What are the best funds for retirement?
We’d all like to find the next great outperforming fund to power our retirement savings. But that’s a game that’s hard to win. Over the past 10 years, only one in four U.S. stock funds has beaten the S&P 500. And if you go out more than 10 years, the numbers drop further still. Indeed, of all the 847 U.S. stock funds that have been around for nine years, only one has outearned the S&P in each of those years. That’s why we’d make the foundation of any retirement portfolio a fund that virtually matches the market’s return: an S&P 500 index fund, such as the Vanguard 500 Index (www.vanguard.com; 800-851-4999). For a long-term investor, as we’ve often said, index funds have a built-in advantage: The expenses incurred in running them are modest and their trading costs and taxable distributions are minimal. In addition, they are by definition broadly diversified. You can even build an entire portfolio of index funds. If you already own an S&P 500 fund, you can capture the rest of the U.S. st
