketing now.

Grady, who majored incommunications at schooland took courses in bothmarketing and public rela-tions, has to beef up herreal-world experience,says Rossetti. Her sugges-tion: Grady, who operatesa mentoring program forteenage girls locally,should put some marketinggoals into place for theprogram, then work onfulfilling them. “She canpoint to that success ininterviews,” says Rossetti.

Don’t give up at work.

Even if Grady isn’t workingin the marketing depart-ment, she can get experi-ence by taking on projectswith a marketing bent, saysJaime Klein. She needs tointroduce herself to peopleon the marketing team. Thatwill put her on their radarif an opportunity does arise,and it will increase herindustry knowledge, betterpreparing her for futureinterviews. Soon after-ward, Grady says she hasmade email contact withsomeone from marketing;they’ll be talking soon.

Lighten up on plastic.

Given Grady’s $13,000 in federalstudent loans and $1,700 creditcard balance, Donald Duncan saysa top priority for her is to lowerher debt—a move that will make iteasier to handle the salary cutshe’ll probably have to take to gether first marketing job.

Grady is paying the minimumon her credit card debt, butDuncan wants her to pay off thefull balance at once by tappingher $2,300 emergency fund.“The interest you would savewould be phenomenal,” he says.Afterward, she can focus onrebuilding that emergency fundto cover three months of livingexpenses. “Cutting down debt ismy No. 1 priority,” she says.

“I’m going to pay it off in full,using my savings.”

Come up with a system.

Grady, who says she feels under-educated about personal finance,hasn’t really focused on whereher money goes. Compensated viaa combination of salary and com-missions, she tends to spend herbase pay on day-to-day expenses,except for automated savings of

$25 per check. She uses her com-mission money on treats for her-self like hair appointments.

Duncan says she can makeheadway toward financial stabilityby dividing her commission checkinto thirds, among student loans,fun stuff for herself, and savings—in both her emergency fund anda 401(k). “This is a great idea,”says Grady. “I’ve never taken thetime to break it down before.”

The Financial Plan

The Job Hunt

B E F O R E

Brittny Grady / 26 / Account Manager / Nashville

Getting onthe Right Track

Show maturity.

It’s important for Grady topresent herself as a respon-sible, experienced profes-sional, says Sylvie di Giusto.For women, makeup is animportant finishing detail intheir overall look, she says.“It shows you’ve put in ef-fort.” But, she adds, “keep itsimple and natural. You don’twant to stand out because ofyour makeup.”

Overprepare.

Wearing a jacket to an inter-view will reinforce Grady’sprofessional appearance,says di Giusto. If the office ismore casual than anticipated,she can take it off. But if shedoesn’t bring one and the of-fice is dressier, she can’t adda layer. “A jacket,” she says,“can be your lifesaver.” SaysGrady, “I agree it gives amore polished look. I feelmore put-together in it.”

Wear a fitting shoe.

Especially for job interviews,di Giusto tells Grady to find acomfortable midsize heelthat makes her feel happy:“When you wear a greatheel, your body languagechanges. You walk straighter.Your shoulders go back. Youappear more confident.”Grady reports that she likesthe heels she wore in thephoto shoot: “They had a bitof personality.”

The Image

“Thisoutfit

made mefeel like,‘This jobis mine.

You needto hireme.’”

A F T E R

CAREERS 2016 DREAM MAKEOVERS

58 m o n e y . c o m J U N E 2 0 1 6

O ver the 17 years Jerry Sorokinhas been executive director ofthe Shulman Hillel Founda-

tion at the University of Iowa, theJewish group has tripled the num-ber of students and communitymembers it regularly serves. Boththe organization’s finances and thephysical plant have gone from “pre-carious and leaky” to “secure andupdated,” he says.

This year, however, the founda-tion’s income fell when longtimetenant UI ended its lease. After theHillel board said it would cut hispost’s total compensation, includinghealth benefits, by $45,000—his sal-ary is now $83,000—Sorokin decidedit was time to move on. He’d like towork as an executive director ata larger nonprofit organization, notnecessarily a religious one. But hefears that the Hillel’s small size—hesupervises only three employees—has been a strike against him in pastjob interviews. “I could just see itin the eyes of the people asking mequestions,” he says.

Don’t underplay

your oversight.

Just because Sorokinsupervises only threeemployees doesn’t mean helacks the skills to manage alarger staff, says Rossetti.On his résumé and ininterviews, she says, hecan play up his manage-ment experience in otherways. For example, Sorokincurrently oversees a20-member student board.He also provides leadershipdevelopment, informalreligious education, andpersonal, academic,and career counseling tostudents. Klein says it couldbe a plus for him to explainthat he has learned tolead teams over which hehas no formal authority.Sorokin agrees: “That’sdefinitely a direction I’mgoing in,” he says.

Toot a louder horn.

Sorokin’s résumé doesn’tdo his accomplishmentsjustice because it’sphrased weakly, Rossettisays. He needs more action

verbs, and should highlightmajor achievements asspecifically as possible,showing off measurableresults. For instance, hementions “Ability to securekey leadership endow-ment.” She says to restatethat as “Secured $1 millionleadership endowment.”

Sharpen your delivery.

Unsurprisingly for a manwho has spent his life in ac-ademia (he has a Ph.D. inpolitical science from theUniversity of Michigan),Sorokin confesses that hetends to speak in para-graphs—a habit that hasalienated search commit-tees comprising action-oriented businesspeople.“They often find me te-dious,” he says, based onfeedback he’s received.Rossetti suggests he outlinebullet-point answers toquestions he might beasked; after providing abrief initial response, hecan ask permission to con-tinue with, “Now I’d like togo into depth. Is that okay?”Sorokin says he fullyintends to break out of“50-minute lecture mode.”

Keep cash coming in.

Upon Sorokin’s planned departurefrom Hillel at the end of June, he’llreceive $41,000 in severance andvacation pay. Between that andthe $80,000 that Sorokin’s wife,Claire Chapnick, earns as a publicschool teacher, Duncan estimatesSorokin has up to 10 months to

find a new job before the couplewould have to dip into their$15,000 in cash savings (they alsohave $750,000 in retirement andother accounts). If Sorokin hasn’tfound his dream job within fivemonths, however, he should thinkabout a less-than-perfect orpart-time job, says Duncan. Sor-okin agrees, adding that evenworking temporarily as a baristawouldn’t be out of the question.

Scale back on savings.

Sorokin and Chapnick set aside$2,200 a month for retirement,including their employers’ contri-butions. Duncan, who says thecouple are doing “a pretty goodjob” of saving for retirement, tellsSorokin that if funds run low in10 months, they should suspendcontributions in order to meetliving expenses. “I hope we don’thave to make that call,” says

Sorokin. Though the couple have$130,000 in college funds fortheir two daughters, both in highschool, Sorokin fears it’s notenough. Duncan suggests the girlsshoulder more of the financialburden: “You have to focus on oneproblem at a time.” Sorokinagrees—sort of: “If they get into avery prestigious school, and thereis any way to make it work, I amcommitted to trying to do that.”

