MONEY First-Time Dad

The One Benefit All Millennials Should Consider Before Accepting a Job

Father and son sharing a meal.

Whether or not kids are on your radar right now, you'd be wise to understand any potential employer's family leave policy, says first-time dad Taylor Tepper.

Just a few weeks after our son was born, my wife was already dreading the prospect of returning to work.

A teacher, Mrs. Tepper received around two months of paid leave from her employer. Her original plan had been to extend that leave for another four weeks unpaid, then return to the classroom for the last couple of months of the school year. But that was before Luke came along.

When he arrived, she couldn’t bear leaving him so soon. Thankfully, her school allowed her to stay a home those extra few months and held her position for the following year. Mrs. Tepper could then nurture our son without fearing for her job.

Most families don’t have this choice.

When Mrs. Tepper accepted her position, neither she nor I considered how much time she would be given if she became pregnant. We weren’t planning on starting a family (best laid plans), and so were more concerned with wages. While we were fortunate to land in companies that support families—I happened to receive two weeks of paid paternity leave—we could have just as easily ended up working for ones that didn’t.

Just 12% of businesses offer paid maternity or paternity leave, according to the Society for Human Resource Management. Another study found that the average maternity leave among U.S. companies that offer it is less than one month and pays the worker 31% of her original salary, as MONEY’s Kara Brandeisky recently noted. Comparatively, mothers in France are guaranteed 16 weeks of fully paid leave.

Millennials may not be overly concerned with President Obama’s recent announcement that he will extend six weeks of paid parental leave to federal workers, but they should be. Let me tell you why…

Why You Should Care

It’s understandable if those who graduated into the Great Recession with a ton of debt care more about salary than anything else, especially considering that this generation has generally been postponing bourgeois life events like marriage and procreation. But with the top end of Gen Y approaching 35 this year, more will likely start building families soon. And if you stay at your job a few years in this crucial span of settling-down time, who knows? You could be making babies.

Heck, some of them—ahem, Luke—arrive unexpectedly.

As Mrs. Tepper and I realized, the option of paid parental leave takes on a lot more importance when you are responsible for the care of an infant.

Without paid leave, you end up with two not-so-great options after giving birth. One: Squirrel up all your vacation time to use and then go back to work when your kid is a mere three or four weeks old. Or two: Add on unpaid time (most Americans, moms and dads alike, are guaranteed 12 weeks through the Family Medical Leave Act) and find other means (savings? credit cards? spouse’s income and living lean?) to replace the income lost that you need to pay the bills.

While taking unpaid time has some big financial implications for you, going back to work too soon has serious drawbacks too. “That initial time to bond with your child, you don’t get that back,” says St. Pete mayor Rick Kriseman, who recently expanded paid leave to city employees. Plus, he notes, “In those first few weeks, you are so sleep deprived. How do you function at work? Do your job normally? Give it your attention and not make mistakes? That’s asking a lot of new parents.”

Paid leave helps families avoid this kind of tough decision. It also has other benefits, illuminated here by the Center for American Progress. For instance, one study by two Cornell University professors demonstrates that paid maternity leave is an important factor in keeping women in the labor market “since it reduces the likelihood that women will quit their jobs in order to take time off from from work.”

Working parents also tend to be happier, more productive, and more loyal at companies that have paid leave policies. Also, paid leave is also associated with better health results for both mothers and newborns—reducing depressive symptoms in moms, increasing the odds that children are immunized, and making it more likely that moms are better able to breastfeed their child for an extended period of time.

What You Should Do

Figuring out a company’s leave policy isn’t always easy. Ask the hiring manager and you risk looking like you’re one foot out the door before you’re one foot in.

Lenny Sanicola, senior practice leader at HR association WorldatWork, says it’s not wrong to pose the question, “but wait until at least the second interview.”

Other options if you’re not comfortable with the straightforward route: Go to the careers section of the company’s website to see if its leave policy is detailed there, suggests Sara Sutton Fell, chief executive of FlexJobs. Check out the company’s review on sites like (but keep in mind that what people post there is not necessarily gospel). Better yet, try to find someone in your network on LinkedIn who already works at the company and can do some detective work for you.

As for what’s a generous leave policy, obviously the more paid time you can spend with your kid, the better. But the range varies.

“Because paid leave isn’t required by law in the U.S., any amount offered by an employer is generally a good thing because the bar is so low,” says Fell. “In general the most common range for paid maternity or paternity leave that I’ve heard is anywhere from one week to 16.” Sanicola says six to eight weeks is likely.

Google, the search behemoth with a market capitalization of $350 billion, offers expecting moms a European-like 22 weeks of paid leave; that’s pretty sweet.

Dads are lucky to get any paid time leave at all.

As much as Mrs. Tepper and I like our jobs, chances are we won’t be in them forever. And Luke likely won’t be an only child forever.

That means when it comes time to take on a new challenge, how our new bosses treat expecting and new parents will carry as much weight as the biweekly paycheck. While it might be hard for young childless professionals to appreciate that mindset, they’d be well advised to do so.