The Financial Plan

The Job Hunt

B E F O R E

Gerald Sorokin / 52 / Nonprofit Administrator / Iowa City

Seeking aBigger Stage

Break out the clippers.

To help present himself as a leader,says di Giusto, Sorokin needs amore polished, businesslike image.Sorokin, who has worn a beard formost of his adult life, is worrieddi Giusto is going to tell him to shaveit. She says he just needs it trimmed,along with his hair, “so it all lookskept together.” Sorokin dutifullyheads to the barber.

Fix the smile.

Also detracting from Sorokin’simage, says di Giusto, is a chippedfront tooth. Repairing it will cost$1,000, he tells her. She isunequivocal. “Fix it,” she says.“If you don’t take care of yourself,people will think you don’t have theability to take care of others.” Hetakes her advice seriously. Asked ifhe plans to follow up, he replies,“Nine-thirty tomorrow morning.”

Dress for the boardroom.

Though attire in the nonprofit sectortends toward business casual,di Giusto says that because Sorokinis applying for posts in which he willbe responsible for finances, heshould dress more like a banker forthe initial interview. That meanswearing a dark suit in a color suchas navy, a light-colored shirt and tie,and good-quality leather shoes—orperhaps a sport jacket if he makes itpast the initial interview and isfeeling comfortable. “People want tosee someone they can trust,” saysdi Giusto. Sorokin says he’s game.

The Image

A F T E R

“I havebeen

frustratedin my

inabilityto moveup. This

has beenuseful.”

CAREERS 2016 DREAM MAKEOVERS

60 m o n e y . c o m J U N E 2 0 1 6 HAVE YOU MADE OVER YOUR OWN CAREER? Tell us about it at letters@moneymail.com.

W ith more than 30 years ofexperience shooting,editing, and producing

video, Byron Caplan is a televisionnews pro. He’s covered everythingfrom potholes to the presidency, inplaces ranging from Maine to NewOrleans. He’s also taught journal-ism and digital media, and hasspent the past two years as a pro-fessor of digital media at FloridaState College in Jacksonville.

But with his $55,000 teachingjob ending in June, Caplan, wholives with his girlfriend, is now at acrossroads. He has applied for localmedia jobs for which he feels“eminently qualified,” but he hasgotten no response: “I start towonder if it’s the age thing.”

As a Plan B, Caplan is consider-ing starting a business to createvideos documenting older people’slife stories. “I am very youthful andhealthy,” says Caplan, whose84-year-old mother still plays theharp professionally. “I’d like to re-main vital and make an income.”

Network better online.

For Caplan to start gettingresponses to online appli-cations, says Klein, heshould be looking for peo-ple in his LinkedIn networkwho can put in a goodword for him. “If I get arecommendation fromsomeone in my network,”says Klein, “I always givethat person a phone inter-view.” Along with addingcontacts on LinkedIn, Kleinsays, Caplan should postwork samples and moreinformation about awardshe has earned, since manyrecruiters use the site toscout for talent.

Prepare for Plan B.

Caplan needs to spendsome time on the logisticsof working in a gig econ-omy, says Rossetti, espe-cially since so much mediaemployment is on a free-lance basis. In launching hisown venture, he’ll have tolearn how to tackle detailslike financing, marketing,and pricing. He can getstarted by using the Small

Business Administration’s“Create a Business Plan”online tool (sba.gov/tools).Caplan can also get freehelp from a local volun-teer at SCORE (score.org),a nonprofit organizationthat provides guidance tosmall businesses. Caplan,in fact, has already metwith a SCORE mentor, andsays he got good feedbackon his idea.

Set yourself apart.

Caplan is already network-ing in person at meet-ups(meetup.com)—gatheringsof people with a particularinterest—where he tellspeople about his work ex-perience. Says Rossetti:“They are fantastic.” Butrather than dwell on his jobchronology, he needs to in-troduce himself in terms ofwhat makes his work spe-cial, she says. Later on,through a connection hehad already made at ameet-up, Caplan secured agig directing a fashion videothat will be submitted to afilm festival. “That wasgreat,” he says. “I got todirect and did well—andpeople saw me doing it.”

Speed up the job search.

With his $155,000 home fully paidoff and $322,000 in retirementsavings, Caplan isn’t panicking. Butthough his expenses are low—right now he spends about $1,500a month—he’ll need a new gig tolive as well as he’d like, says Dun-can. With $2,000 in liquid savings

and his paychecks on the way out,Caplan has until roughly the end ofOctober to get a job or dip into otherfunds. Health insurance could costhim up to $1,000 a month until hequalifies for Medicare at age 65.Basic living expenses could take abite out of Caplan’s budget fortravel and entertainment. Caplan,who is busy job-hunting and de-veloping his business idea, says heisn’t worried he’ll run out of funds

this fall. “I feel like I’ll get a jobbefore then,” he says.

Caplan thinks he’ll need $15,000to $20,000 to launch the videobusiness, but Duncan suspects itwill cost more; when he himselfwent solo, he had three years ofliving expenses in the bank.

Plan for the long haul.

Caplan will qualify for about$2,200 a month in Social Security

if he waits until age 66, but only$1,600 if he starts taking it atage 62. If Caplan can’t get a job,Duncan suggests living off hisretirement account first, sincethat would let his Social Securitybenefits grow—and he’d lower hisIRS bill by being in a low taxbracket while drawing down hisretirement savings. Caplanagrees with Duncan, calling takingSocial Security early a “Plan F.”

The Financial Plan

The Job Hunt

Not Readyto RetireByron Caplan / 61 / Videographer / Jacksonville

B E F O R E

Demonstrate some flair.

Caplan needs to show that he’s cre-ative and lively, says di Giusto—but ina way that suits his age. He shouldstart by replacing his professorialtweed blazers and T-shirts with asport jacket in a “power” color likeblack or navy blue and a contrasting-color dress shirt left open at the neck.“You are going into multimedia,” shesays. “What people want to see iscreativity.” An accessory, such as apocket square, adds some personal-ity, she says. “I could handle that fora job interview,” agrees Caplan.

Skip the Hollywood hair.

On the subject of creativity, Caplanhalf-jokingly asks whether he shouldcolor his hair all white, like RutgerHauer’s character in Blade Runner.Di Giusto objects: “What are you go-ing to do with your eyebrows? Youreyelashes? Whiten them?” she asks.“It’s a little bit of maintenance. Areyou willing to do that?” No, he says.A better way to make a statement,she says, would be a dramatic newpair of eyeglasses. He disagrees.“These are timeless and fit the shapeof my face well,” he says.

Dress your age.

Caplan asks about wearing skinnyhipster pants, but di Giusto rejectsthat idea. “Although you should gowith trends, you have to look age-appropriate,” she says. “I don’t wantyou to dress like a 30-year-old.”Caplan deems that wise advice, butlater says he may still buy a pair oftapered pants to see how they look.

Put the right foot forward.

Instead of his Chuck Taylor sneakers,Caplan should wear some new leathershoes, though nothing too fancy, tomatch the look. “If your shoes aredirty or worn,” di Giusto says,“everyone will focus on the shoes.”Caplan says he can see himselfwearing a pair of brown bucks.

The Image

“I haveconfidenceI’m going to

be okay.”

A F T E R

62 m o n e y . c o m J U N E 2 0 1 6

ave investors given up on trying to beatthe market? It may look that way. Between January 2014and March 2016, they yanked $111 billion out of “activelymanaged” funds and ETFs—you know, traditional portfoliosrun by stock pickers. At the same time they plowed more

than $434 billion into index funds, which simply buy and hold all the stocksin a given market, according to Cerulli Associates.

Yet actively managed portfolios still hold the bulk of all mutual fundassets. And some of the highest-profile champions of indexing—legendaryinvestors like Jeremy Grantham and Jack Bogle, founder of Vanguard and thefather of indexing—believe there’s a place for active strategies in your portfolio.The key is coming up with the right strategy to improve your odds of success.

A C T I V E L YM A N A G E D F U N D S

WAYS TO BY PENELOPE WANG

ILLUSTRATIONS BY YAREK WASZUL

Professional stock jockeys face long odds. But if you followsome simple rules, you can harness the winning attributesof successful funds while reining in losing bets.

WIN THEFUND RACE

HOW DO YOU USE ACTIVE FUNDS? Tell us at pwang@moneymail.com.

“if you’re looking for active funds that are likelyto beat their benchmarks, low-cost funds are a good place tostart,” says Ben Johnson, Morningstar’s director of globalETF research. In a recent study, Morningstar compared theshort-, mid-, and long-term returns of actively managed stockfunds against index funds, then ranked the results by cost. Inevery single category, the lowest-cost portfolios had a betterchance of outperforming than the most expensive (see chart).

BE BETTER THAN AVERAGE ON FEES. Fund fees have been falling

How tough is the challenge?Well, over the past decade onlyabout one out of five actively

managed domestic and foreign stockfunds has managed to beat the indexesthey’re measured against. Those long oddsare one reason MONEY recommends youuse low-cost index funds and ETFs toanchor the bulk, if not all, of your portfolio.

Still, there’s a benefit to studying the20% or so of actively run funds thatactually succeed over time. After all, thereare some areas of the market that aren’teasily tracked by an index. There are someparts of your portfolio where you maysimply prefer to go with an active man-ager. And there are some circumstances—for instance, in your 401(k)—when limitedchoices may require you to look beyondindex funds.

Whichever situation you find yourselfin, you can use the following five rules forinvesting with actively managed funds tohelp you create a portfolio that addressesyour long-term need for growth and in-come while also satisfying any urge youmay have to be better than average.

across the board, but the typical active stock fund still charges1.3%. Yet many actively managed funds charge far less. In ourMONEY 50 recommended list, the expense ratio for Vanguard

International Growth (VWIGX) is just 0.47%, vs. 1.36% for its aver-age foreign-fund peer. The fund has beaten its benchmarkover the past three, five, 10, and 15 years. Dodge & Cox

Stock (DODGX) charges 0.52%—less than half what the averagelarge value fund does—and has outpaced the S&P 500 by 1.5percentage points annually over the past 15 years.

SAVE EVEN MORE. Cheap or not, actively managed funds tendto rack up more capital gains than index funds. So stashyour low-cost active portfolios in tax-sheltered accountssuch as your 401(k)s and IRAs. “Given how difficult it is tobeat the market, you don’t want to give up a big portion ofthose returns to taxes if you can avoid it,” says adviser BenCarlson, author of A Wealth of Common Sense.

there are a few areas of the market that aren’teffectively tracked by benchmarks, creating opportunities forsmart managers. You just have to know where to find them.

LOOK IN FIXED INCOME. The bond market is quite byzantine.Among corporate, government, municipal, and foreignbonds, there are millions of individual securities, many of

which rarely trade. Actively man-aged bond funds can avoid theseilliquid areas, unlike index funds. They can also sidestep a problemunique to fixed income. In the stockmarket the more attractive andsuccessful a company is, the biggerits value and the greater its weight-ing in index funds. In bonds it’sthe opposite: The more indebtedthat companies or governmentsare, the greater their representa-tion in bond funds. This is why U.S.government-related debt makesup around two-thirds of the iSharesCore U.S. Aggregate Bond ETF,which tracks the Barclays U.S. Ag-gregate Bond Index. Yet some fear

Percent of managers who have beaten theirindexes over the past five years.

64 m o n e y . c o m J U N E 2 0 1 6

30%Emergingmarkets

10%U.S. small

stock

21%Globalstock

16%U.S. large

stock

56%Municipal

bond

53%Foreign

small stock

58%Intermediate-

term bond

PICK YOUR SHOTS

CHEAPERIS BETTER

RULE NO. 1

RULE NO. 2

A C T I V E L YM A N A G E D F U N D S

SUCCESS RATE OF STOCK PICKERS

that government bonds are particularly frothy now.Active funds such as Fidelity Total Bond (FTBFX) and

Dodge & Cox Income (DODIX) can go light on Uncle Sam.Both portfolios, which are in our MONEY 50 list ofrecommended funds and ETFs, keep nearly halftheir assets in corporate bonds. And both havebeaten the index in the past five and 10 years.

CHERRY-PICK OVERSEAS. Start with emerging-markets stocks, down around 30% since 2011. “Five-year bear markets are rare, and they’re a beautifulopportunity to buy at cheap prices,” says Rob Arnott,chairman of Research Affiliates. Trouble is, 21% ofthe MSCI Emerging Markets Index is in energy, ma-terials, and industrials—commodity-driven groupsthat used to drive the developing world but no longerdo. T. Rowe Price Emerging Markets Stock (PRMSX) fo-cuses on faster-growing areas, which has led the fundto tech, financial, and consumer stocks. It has lessthan 7% of its assets in commodity-related sectors.

Small international stocks are another cate-gory in which the odds have been in active manag-ers’ favor (see chart). Because these shares areoften thinly traded, they are difficult for indexesto include. “Adding foreign small stocks can im-prove risk-adjusted returns,” says Gregg Fisher ofGerstein Fisher. One standout fund: T. Rowe Price

International Discovery (PRIDX) has outpaced around80% of its peers over the past five, 10, and 15 years.

Most investorsgive up too

soon and sell atthe bottom.”

—RAJAT JAIN, LITMAN GREGORY

you know that being asuccessful investor requirespatience. “Most investorsgive up too soon and sell atthe bottom,” says Rajat Jain,a senior investment analystat Litman Gregory.