More From the First-Time Dad:

MONEY Economy

Swiss Currency Has Shot Up 15% So Far Today. Here’s Why That Matters

A Swiss coin is seen beneath a euro banknote on Januay 15, 2015 in Lausanne. In a shock announcement on January 15, Switzerland's central bank said it was ending a three-year bid to artificially hold down the value of the Swiss franc against the euro, in a move that immediately sent the safe haven currency soaring. Fabrice Coffrini—AFP/Getty Images

Chaos in the currency market is a sign of deep problems for Europe—and the whole global economy.

The global economy got a lot more interesting today, and maybe a little more scary, when the Swiss National Bank ended its commitment to a fixed exchange rate between the Swiss Franc and the euro.

Currency markets went into a frenzy. The Swiss franc immediately rose 30% in value against the euro, mirrored by a spike in its U.S. dollar value. Some of those gains have pulled back, with the currency up about 15% at midday. That’s still a huge move.

Okay, so it’s been a big day for currency traders—and anyone planning on a ski trip to the Alps. But what’s this mean for me?

The wildness in the market underscores the big economic story of the moment: Europe’s slide toward a recession. In a globally connected economy, weak demand in Europe could weigh on the recovery in the U.S.

So what exactly happened?

Swiss francs rose because the Swiss central bank removed an artificial cap on the price of an asset people really, really want right now. The import of the story is less about the sudden price change today than about why people want to trade their euros for francs in the first place.

Switzerland isn’t a part of the eurozone, the group of countries that share the euro as a currency. Swiss assets denominated in Swiss francs have long been considered a safe haven—a parking spot for investors around the globe when they are feeling jittery.

The eurozone has given people a lot be jittery about. In the wake of the Greek debt crisis at the beginning of the decade, investors jumped into francs, strengthening the currency against others. The problem with that for the Swiss is that it makes the goods produced by Swiss companies more expensive to export. So the Swiss National Bank (that’s like their Federal Reserve) capped the value of a franc at 1.20 per euro.

It also decided to start charging negative interest rates, meaning investors in effect have to pay a fee to park their money in a Swiss bank. That’s another way of fighting currency overvaluation. Today, at the same time as it cut the currency peg, the Swiss bank lowered the short-term interest rate from -0.25% to -0.75%. That is, they raised the penalty for stashing money there. Even so, the rally in francs shows there remains a lot of demand for doing just that.

Why did the Swiss cut the exchange rate peg?

The surprise move comes as Mario Draghi, president of the European Central Bank, is considering new measures to stimulate the eurozone economy. Many investors expect the ECB will take a page from the U.S. Federal Reserve and start buying long-term debt to push down long-term interest rates, a strategy known as quantitative easing.

A euro QE is broadly expected to bring down the value of the euro compared to the U.S. dollar. The Swiss, it seems, didn’t want to tie the value of its own currency so closely to the policy makers at the ECB.

“Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced,” the Swiss central bank said in a statement. “The euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar. In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified.”

Pity Swiss watchmakers, though. Their timepieces just became more expensive for foreigners to buy.


Why Is Employment Picking Up? Thank Government

public construction workers
Reza Estakhrian—Getty Images

After hurting the employment picture for so long, local, state and federal governments are finally adding to payrolls.

The U.S. economy continued its winning streak by adding 252,000 jobs in December, the 11th consecutive month employers hired more than 200,000 workers. The unemployment rate fell to 5.6%, a post-recession low, as various sectors (from business services to health care to construction) added to payrolls.

Boosting hiring isn’t exactly new when it comes to private businesses, which have been bolstering their staffing for every month for almost five years.

What’s different about the recent pickup in employment is the positive effect of governments (state, local and federal). While jobs aren’t being added at rapid pace, they have grown steadily over the past year, and are no longer subtracting from the labor market like they were not too long ago.

Government employment increased by 12,000 in December, compared to a reduction of 2,000 employees in the last month of 2013. Compared to a year ago, state and local governments throughout the country have added a combined 108,000 jobs.

As recently as last January the government shed 22,000 positions. Sustained, incremental growth beats much of the sector’s post-recession record, which saw employment drop off thanks to lower tax revenue and austerity measures.

Government payrolls increased by about 0.5% over the last year — which doesn’t look terribly good compared to the private sector’s 2.1% gain. But when you look at the recent gains against the 0.05% decrease in the twelve months before January 2014, you start to appreciate the recent uptick.

Gov't jobs

What’s going on?

Well, state and local government finances have stabilized and marginally improved over the past couple of years, giving statehouses and municipalities a chance to improve its fiscal situation.

Take this note from a recent National Association of State Budget Officers report which says, “In contrast to the period immediately following the Great Recession, consistent year-over-year growth has helped states steadily increase spending, reduce taxes and fees, close budget gaps and minimize mid-year budget cuts.”

The nation’s economy grew at an annualized 5% rate in the third quarter, after jumping 4.6% in the three months before. The trade deficit fell in November to an 11-month low, thanks in part to lower energy costs, which will help fourth quarter growth.

NASBO expects states’s revenues to increase by 3.1% in the next fiscal year, compared to an estimated 1.3% gain in 2014, with much of that spending dedicated to education and Medicaid.

With a more solid financial position, governments across the country are able to spend more on basic items, like construction. Public construction, for instance, increased by 3.2% last November compared to the same time last year, according to the Census Bureau.

Overall government spending has stopped following dramatically and actually picked up in the third quarter on a year-over-year basis.


Of course, government employment still has a ways to go before returning to normal. In the five years after the dot-com inspired recession, public sector employment gained by 4.5%. (It’s fallen by 2.8% since the recession ended in June 2009.) And while state budgets have normalized, Governors aren’t exactly flush with cash.

Says NASBO: “More and more states are moving beyond recession induced declines, but spending growth is below average in fiscal 2015, as it has been throughout the economic recovery.”

Not to mention hourly earnings fell by five cents, to $24.57, a decline of 0.2%.

Still, some employment growth is better than none at all.

Updated with earnings data.


Apple, Amazon, or Google: Who Will Win the Battle of the Tech Titans?

Illustration of tech robots
Harry Campbell

The Big Three tech giants each want to be the hub of your digital life. Before you invest, learn their strategies, and see which company’s vision is most likely to prevail.

The blueprint for success in technology used to be straightforward: Develop a cutting-edge product people need; build a (near) monopoly; then reap the rewards of controlling that technology—be it the software or chips that make computers run or the switches that make the Internet possible. That was how Microsoft, Intel, and Cisco Systems ruled the ’90s.

Fifteen years after the first great tech stock boom ended, the industry’s new colossal trio of Apple, Google, and Amazon couldn’t be more different from their ancestors.

They’ve created vast arrays of products, from mobile devices to streaming services to payment systems, which they tie together in various ways to support their core revenue stream. Think not of solitary giants, but of giant ecosystems. And those systems, not the latest iPhone or Google Glass or Kindle, are “the defining characteristic of the company,” says Robert Stimpson, co-manager of the White Oak Select Growth Fund.

That means evaluating the strength of those ecosystems is what a tech stock investor has to do. To help, MONEY consulted some of the smartest analysts in the business for guidance and took a hard look at the valuations investors are placing on those systems today.

Apple: Elegant Hardware and Cash to Spare

The heart of the ecosystem: More than 90% of Apple’s $183 billion in revenue in its latest fiscal year came from hardware sales—56% from iPhone sales alone.

Fuel for growth: Hardware is what Apple sells, but it’s not what the company markets. “Apple’s main product is an experience,” says tech analyst Neil Cybart. “They look at all of their products as taking away the complicated part of technology so the users can feel like they have more control over their lives.”

Apple aims to build a world in which you’ll own Beats by Dr. Dre headphones, wear an Apple Watch, buy coffee with the Apple Pay payments system, and make hands-free phone calls via Apple CarPlay. With all those products interlinked and running on Apple’s iOS software, you’ll rely on the ecosystem for daily tasks, making it a hassle for you to buy your next phone or tablet from anyone other than Apple.

Potential threats: Apple has a hit with the iPhone 6 and 6 Plus, selling an estimated 60 million of the phones last year. Indeed, as TIME recently reported, the iPhone 6’s success has cut into Android’s smartphone market share in the U.S. for the first time since September 2013.

But the company isn’t particularly good at ­enticing the owner of one Apple product to purchase another, says Consumer Intelligence Research Partners’ ­Michael Levin.

For instance, only 28% of iPhone owners have an Apple computer, and less than half of them own a tablet, says CIRP. Sales for the iPad have fallen 4% over the past year, acknowledges Apple. But CEO Tim Cook, noting that the company has sold 237 million iPads over four years, told investors in October that he’s “very bullish on where we can take the iPad over time.”

Outlook: BUY

Apple enjoyed a banner year in 2014. Spurred by sales of the latest iterations of the iPhone and anticipation of the Apple Watch’s release in March, the company’s stock rose 40%.

Despite that gain, Apple’s price/earnings ratio, based on projected profits, is just 13.8. That means the stock trades at a 16% discount to the S&P 500 technology index, even though the company’s earnings are growing 33% faster than the average big tech stock’s.

Apple’s low valuation stems from factors such as investors’ doubts that a company its size can grow as fast as smaller tech firms, along with uncertainty that Apple will keep making products that are both popular and profitable.

That said, Apple is still the best company by far at creating exciting technology that people want to buy. Plus, signs point to an ever-increasing dividend from the stock, which now yields 1.8%; a larger payout can be easily covered by Apple’s $155 billion cash reserves. Sales Grow, but Earnings Are Scarce

The heart of the ecosystem: Already the world’s biggest online retailer, racking up $85 billion in annual sales, Amazon aims to catch up to the world champion, Wal-Mart, which has just under half a trillion in revenue.