But even if you plan tostick around for, say, a decadeor longer, there are no guar-antees that your fund manag-ers will too. Nearly three outof four stock portfolios are ledby managers who have been

at the helm for under a decade, according to Morningstar.CHOOSE BANDS OVER SOLO ARTISTS. Forget searching for the

next Peter Lynch or Bill Miller or Joel Tillinghast (see “X-Ray:Fidelity Low-Priced Stock” on page 39). Instead focus onfunds led by a strong team of managers that, if necessary, can

fill in for departing talent.How can you find them?

For guidance with theMONEY 50, we look toMorningstar’s “stewardshipratings,” which grade fundgroups on qualities such ascorporate culture, invest-ment process, and manager

tenure. This helped identify funds such as Dodge & Cox Stock

(DODGX), which is run by an eight-member investment teamwith an average tenure at Dodge & Cox of 23 years.

To be sure, experience is no guarantee of future perfor-mance. But mutual fund companies with an average man-ager tenure of more than 15 years generally outpace thosewith shorter tenures, says Bridget Hughes, a research direc-tor at Morningstar. Over the past 15 years the Dodge & CoxStock Fund has beaten more than 90% of its peers.

J U N E 2 0 1 6 m o n e y . c o m 65

FORGETROCK-STARMANAGERS

Your chances of beating the market were much better withinexpensive funds than high-cost ones in the past 10 years.

Cheapest 25% Most expensive 25%

Large value fund

48%54%

Mid value fund Small value fund

22% 19%

43%

23%

While you want to buy and hold fundsfor more than a decade, most man-agers don’t stick around that long.

28%More than10 years

72%Less than10 years

RULE NO. 3

GRAPHIC NOTES: Tenures are based on single-manager funds and averages forteam-run funds. SOURCES: S&P Dow Jones Indices, Morningstar

IMPROVE YOUR ODDS WITH LOW-FEE FUNDS

SHORT TRACK RECORDS

66 m o n e y . c o m J U N E 2 0 1 6

though the odds are stackedagainst them, some active managersdo find a way to beat the market overthe long run. The trick is making sureyou don’t dilute their results with theperformance of their lesser peers.

LIMIT YOUR WAGER. Di-versifying is usually asmart move—but notwhen it comes to activefunds. In fact, you’re bet-ter off sticking with justone or two active fundsper asset class (seechart). When you get toa third, your chances oflagging an index port-folio are really high,according to a study by

financial analyst Richard Ferri, founderof Portfolio Solutions, and adviser AlexBenke of Betterment.

CONTROL YOUR EMOTIONS. Behavioralfinance expert Meir Statman notes thatthough it’s difficult to win with activemanagement, many people embracethe challenge. The key, the Santa ClaraUniversity finance professor wrote inWhat Investors Really Want, is to set alimit on how much money you’ll dabblewith so that you balance your desire tobeat the market with the long odds ofsuccessfully doing so.

Statman suggests restricting youractive bets to the “explore” portion ofyour portfolio—that 10% to 25% ofyour stake with which you may chooseto take on added risk.

The more actively managed funds you own, the less likelyyou are to beat a basic indexed strategy.

RULE NO. 4

LESSIS MORE

9%Three active

funds perasset class17%

One active fundper asset class

13%Two activefunds per

asset class

GRAPHIC SOURCES: Richard Ferri and Alex Benke, “A Case for Index Fund Portfolios”; Morningstar

CHANCE OF BEATING INDEX FUNDS

J U N E 2 0 1 6 m o n e y . c o m 67

investing actively doesn’t just mean pick-ing a fund manager. Nowadays there’s anotheroption: So-called smart-beta index funds andETFs can tilt your portfolio toward investingtraits or “factors” that aca-demic research has deter-mined can do well overtime. These factors includea focus on small-companystocks or shares trading atlow valuations.

Smart-beta funds workmuch as index portfoliosdo—they follow a bench-mark with a strict set ofrules. But while proponentsof smart-beta strategiesoften refer to them as indexfunds, these portfolios are more akin to an activeinvestment approach because they have the samegoal that fund managers do: to beat the market.

UNDERSTAND THE ADVANTAGES. Smart-beta fundshave one clear leg up on human-run funds. Be-cause of their index structure, their costs tend tobe low. The average expense ratio of a stock smart-

beta fund is just 0.61%, less thanhalf of what actively managedequity funds charge.

And because they aren’t run bypeople, smart-beta funds can’t de-viate from their stated strategy—nor can the departure of a managerderail these funds. This explainswhy the strategy has caught on ina big way. Factor funds, as they’resometimes called, are pulling in alot of the money that has been flow-

ing into passively managed portfolios. AVOID THE CROWDS. Hundreds of new smart-beta

funds have launched recently, including thosethat tilt toward everything from low-volatilitystocks to momentum, and even combinations offactors. As more investors pile in, many of the

stocks these funds own are rising in price. Theportfolio held by iShares MSCI USA MinimumVolatility Factor ETF, for instance, has a price/earnings ratio of 24.3, vs. about 19 for the broad

market. Some dividend-paying stocks are also get-ting expensive. “There’sperformance chasing goingon right now, and as pricesrise, the likelihood of earn-ing a premium to the mar-ket diminishes,” says LarrySwedroe, director of re-search at Buckingham.

The better bet: Stickwith tried-and-true tilts.Fortunately, some tradi-tional factors have received

less investor attention lately. Value stocks, forexample, have underperformed growth-orientedshares for much of the past decade. As a result,iShares MSCI USA Value Factor ETF (VLUE) carries aP/E of just 12.6. “The data show that tilting yourportfolio toward value, especially small valuestocks, improves your odds of beating the marketif you hang on for a few decades,” says investmentadviser William Bernstein, author of The FourPillars of Investing.

For a small-cap value strategy, you can put aportion of that “explore” part of your portfolio intoWisdomTree SmallCap Dividend (DES). The ETF, whichis in the MONEY 50, tracks an index focusing onoverlooked shares of dividend-paying small com-panies. It also sports an expense ratio of 0.38%, vs.1.30% for the average small-cap value fund.

You’ve still got to do your part, though. Youhave to be willing to hang on to this type of fundfor a couple of decades or more—perhaps untilretirement. On the plus side, you won’t have toworry about the manager retiring before then.

Because they are passively run,“smart-beta” funds sport lower aver-age expense ratios than active funds.

Stock indexfunds

Smart-betastock funds

Actively man-aged stock 1.30%

0.55%

RULE NO. 5

LOOK BEYONDHUMAN STOCK PICKERS

The data showthat tilting yourportfolio toward

value … improvesyour odds of beat-

ing the market.”—WILLIAM BERNSTEIN

0.61%

A C T I V E L YM A N A G E D F U N D S

A SMART ADVANTAGE

School’s out, and the heat is on to find the perfectT I M E

F A M I L Y

B Y S T I R L I N G K E L S O

TRAVEL

SUMMER

t vacation for you and the kids. Beach or mountains? Theme park or national park?

J U N E 2 0 1 6 m o n e y . c o m 69

These five value-packed trips will get the kids soaked without drowning you in bills.

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Vail’s newest summer resident is the Epic Discoveryadventure park. The big-ticket item is the Canopy Tour($189), a guided zip-line and ropes course through thetreetops. But you’ll save $100 if you opt for the UltimateAdventure Pass, which gets you and the kids all over anexhausting mass of zips, ropes, climbing walls, and tubing.

Vail Mountain itself features dozens of hiking trails. One favorite: the3.2-mile Berry Picker, which snakes through aspens and columbines andoffers views of Vail Village and, from the top of the hike, Mount of the HolyCross. “You can hike it with the kiddos and take the gondola down,” says localblogger Kim Fuller. Refuel with Blue Moose Pizza’s chicken-and-Goudacowboy pie (large, $24). “It’s near a playground and mini-golf course, whichkeeps the kids entertained,” says David O. Williams, editor of RealVail.com.

Before June 22,spacious two-bedroom units at

O U T D O O RA D V E N T U R E

This ski resort to the rich and famous can certainly beexpensive, but in the summer prices melt like the snow.Hotels average $190, down from $353 in high season.And it turns out that, even without its winter blanket, Vailis still a beautiful setting for outdoorsy adventures.

Vail International(vailinternational.com), located be-tween Vail Villageand Lionshead,are $176 a night.Rates jump to$220 in July,though that’s still50% off ski-

WHATTO DO

WHERETO STAY

VA I L , C O L O .

Downtown aglowon a summer night

trip; the Kids AdventureGames come to Vail inAugust (below right).

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Parking in VailVillage typicallyruns $25 a day inhigh season, butit’s free every-where in town dur-ing the summer.

season prices. It’sa tighter squeeze,but you’ll saveeven more whenyou stay at theVail Racquet Club(vailracquetclub.com), where one-bedroom condos(that sleep four),

complete withkitchens and din-ing areas, start at$140 a night, 47%off winter roomrates. Guestshave complimen-tary access toyoga, spin, andfitness classes.

That said, youmight not needyour own wheelsat all. You cancatch the BustangBus in Denver(ridebustang.com;adults, $17; kids,$8.50) and takeadvantage of thealways-free VailTransportationbus service onceyou’re in town.

The Windy Cityis clean, easy tonavigate, and acheap trip. On av-erage, flights toO’Hare Interna-tional Airport aredown 41% com-pared with lastyear, accordingto Cheapflights.com. Chicagois also a greatkid-friendly grubhub. After all, theprime local deli-cacies are pizzaand hot dogs.

Studded with shops,parks, and museums,Navy Pier is one ofChicago’s top touristattractions. It turns 100this year with a focus on

its maritime roots. On June 10–12, theAmerica’s Cup World Series holds qualify-ing races on Lake Michigan. In July atall-ship festival sails into town. Access tothe pier is free, but kids can jump on a tallship for $15 ($25 for adults). A great dealfor literate landlubbers: The ChicagoShakespeare Theater also performs at thepier. People under 35 can buy tickets for $20.

There’s another noteworthy Chicagocentenarian: The Cubs are celebrating their100th year at Wrigley Field. Seats in thebleachers are $13, one of the best deals inbaseball. More amazing: The long-sufferingCubbies could actually win the World Series.

SAVINGSTIP

WHATTO DO

GOT A FAVORITE FAMILY TRIP? Tell us about it at letters@moneymail.com.

U R B A NE S C A P E

C H I C A G O

Cooling off atOak Street Beach

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Summer is peakseason in Chicago,but July and Augusthotel rates average$137, 11% less than

in June, accordingto data-analyticsfirm STR, and 24%less than in otherkid-friendly citiessuch as Boston.Reserve a roomat the brand-newKimpton Gray Hotelby June 15 andyou’ll pay $192 anight, 30% off reg-

ular rates. Locatedright on MichiganAvenue, the EssexInn (essexinn.com)features a roofgarden with parkand lake views.You’ll find roomsfrom $159 to $229,with 10% to 15%off for multi-nightreservations.

If you go to SheddAquarium, theMuseum of Scienceand Industry, theAdler Planetarium,the Field Museum,and Skydeck Chi-cago, the ChicagoCityPass (citypass.com; adults, $98;kids $82) saves53% on the totaladmission. Kidsunder 14 get in freeat the Art Institute.

T H E M EP A R K S

You’ll need extra pixie dustto score a Magic Kingdomdeal these days. A newticketing structure hasraised single-day prices

during peak times, especially school vacations andholidays. One solution: Plan carefully and explorea bit of Orlando beyond the parks.

WHERETO STAY

SAVINGSTIP

O R L A N D O

Catchingthe polar bearswim at LincolnPark Zoo

The CrownFountain inMillenniumPark

The Hippogriff rideat the WizardingWorld of Harry Potter

J U N E 2 0 1 6 m o n e y . c o m 73CR

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The most expensive months at WaltDisney World are June and July, whena one-day ticket costs $114. Hold off untilJuly 24 and the price drops to $102; byAug. 22 you’ll pay $97. For the best deal,buy multiday tickets, says Don Munsil of

the website MouseSavers.com. Munsil recommends afive-day pass ($68 a day, adults; $64, kids ages 3 to 9) thatcovers Disney’s four parks: Magic Kingdom, Epcot,Hollywood Studios, and Animal Kingdom.

But there’s also plenty of fun in the sun in the rest ofOrlando. The Leu Botanical Gardens (leugardens.org) onthe banks of Lake Rowena feature 50 acres of tropicalbeauty, says Kristen Manieri, a contributor to Orlandomagazine. Tickets: $10 for adults, $3 for kids under 18,and free on Mondays in the summer. And instead ofDisney’s water parks, where tickets start at $60 a day, headfor Wekiwa Springs (floridastateparks.org; $6 per vehicle),16 miles from downtown Orlando. You can also go kayaking,canoeing, and snorkeling in the Wekiwa River, which is fedby a natural spring that stays at 72°F all year. At the endof a long, hot day, it’s great natural air-conditioning.

B Resort & Spa, which offers a freeshuttle bus to all the Disney parks,pampers both adults (massagesand pool bars) and kids (bunkbeds and an activity room). Spa-cious rooms that sleep four start

at $149. Use the MOUSESAVERS code and save up to 33%through September (bhotelsandresorts.com).

Adding Universal Orlando and itsWizarding World of Harry Potter tothe trip? Skip the $155 single-day,park-to-park tickets. You’ll save $20a day or more on multiday tickets.The smartest option: a three-daypass at $230 for adults and $210

for kids. Pay with your American Express card and getfree snacks, drinks, and concierge services and throughJune 30, 10% off a parkwide dining plan.

WHATTO DO

WHERETO STAY

SAVINGSTIP

Goofy and palsin the Magic

Kingdom

Universal’s CabanaBay Beach Resort

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74 m o n e y . c o m J U N E 2 0 1 6

An extra reason to love Yarmouth:A handful of its beaches offer freeparking. Gray’s Beach is particularlylovely, because of its long boardwalk andnature trails, says Christopher Setter-lund, author of the In My Footsteps travel

books. Mayflower Beach in Dennis is another family favorite,with its tidal flats teeming with aquatic life and, almost ascrucial, accessible bathrooms and picnic tables. Parkingis expensive ($25 a day), but you save $5 on weekdays.