To close that gap, Amazon wants to convert more customers to Amazon Prime, the two-day shipping service now priced at $99 per year. Amazon Prime members make twice as many purchases as nonmembers, and they spend 40% more per transaction, reports ComScore. Prime customers are also loyal: 92% say they’ll renew their subscriptions.

Fuel for growth: To get more people to join Amazon Prime—and buy more goods per year—Amazon has morphed into a streaming-media and mobile-device company.

In 2011 the e-tailer began offering Prime members access to instant streaming movies and television shows; the retailer now produces its own TV programs as well. To ­sweeten Prime, Amazon recently added a streaming-music service and free online photo backups. Plus, when the company launched its Fire smart­phone last year, a one-year Prime membership came bundled free with the device.

The result: There are now an estimated 30 million Prime members, up from around 5 million in 2011.

Potential threats: Amazon has spent heavily on the entertainment it’s using to lure new Prime sign-ups. The company has posted cumulative losses of more than $350 million over the past 10 quarters—vs. the $94 billion in profits Apple churned out. Amazon CEO Jeff Bezos is unapologetic; last year, he reprinted a 1997 letter to shareholders saying that “long-term market leadership” was more important than “short-term profitability.”

One hit to profitability has been the Fire phone. While 10 million iPhone 6’s were purchased the first weekend they went on sale, Amazon reportedly sold only 35,000 of its smart­phones in the first month. Late last year the company took a $170 million charge stemming from the fiasco.

Amazon is learning a hard lesson. It may be a hot retail brand—but not when it comes to cutting-edge technology. “There are people who say, ‘I’m an Apple guy,’ ” says Kevin Landis, a longtime tech investor who runs the Firsthand Technology Opportunities Fund. “I haven’t heard anyone say, ‘I’m an Amazon guy.’ ”

Outlook: SELL

Despite losing a quarter of their value last year, Amazon shares still trade at a whopping P/E of nearly 100, owing to the fact that the company is barely profitable. And even if Amazon cuts costs, problems are likely to persist.

While traditional technology companies enjoy big profit margins, retailers like Amazon don’t, notes Christopher Baggini, a portfolio manager at Turner Investments. Amazon’s operating profit margin has historically been in the low single digits, compared with 20% to 30% for Apple and Google. That means even if Amazon stops spending on losers like the Fire phone, it won’t have Apple and Google’s resources to keep building out its ecosystem.

Google: Helped and Hindered by an Open System

The heart of the ecosystem: Given Google’s driverless cars, ­Internet-connected glasses, and smartphone-linked Nest thermostat, you might think this company was all about the future.

Actually, a lot of what Google is working on is meant to reinforce the past: the company’s roots as a search engine reaping ad dollars based on what people look for online. Advertising still generates about 80% of the company’s $64 billion in annual revenues.

Fuel for growth: The Android operating system, which Google launched in 2007, is essential for protecting its search franchise.

Well before the rise of smart­phones, Google management foresaw that the biggest threat to its business wouldn’t be a rival search engine, says Connor Browne, manager of the Thornburg Value Fund. Rather, he says, the company saw that danger lay in adoption of new hardware: As people shifted from PCs to mobile devices, manufacturers could conceivably eliminate Google’s technology from their products.

Android was the company’s defense against gatekeepers like Apple. While Google doesn’t make much money off the software, An­droid puts the company’s search technology at the fingertips—or voice control—of more than 1 billion people.

For further revenue growth, Google may have to rely on rival Apple’s stronger talents for setting technology trends. Just as Apple’s marketing efforts for the iPhone and iPad created whole new markets for smartphones and tablets, the Apple Watch, scheduled for release in March, could bring wearable devices into the mainstream. Android-based watches came on the market last year, but Apple’s introduction could spark sales industrywide.

The situation is similar for Goo­gle Wallet, the electronic-payment platform that has found less traction in its first three years than Apple Pay did in its first three months. “Google will benefit from Apple making headway in creating a walletless society,” says White Oak’s Stimpson, whose fund owns Google shares.

E-payments are actually more central to Google’s core ad business than to Apple’s success. If you’re watching a video on Google-owned YouTube, for example, companies can run messages tailored to your interests. It would be a natural step—and also seamless—for you to buy an advertised item via Google Wallet.

Potential threats: Start with Android itself. Unlike Apple’s iOS operating system, Android is open source, meaning that Google’s “partners” can tweak it. When Amazon built its Android-based Fire phone last year, it stripped out Gmail and Google Play Store. Fire phones and Kindle tablets link instead to the Amazon Appstore, which competes with Google Play and iTunes.

Similarly, Google can’t dictate which version of Android hardware makers employ. Google Wallet’s convenient “tap and pay” function, for example, requires versions of the operating system that are installed on only 34% of Android phones.

Google also faces threats from other major players. The Chinese e-commerce giant Alibaba, for one, has developed its own smartphone operating system, which could cut into Android’s 80% share of mobile devices in China.

Google executive chairman Eric Schmidt acknowledges the company faces threats known and unknown. “Someone, somewhere in a garage is gunning for us,” he said in an October speech. “I know, because not long ago we were in that garage.”