For a whale of a time, set sail with Dolphin Fleet(whalewatch.com; adults, $47; kids, $31), New England’sfirst whale-watching company. Visit its website tocollect a $2 coupon. This is also a great year to visit theCape Cod National Seashore. You’ll get in free fromAug. 25–28 at all six beaches, thanks to the National ParkService’s centennial celebration. You can also sign up forfree ranger-led walking tours. Go to nps.gov/caco formore information.

Kids ride free (witha paying adult) onthe CapeFlyer,which offers train

Travelers have been making pilgrimages to Cape Cod since,well, the Pilgrims. New this year: lower prices. The averageroom costs 6% less than in 2015, reports travel websiteGogobot. Still, the Cape can be pricey. Look for deals nearYarmouth, with the highest concentration of rooms around.

service betweenBoston’s SouthStation andHyannis fromMemorial Dayto Labor Day onweekends (adults,$22 one way).You’ll also save$4 by bookingroundtrip tickets.

Find your perfectbeach house onWeNeedaVacation.com, a localhome-rentalagency. You canfind three-bed-room vacationproperties a quar-ter mile from thebeach for $1,100 aweek in July. If youtravel to the Capein June, you’ll savealmost 20%.

WHATTO DO

WHERETO STAY

SAVINGSTIP

B E A C HG E T A W A Y

Coast Guard Beachin Eastham, Mass.

An ice cream social,Cape Cod–style

MORE ONLINECheck out five must-have appsfor your family vacation atmoney.com/travel.

R O A DT R I P

Portland sits in anespecially sweetroad-trip spot.It’s about halfwaybetween thePacific Ocean andthe Mount Hoodfoothills, as well as45 minutes fromthe Willamettevineyards. Evensweeter: You savemoney on everyroute becauseOregon is one offive states with nosales tax. (The gastax is lower thanits neighbors’ too.)

The route: east on Routes 84 and 26from Portland, followed by scenicRoute 211 to the Willamette Valley,then west on Highway 22 to link tocoastal Highway 101 up to Seasidebefore looping back to Portland.

The stops: Start with some culture at the PortlandChildren’s Museum (tickets, $10.75; portlandcm.org),home to touchable installations and the topiary ZanyMaze. It’s about 70 miles to the Hood River, but enroute you’ll find U-pick-it farms, such as Cody Orchards(codyorchards.com), and the Columbia River Gorge.Take a break from driving on the Mount Hood Railroad(mthoodrr.com), which runs a charming two-hour ridethrough woods and vineyards. Save $15 on theroundtrip if you travel coach (adults, $30; kids, $25).

You’ll find produce of a different variety—winegrapes—in the 150-mile-long Willamette Valley. BrooksWinery (brookswines.com; tastings, $15) is especiallyfamily-friendly, notes Jennifer Rouse of Travel Oregon,with badminton and beanbag-toss games for the kids.For a beach stop, go razor clamming in Seaside. Maybethe kids will even taste what they dig up.

Save a bundle—about60% in July—by rentinga car and picking it upaway from the airportgrounds. Hop a 13-milecab to North Portlandand you can get a full-

size car from Enterprise for $276 (at presstime) for a week. Cost at the airport: $708.

Mt. Hood Rentals(mthoodrentals.com) lists familycondos for $200 anight. In the Willa-mette Valley, planan overnight atthe Vintages

Trailer Resort(the-vintages.com)near McMinnville,where outfittedAirstreams thatsleep four startat $122. In Sea-side, stay sixblocks from thePacific at the newRiver Inn, whichhas a pool ands’more-ready firepits ($99, riverinn-atseaside.com).

WHATTO DO

WHERETO STAY

SAVINGSTIP

O R E G O N

It’s no wonderMeyers Beach is afavorite backdropfor commercials.

At KiyokawaFamily Orchards

S&P 500 2.7% 2.3% 12.9%Nasdaq2 3.2 –0.9 15.6Russell 2000 3.8 –8.4 9.3Morgan Stanley EAFE 3.8 –7.2 3.6Dow Jones industrial average 2.9 3.0 10.2Barclays U.S. aggregate bond index 0.7 1.8 2.2

Health care 6.6 –1.6 16.2Energy 4.8 –14.7 –0.9Basic materials 4.0 –3.5 10.0Financials 3.6 –0.8 11.3Consumer discretionary 2.2 6.8 16.3Information technology 2.0 6.5 18.9Industrials 1.3 3.2 14.4Telecom services 0.3 14.7 5.4Consumer staples 0.0 9.5 11.4Utilities –1.5 11.2 9.6

NOTES AND SOURCES: Stock index data as of April 20, 2016, from Lipper, New York; 877-955-4773.Sector returns from Bloomberg. Bond index data from Barclays. Monthly S&P 500 ratios arefrom Standard & Poor’s. P/E ratios are based on previous four quarters of operating earnings.Biggest funds ranked by total net assets. 1Annualized. 2Price change only.

LARGE-CAP STOCKS

Fidelity Contrafund (FCNTX) 2.4% 13.4% 0.71American Funds Growth Fund of America (AGTHX) 0.1 12.8 0.65American Funds Investment Co. of America (AIVSX) 1.3 12.4 0.58Dodge & Cox Stock (DODGX) –3.0 11.3 0.52American Funds Wash. Mutual Investors (AWSHX) 2.3 11.5 0.58

INTERNATIONAL

Vanguard Total International Stock Index (VGTSX) –8.3 2.3 0.19Harbor International (HAINX) –6.7 3.0 0.75American Funds EuroPacific Growth (AEPGX) –8.1 4.5 0.83Vanguard International Growth Fund (VWILX) –6.8 5.2 0.34T. Rowe Price International Stock Fund (PRITX) –6.6 4.6 0.83

SMALL-CAP

Vanguard Small-Cap Index (VSMAX) –5.7 10.6 0.09Vanguard Explorer (VEXRX) –9.8 10.2 0.35Vanguard Small-Cap Value Index Fund (VSIAX) –3.0 11.7 0.09T. Rowe Price Small-Cap Value (PRSVX) –1.0 7.8 0.96Vanguard Small-Cap Growth Index (VSGAX) –8.8 9.3 0.09

U.S. GOVERNMENT BONDS

Fidelity Government Income (FGOVX) 1.4 1.8 0.45American Funds U.S. Government Securities (AMUSX) 1.7 1.7 0.65MFS Government Securities (MFGSX) 1.1 1.3 0.88Sit U.S. Government Securities (SNGVX) 1.6 0.8 0.80J.P. Morgan Government Bond (OGGAX) 1.2 1.3 0.75