Outlook: HOLD

As Google’s earnings growth rate has declined, so too has its P/E ratio—from around 25 last year to 18. That means Google stock is 25% cheaper than the average for Internet companies in the S&P 500, even though it’s traditionally been on par.

Paul Meeks, a portfolio manager at Saturna Capital, which owns the stock, notes that there may be more rockiness ahead, as Google keeps reporting lower ad prices. Once that stabilizes, he says, the stock should start to rebound, just as you’d expect any sound ecosystem to recover from a minor disturbance.

In both cases, though, the healing takes time.

See all of the 2015 Investor’s Guide


MONEY Economy

Why Your Paycheck May Not Grow With the Economy

500lb weight on top of money
Kiyoshi Togashi—Alamy

Though the job market is improving, workers might have to wait a while longer to see those big raises they've been waiting for.

You may have heard that the U.S. economy is back. The nation’s gross domestic product grew by 4.6% and 5% in the last two quarters—the strongest increase since 2003; Americans are more confident about the economy than at any time since the recession; and gasoline prices are as low as they’ve been in more than five years, amounting to a huge tax break for consumers and businesses.

No wonder employers felt strong enough to add 321,000 jobs to the economy in November, while the unemployment rate was at a post-recession low of 5.8%.

Still, many workers have not seen a pick-up in pay even as the employment climate has improved. In fact private sector wages declined by 5 cents (or by 0.2%) in December, despite the economy adding 252,000 jobs.

Total compensation, which includes benefits like medical insurance, rose 2.1% from the same period a year ago. That’s actually a slight uptick from the post-recession norm, but well below pre-2008 levels.

Which is weird. As demand for workers improves, and the unemployment rate declines, you’d expect inflation to rise and wages to increase.

One reason why wages have grown so slowly is that for much of the recovery there’s simply been a lack of demand for goods from consumers as many Americans worked to get out from the terrible effects of the housing crisis.

Since my spending is your income, more dollars saved and fewer spent mean less economic activity resulting in a weaker labor market. And since the Federal Reserve already dropped short-term interest rates to practically zero, and Washington lawmakers are reluctant or disinterested in further fiscal stimulus, marginal relief is coming from D.C.

Another explanation might have to do with the nature of compensation.

In a recent report, the Federal Reserve Bank of San Francisco highlighted the notion of “sticky” wages.

The argument goes: Since businesses were unable to reduce wages as much as they wanted when the economy got really bad five years ago (short of firing people), they are now not inclined to raise salaries as the economy lifts off.

If wages are rigid against a terrible economy, they’re stagnant (at least for a while) when the tide turns. “Businesses hold back wage increases and wait for inflation and productivity growth to bring wages closer to their desired levels,” says the report authors’s Mary Daly and Bart Hobijn. “Since it takes some time to fully exhaust the pool of wage cuts, growth remains low even as the economy expands and the unemployment rate declines.”

While there’s a bit of rigidity to all wages, the authors found “industries with the most downwardly rigid wage structures before the recession have seen the slowest growth during the recovery.” This means that businesses that were able to lower pay when revenues dried up have been more likely to increase wages as the good times returned.

So people in the wholesale trade business (truck drivers to sales reps) saw wages increase relative to pre-recession levels, while those in construction have to make due on less income.

What does this mean for workers?

“The rigidity of wages in a number of sectors has shaped the dynamics of unemployment and wage growth and is likely to do so until labor markets have fully returned to normal,” per Daly and Hobijn. And with still elevated levels of the long-term unemployed, high numbers of workers in part-time positions that want full-time ones, and fewer people quitting their jobs than before the recession, we’re still in not normal labor market territory.

Investors, especially older ones with larger holdings in fixed-income, should take note, too. Without higher inflation, and especially wage growth, the Federal Reserve is likely to delay raising rates.

While recent Fed meetings minutes have been interpreted as having a more hawkish tone, rates aren’t likely to rise (or rise quickly) while workers still struggle to make up lost ground.

Updated to reflect on Jan. 9 jobs report.

MONEY mutual funds

How MONEY Selected the 50 Best Mutual Funds and ETFs

The making of the MONEY 50, our list of the world’s 50 best mutual and exchange-traded funds

The Criteria

To create the MONEY 50 list of the best mutual funds and ETFs, MONEY editors look for solid long-term performers with these important traits:

Low fees. Below average expense ratios are a good predictor of better-than-average performance. Expenses averaged 0.94% for actively managed MONEY 50 funds, compared to 1.33% for stock funds in general.

Long tenure. Good returns don’t mean much if the manager responsible for them is no longer around. The average tenure for a MONEY 50 manager is 12.4 years, compared to 5.5 years for funds in general.

Strong stewardship. You want fund managers who put shareholders first. Sixty-four percent of actively managed MONEY 50 funds received a Morningstar stewardship grade of A or B, compared to only 13% of funds in general.