MIDCAP

Fidelity Low-Priced Stock (FLPSX) –2.8 10.2 0.79Vanguard Mid-Cap Index (VIMAX) –3.7 11.9 0.09Vanguard Extended Market Index (VEXAX) –7.5 10.1 0.10Fidelity Spartan Extended Market Index (FSEVX) –7.5 10.1 0.07Vanguard Strategic Equity Fund (VSEQX) –5.0 13.5 0.21

EMERGING MARKETS

American Funds New World (NEWFX) –8.2 0.7 1.04T. Rowe Price Emerging Markets Stock (PRMSX) –12.0 –1.5 1.24Vanguard Emerging Markets Stock Index (VEMAX) –15.9 –3.1 0.15Fidelity Emerging Markets (FEMKX) –10.2 –0.7 1.05Russell Emerging Markets (REMSX) –16.1 –4.1 1.51

BALANCED

American Funds American Balanced (ABALX) 3.1 9.2 0.58Fidelity Balanced (FBALX) –1.1 9.0 0.56Fidelity Puritan Fund (FPURX) –1.0 9.2 0.56Vanguard Star Fund (VGSTX) –1.5 7.4 0.34Vanguard Balanced Index Fund (VBIAX) 1.1 8.4 0.09

INVESTMENT-GRADE

Vanguard Total Bond Market Index (VBTLX) 1.6 2.2 0.07Vanguard Total Bond Market II Index (VTBIX) 1.5 2.1 0.10Dodge & Cox Income (DODIX) 0.8 2.5 0.44Vanguard Short-Term Investment-Grade (VFSUX) 1.6 1.8 0.10T. Rowe Price New Income (PRCIX) 1.0 1.8 0.59

TAX-EXEMPT

Vanguard Intermediate-Term Tax-Exempt (VWIUX) 4.3 3.3 0.12Fidelity Municipal Money Market (FTEXX) 0.0 0.0 0.40Vanguard Limited-Term Tax-Exempt (VMLUX) 2.0 1.4 0.12Vanguard Tax-Exempt Money Market (VMSXX) 0.0 0.0 0.15Schwab Municipal Money Fund (SWXXX) 0.0 0.0 0.62

HIGH YIELD

Vanguard High-Yield Corporate (VWEAX) 0.3 3.3 0.13American Funds American High-Income Trust (AHITX) –5.1 0.6 0.67Fidelity Capital & Income (FAGIX) –3.6 4.3 0.72Northern High Yield Fixed Income (NHFIX) –3.9 1.6 0.81Fidelity High Income (SPHIX) –3.2 1.6 0.72

CATEGORY

BIGGEST MUTUAL FUNDS BY CATEGORY TOTAL RETURN EXPENSES(AS % OFASSETS)ONE

YEARTHREEYEARS1

TOTAL RETURN

ONEYEAR

BENCHMARKSTHREEYEARS1

ONEMONTH

S&P 500 RATIOS

INDEX

SECTOR

DIVIDEND YIELDP/E

STOCKS& FUNDS

76 m o n e y . c o m J U N E 2 0 1 6

T H E N U M B E R S

Oil Keeps FuelingRally in EquitiesTHE REBOUND in crude oil that began in February continuedin the four weeks ended April 20, allaying fears over theeconomy. That helped push the S&P 500 up 2.7%, withenergy and materials stocks up even more. But the S&P’sprice/earnings ratio is now at its highest level in a year.

ONE-YEAR

RANGE

2.5%

2.4

2.3

2.2

2.1

2.0

21.0

20.0

19.0

18.0

17.0

20.5

CURRENT

ONE-YEAR

RANGE

2.14CURRENT

J U N E 2 0 1 6 m o n e y . c o m 77

MONEY 50

T H E N U M B E R S

BUILDING-BLOCK FUNDSLarge-Cap

Schwab S&P 500 Index (SWPPX) 2.7% 2.2% 12.8% 0.09 435-4000Schwab Total Stock Market Index (SWTSX) 2.9 0.3 12.3 0.09 435-4000

Midcap/Small-CapiShares Core S&P Mid-Cap (IJH) 3.4 –1.8 11.2 0.12 474-2737iShares Core S&P Small Cap (IJR) 3.3 –1.6 12.5 0.12 474-2737

ForeignFidelity Spartan International (FSIIX) 3.9 –7.0 3.5 0.20 544-8544Vanguard Total Intl. Stock (VGTSX) 3.7 –8.3 2.3 0.19 662-7447Vanguard FTSE A/W ex-U.S. Small (VFSVX) 3.0 –4.2 4.1 0.37 662-7447Vanguard Emerging Markets (VEIEX) 2.9 –16.1 –3.3 0.33 662-7447

SpecialtyVanguard REIT Index Investor (VGSIX) 0.4 5.1 7.9 0.26 662-7447

FUND (TICKER)

EXPENSES(AS % OFASSETS)

PHONENUMBER

(800)THREEYEARS1

ONEYEAR

ONEMONTH

TOTAL RETURN

Global FundsBounce BackAS THE DOLLAR HAS WEAKENED LATELY, FOREIGNFUNDS IN THE MONEY 50 HAVE REBOUNDED.

THE ONE-TWO PUNCH of slowing growth and a strengtheningU.S. dollar in recent years has hurt the performance offoreign funds held by American investors. But renewedhope about the global economy—evidenced by risingcrude oil and commodity prices—and the slide inthe value of the greenback has suddenly turned the tide.

Among stock funds in our recommended list,PowerShares International Dividend Achievers wasthe big winner, soaring 5.8% in the four weeks endedApril 20. Vanguard International Growth rose 4.3%,thanks to its big stakes in European and emerging-marketequities. Many companies based in the developing worldare reliant on commodity production and have been bigbeneficiaries of rising prices for natural resources.

Building-block funds: For broad exposure to core asset classesCustom funds: Specialized investments that can tilt your strategyOne-decision funds: If you want stocks and bonds in one portfolio

HOW TO USE OUR RECOMMENDED LIST

NOTES: As of April 20, 2016. N.A.: Not available. Load funds are included for thosewho prefer to use a broker. 1Annualized. 2Phone numbers are 866. 34.25% sales load.SOURCES: Lipper, New York, 877-955-4773; the fund companies

TOTAL RETURN

FUND (TICKER)

EXPENSES(AS % OFASSETS)

PHONENUMBER

(800)THREEYEARS1

ONEMONTH

ONEYEAR

BondVanguard Total Bond Market (VBMFX) 0.8% 1.6% 2.1% 0.16 662-7447Vanguard Short-Term Bond (VBISX) 0.4 1.3 1.1 0.20 662-7447Vanguard Inflation-Protected (VIPSX) 0.5 –0.5 –1.2 0.20 662-7447Vanguard Short-Term Infl.-Prot. (VTIP) 0.1 0.3 –0.4 0.08 662-7447Vanguard Total Intl. Bond Index (VTIBX) 0.5 2.3 N.A. 0.17 662-7447