Changes to the List

While we are cautious about making switches, events can force our hand. We are replacing three funds for the 2015 list:

Out: T. Rowe Price Equity Income T. ROWE PRICE EQUITY INCOME FD PRFDX -0.7985% . Longtime manager Brian Rogers is stepping down in October. His successor, John Linehan, has a wealth of experience, so shareholders needn’t sell. That said, the fund’s stellar record belongs to Rogers.

In: Dodge & Cox Stock DODGE & COX STOCK FUND DODGX -0.6531% . The management team has delivered impressive returns at low cost, beating 99%, 92%, and 67% of their peers over the past three, five, and 10 years, respectively. The fund watchers at Morningstar give Dodge & Cox an “A” for how it treats shareholders, taking into account fees, disclosures, manager compensation, and other factors.

Dodge & Cox Stock is a true value fund, meaning the managers look for unpopular stocks and hang on, expecting investors to come around and bid share prices up.

“You have to understand the firm’s strategy and be willing to hold on,” says Morningstar analyst Laura Lallos. For instance, battered computer giant Hewlett-Packard is the fund’s top holding, and the nine-person management team has other big technology bets, including one on Microsoft. A recent success: buying J.P. Morgan Chase after news of the London Whale trading scandal in 2012. The stock has risen almost 70% since then. That said, the fund fared poorly during the financial crisis. But over the years it has bested the market in up months and lost less in down months.

Out: Primecap Odyssey Aggressive Growth PRIMECAP ODYSSEY AGGRESSIVE GROWTH POAGX 0.3053% . After posting top returns for a decade and seeing an influx of money, the fund closed to new investors. That’s a positive for shareholders as management decided to go with its best ideas rather than find ways to deploy more cash.

In: iShares iBoxx $ Investment Grade Corporate Bond ISHARES TRUST IBOXX USD INVT GRD CORP BD LQD 0.584% . Instead of replacing Primecap with an­other stock fund, we bulked up our fixed-income selection at a time when Treasuries, the go-to bond investment, pay so little.

Low-fee LQD buys the debt of such household names as Verizon, Goldman Sachs, and General Electric and has outperformed its peers. While blue-chip debtors are unlikely to default, corporate bonds are more volatile than Treasuries, so this fund should supplement, not replace, your core bond holding.

Out: Harbor Bond HARBOR BOND FUND INST HABDX 0.4894% Why? In a name, Bill Gross. The co-founder of Pimco left the bond giant in the fall for Janus. Investors have been pulling money from Harbor, a sister fund to Pimco Total Return, as Gross’s recent bets against Treasuries failed to pay off. Harbor has trailed 72% of its peers over the past 12 months, although the fund has a solid long-term record. Still, given management uncertainty at Pimco, we replaced Harbor.

In: Fidelity Total Bond Fund FIDELITY TOTAL BOND FTBFX 0.3714% . An experienced team led by Ford O’Neil has given investors a smooth ride at a lower cost than Harbor. The fund can invest up to 20% of its assets in non-investment-grade debt. Those “junk” holdings are one-seventh of the portfolio now. The idea is to add yield without significantly increasing risk.

Funds Under Review

While we seek out portfolios that beat their average competitor over five years, we don’t immediately eject funds on the list when their returns lag. Contrarian-minded managers can post subpar results before the market vindicates their thinking. That said, continued under­performance bears scrutiny. We’re watching the following funds:

Delafield DELAFIELD FUND INC DEFIX -0.8072% Managers J. Dennis Delafield and Vincent Sellecchia have whipped the average competitor that invests in midsize value stocks by 2.5 percentage points a year since 1999, but they’ve struggled the past two years, in part due to large holdings in industrials and basic materials, sectors that have lagged the broader market. Still, Delafield has finished in the top 15% of similar funds in three of the past six years.

Weitz Hickory WEITZ HICKORY FUND WEHIX -0.39% Run by Omaha’s second-most-­famous value investor, Wally Weitz, this fund has trailed competitors badly over the past three- and 10-year periods, thanks to performance laggards such as security firm ADT. Plus, a large cash allocation meant Weitz didn’t fully capitalize on the bull market. Nevertheless, the fund ranks in the top 13% of peers over the past five years.

Wasatch Small Cap Growth WASATCH SMALL CAP GROWTH WAAEX 0.1622% Jeff Cardon, the manager since 1986, tries to find companies that have low levels of debt and can double their earnings in five years. While the fund’s 15-year record is impressive, Wasatch has trailed almost 60% of its peers over the past five years, thanks in part to its bet on energy stocks, which have fallen as oil prices decline.

See the full MONEY 50 list

MONEY mutual funds

MONEY 50: The World’s Best Mutual Funds and ETFs

Angus Greig

Our list of the world’s best mutual and exchange-traded funds can steer you safely toward your goals—even when the going gets rough.

Over the past five years of impressive stock and bond returns, the rising tide lifted nearly all boats. Alas, tides ebb, and the markets have been high for longer than usual. It’s time to look at what matters to you not only when seas are calm, but also when they’re stormy.

That’s the thinking behind the MONEY 50, our selection of the world’s best mutual and exchange-traded funds. Note that we didn’t say “top-performing” or “hottest.” Instead, by sticking to low-cost portfolios run by rock-solid management, the MONEY 50 is meant to give you the best shot possible at outperformance over dec­ades, not months or years.

How to use the list? The funds are broken into three basic categories — building-block, custom, and single-decision — each of which is meant for a different purpose.

  • Building-block: Use these as your core holdings. These are 14 low-fee index funds — both traditional mutual funds and ETFs, which you buy and sell like stock — that closely track market benchmarks such as the S&P 500. The goal with here is broad diversification.
  • Custom: Use these to augment your core holdings with alternative investments such as real estate or natural resources. You can also use them to tilt your portfolio toward asset classes that tend to outperform the market over the long run, such as the stocks of smaller companies or “value” stocks, which are cheap relative to their earnings per share.
  • Single-decision: For those who want to make just a single investment decision, these two target ­retirement-date fund offerings grow more conservative as you get older.

Two final notes: First, for help with some of the terminology in the MONEY 50, you’ll find a glossary below the tables; and second, for more about how we choose the MONEY 50 funds, and how the list changed this year compared to last, read this.

And now, the world’s 50 best mutual and exchange-traded funds:

Building-Block Funds

These funds and ETFs, which offer you exposure to big chunks of the stock and bond markets, should be used for the core part of your portfolio that you’ll hold on to for years. because you’re seeking broad market exposure, low-cost diversified index funds are your best bet.

Large Cap Style Expense Ratio YTD Return 5 yr Return Initial Investment
Schwab S&P 500 Index Blend 0.09 13.5% 15.9% $100
Schwab Total Stock Market Index Blend 0.09 11.9% 16.2% $100

Midcap/Small-Cap Style Expense Ratio YTD Return 5 yr Return Initial Investment
iShares Core S&P Mid-Cap ETF Blend 0.14 8.1% 17.1% N.A.
iShares Core S&P Small-Cap ETF Blend 0.14 2.4% 17.7% N.A.

Foreign Style Expense Ratio YTD Return 5 yr Return Initial Investment
Fidelity Spartan International Large Blend 0.20 -2.6% 6.1% $2,500
Vanguard Total International Stock Large Blend 0.22 -2.1% 5.0% $3,000
Vanguard FTSE All-World ex-U.S. Small-Cap Small/Mid Blend 0.40 -4.4% 6.6% $3,000
Vanguard Emerging Markets Stock Emerging Markets 0.33 2.2% 2.6% $3,000

Specialty Style Expense Ratio YTD Return 5 yr Return Initial Investment
Vanguard REIT Index Real Estate 0.24 28.4% 17.6% $3,000

Bond Style Expense Ratio YTD Return 5 yr Return Initial Investment
Vanguard Total Bond Market Index Intermediate Term 0.20 5.3% 3.9% $3,000
Vanguard Short-Term Bond Index Short Term 0.20 1.2% 1.8% $3,000
Vanguard Inflation-Protected Securities Inflation-Protected 0.20 3.8% 3.8% $3,000
Vanguard S/T Inflation-Protected Sec. ETF Inflation-Protected 0.10 -0.6% N.A. N.A.
Vanguard Total International Bond Index World 0.23 7.9% N.A. $3,000

Custom Funds

Supplement your core holdings with these funds to give your portfolio a tilt toward certain kinds of stocks and bonds, diversify more broadly, or play a hunch.

Large Cap

Style Expense Ratio YTD Return 5 yr Return Initial Investment
Dodge & Cox Stock Value 0.52 10.4% 16.0% $2,500
PowerShares FTSE RAFI U.S. 1000 ETF Value 0.39 11.6% 16.4% N.A.
Sound Shore Value 0.93 11.9% 15.4% $10,000
Primecap Odyssey Growth Growth 0.66 15.1% 17.1% $2,000
T. Rowe Price Blue Chip Growth Growth 0.74 9.6% 17.7% $2,500

Mid-Cap Style Expense Ratio YTD Return 5 yr Return Initial Investment
The Delafield Fund Value 1.22 -6.0% 11.9% $1,000
Ariel Appreciation Blend 1.13 7.1% 16.7% $1,000
Weitz Hickory Blend 1.22 0.8% 17.3% $2,500
T. Rowe Price Div. Mid-Cap Growth Growth 0.91 10.1% 17.1% $2,500

Small-Cap Style Expense Ratio YTD Return 5 yr Return Initial Investment
Royce Opportunity Value 1.17 -4.1% 15.7% $2,000
Vanguard Small-Cap Value ETF Value 0.09 8.3% 17.0% N.A.
Berwyn Blend 1.20 -7% 14.9% $3,000
Wasatch Small Cap Growth5 Growth 1.24 0% 15.5% $2,000