CUSTOM FUNDSLarge-Cap

Dodge & Cox Stock (DODGX) 3.5 –3.0 11.3 0.52 621-3979PowerShares FTSE RAFI U.S. 1000 (PRF) 3.1 0.2 11.6 0.39 843-2639Sound Shore (SSHFX) 3.2 –3.8 11.8 0.92 551-1980PowerShares S&P High Quality Port. (SPHQ) 2.7 8.6 15.0 0.29 983-0903Primecap Odyssey Growth (POGRX) 3.4 –0.3 12.7 0.64 729-2307T. Rowe Price Blue Chip Growth (TRBCX) 3.6 0.3 16.0 0.72 638-5660

MidcapAriel Appreciation (CAAPX) 3.2 –8.1 10.5 1.12 292-7435WisdomTree MidCap Dividend (DON) 2.5 4.0 13.5 0.38 909-94732

T. Rowe Price Div. Mid Cap Gro. (PRDMX) 3.5 –3.9 12.7 0.89 638-5660Small-Cap

Royce Opportunity (RYPNX) 3.9 –11.1 6.7 1.15 221-4268Vanguard Small-Cap Value (VBR) 3.2 –3.0 11.7 0.09 662-7447WisdomTree SmallCap Dividend (DES) 3.4 0.5 11.4 0.38 909-94732

Wasatch Small Cap Growth (WAAEX) 4.5 –9.9 7.8 1.22 551-1700Specialty

PowerShares Intl. Div. Achievers (PID) 5.8 –14.8 –0.3 0.55 983-0903SPDR S&P Dividend (SDY) 2.5 10.0 12.7 0.35 787-22572

Cohen & Steers Realty Shares (CSRSX) 0.4 5.3 8.7 0.97 437-9912SPDR Dow Jones Intl. Real Estate (RWX) 2.5 –1.8 1.7 0.59 787-22572

iShares N. American Nat. Resources (IGE) 6.4 –17.0 –2.6 0.47 474-2737Foreign

Oakmark International (OAKIX) 3.0 –10.8 3.7 0.95 625-6275Vanguard International Growth (VWIGX) 4.3 –7.0 5.1 0.47 662-7447T. Rowe Price Emerging Markets (PRMSX) 2.5 –12.0 –1.5 1.24 638-5660

BondDodge & Cox Income (DODIX) 1.5 0.8 2.5 0.44 621-3979Fidelity Total Bond (FTBFX) 1.2 1.0 2.3 0.45 544-8544Vanguard Short-Term Inv. Grade (VFSTX) 0.7 1.5 1.7 0.20 662-7447iShares iBoxx $ Inv. Grade Corp. Bond (LQD) 1.8 1.1 2.9 0.15 474-2737Loomis Sayles Bond (LSBRX) 2.4 –2.7 1.3 0.89 633-3330Fidelity High Income (SPHIX) 2.9 –3.2 1.6 0.72 544-8544Vanguard Intm.-Term Tax-Ex. (VWITX) 1.2 4.3 3.2 0.20 662-7447Vanguard Limited-Term Tax-Ex. (VMLTX) 0.5 1.9 1.3 0.20 662-7447Templeton Global Bond (TPINX)3 1.7 –4.5 –0.8 0.89 632-2301Fidelity New Markets Income (FNMIX) 2.4 3.6 1.7 0.86 544-8544

ONE-DECISION FUNDSBalanced

Fidelity Balanced (FBALX) 2.4 –1.1 9.0 0.56 544-8544Fidelity Global Balanced (FGBLX) 2.8 –0.3 4.7 1.02 544-8544Vanguard Wellington (VWELX) 2.6 1.9 8.5 0.26 662-7447

Target DateT. Rowe Price Retirement series (STOCK/BOND ALLOCATION) Example: 2005 Fund (45%/55%) (TRRFX) 1.7 0.1 4.7 0.58 638-5660 Example: 2020 Fund (68%/32%) (TRRBX) 2.2 –1.1 7.0 0.66 638-5660Vanguard Target Retirement series Example: 2025 Fund (70%/30%) (VTTVX) 2.3 –1.2 7.2 0.15 662-7447 Example: 2035 Fund (84%/16%) (VTTHX) 2.8 –2.0 8.1 0.15 662-7447

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ES80 m o n e y . c o m J U N E 2 0 1 6 Illustration by javi e r p é r ez es t re lla

MONEYWELL SPENT Do you have a purchase you consider Money Well Spent?

Email us about it and what it means to you at wellspent@moneymail.com.

LAST AUGUST I WENT to Lowe’s andspent $693—money I was urgednot to spend. The advisory camefrom my father. He never likes tobe fussed over, especially if thefussing involves unnecessary ex-pense. And his attitude hadn’tchanged even though he had justbeen diagnosed with leukemia.

But my father’s health crisisleft me feeling shattered—andhelpless. So I bolstered myself bytrying to control as much of thesituation as I could. When I foundmedical studies showing that air-borne mold spores can be fatal toa patient whose immune systemhas been compromised, I headed to Lowe’s and loadeda cart with a powerful air conditioner (to replace anold, moldy one), two HEPA air filters (to catch ultrafineparticles in the air), cleaning supplies, and more. Beforethe receipt could top $700, my boyfriend stepped in andput the second $220 HEPA filter on his credit card.

I knew that if my dad were there, he’d be grimacing.Watching the cash register tick up and up, I could feelmyself grimacing, too, at the bite the bill was taking outof my modest, 30-year-old journalist’s salary.

But as anyone who has been there can tell you, theprospect of a loved one’s death can drive you crazy.Maybe you should quit your job—if something terriblehappened and you weren’t there, you’d never forgiveyourself. All you can see are the holes your loved one’sabsence would leave in your life.

My father’s doctor had warned me about the slip-

pery slope of this mind-set. Hepointed out that scrambling toprotect against every contingen-cy could be harmful in its ownright and that studies on air fil-ters’ effectiveness in particularwere “inconclusive.” Dad wouldbe fine if he simply wore a maskoutdoors, he said.

But this wasn’t the doctor’s fa-ther. He was mine. He was the onewho had cared for me, educatedme, and bailed me out of troublea thousand times. He may havebeen careful with spending onhimself, but he was quick to lendme money and time whenever I

needed either. Now it was my turn to sacrifice for him,even if my efforts were a drop in the parental bucket.

When I arrived home with my Lowe’s haul, Dad wasskeptical, to say the least. Didn’t the doctor say thoseHEPA filters were unnecessary?

So I did what any daughter of a mensch would do: Itold him how much I spent. Then I told him I wouldn’tbe returning a thing.

He gave me a hug. Thank you, he said, holding me tight.You can’t buy certainty, no matter how much you

spend—or how hard you love. But you have to say yeswhen you get the chance, however improbable, to renta little peace of mind. For me, that feeling of hope camecheap at $693.

y resh- ir undby Susie Poppick

Former MONEY writer and special projects editor Susie Poppicknow covers personal finance for CNBC.com.

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