Foreign Style Expense Ratio YTD Return 5 yr Return Initial Investment
Dodge & Cox International Stock Large Blend 0.64 3.3% 8.8% $2,500
Oakmark International5 Large Blend 0.98 -2.6% 10.6% $1,000
Vanguard International Growth Large Growth 0.48 -2.7% 7.7% $3,000
T. Rowe Price Emerging Markets Emerging Markets 1.25 3% 2.9% $2,500

Bond Style Expense Ratio YTD Return 5 yr Return Initial Investment
Dodge & Cox Income Fund Intermediate Term 0.43 5.4% 5.1% $2,500
Fidelity Total Bond (FTBFX) Intermediate Term 0.45 5.3% 5.3% $2,500
Vanguard Short-Term Investment Grade Short Term 0.20 1.7% 2.8% $3,000
iShares iBoxx $ Inv. Grade Corp. Corporate 0.15 7.9% 6.8% N.A.
Loomis Sayles Bond Multisector 0.92 4.9% 8.5% $2,500
Fidelity High Income High Yield 0.72 1.8% 8.5% $2,500
Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares Muni Nat’l Intermediate 0.20 6.9% 4.4% $3,000
Vanguard Limited-Term Tax-Exempt Fund Muni Nat’l Short 0.20 1.9% 1.9% $3,000
Templeton Global Bund Fund4 World 0.88 2.7% 6.1% $1,000
Fidelity New Markets Income Emerging Markets 0.86 5.7% 7.4% $2,500

One-Decision Funds

Don’t want to put together a portfolio on your own? Then use one of these professionally managed funds that hold a diversified mix of stocks and bonds.

Fund Name Style Expense Ratio YTD Return 5 yr Return Initial Investment
Fidelity Balanced Balanced 0.56 10.1% 12.0% $2,500
Vanguard Wellington Fund Balanced 0.26 10.1% 11.5% $3,000
T. Rowe Price Retirement 2020 Fund Target Date 0.67 6.0% 10.7% $2,500
Vanguard Target Retirement 2035 Fund Investor Shares Target Date 0.18 7.4% 11.8% $1,000
NOTES: 1. Net prospectus expense ratios were used. 2. Total return figures are as of Dec. 8. 3. Five-year returns are annualized. 4. 4.25% sales load. 5. Shares available only through fund company. ETFs do not have a minimum initial investment. SOURCES: Lipper and fund companies

Fund glossary

Large-cap: Invests in shares of firms with stock market values, or market capitalizations, of $10 billion or more

Small-cap and midcap: Invest in smaller companies

Specialty: Invests in assets that don’t move in sync with the broad stock or bond market

Target date: Provides exposure to a mix of stocks and bonds appropriate for your age—and gradually grows more conservative over time

Balanced: Offers you exposure to a mix of stocks and bonds, but doesn’t grow more conservative over time

Value: Looks for stocks that are selling at bargain prices

Growth: Focuses on companies with fast-growing earnings

Blend: Owns both growth- and value-oriented stocks

Short term: Owns bonds that mature in about two years or less

Intermediate term: Owns bonds that mature in two to 10 years

Multisector: Can buy foreign or domestic bonds of any maturity

Inflation-protected: Owns bonds whose value at least keeps pace with the consumer price index

Read next: How MONEY Selected the 50 Best Mutual Funds and ETFs

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MONEY Health Care

3 Ways to Get Cheaper Health Care in 2015

Lightbulb with Band-Aids
MONEY (photo illustration)—Getty Images (2)

Companies are offering workers more health and wellness options, which means more opportunities for you to shop around for the most affordable care.

In recent years employers have been doing all they can to reduce their share of health care costs—from pushing high-deductible health plans to limiting spousal coverage. The big thing for 2015: Companies will increasingly be nudging workers toward cheaper care in different settings, says Dr. Jeffrey Kullgren, an assistant professor at University of Michigan Medical School.

A few examples: Next year 37% of companies will offer telemedicine—consultations with a provider by phone or video—and 34% plan to add it by 2017, according to HR consulting firm Towers Watson. More than half of firms offering health benefits now cover services at retail clinics in supermarkets and pharmacies. Plus, employers are bringing some care in-house: 51% of ­companies with 200 or more workers offer biometric screenings for diseases, the Kaiser Family Foundation found. Two-thirds of large firms offer lifestyle-­management programs to help workers lose weight or quit smoking, and 66% offer disease management, HR consultancy Mercer reports.

This new patient-as-consumer world does have an upside for workers—“You now have an opportunity to shop around for the most affordable care,” says Kullgren.

Here’s what you need to know for 2015.

Get wellness at work. A 2013 survey from the Department of Labor and Rand found that few people take advantage of employer wellness initiatives: Fewer than half of eligible workers took part in clinical screenings, 16% made use of disease management, and only 10% joined weight-management programs. The rest are missing out on big savings. The Affordable Care Act allows employers to offer up to a 30% reduction in health-insurance premiums for participation in wellness programs, notes Jacksonville financial planner and MD Carolyn McClanahan.

And there’s more at stake than premiums: Flu shots—which many firms offer for free—result in a 71% reduction in related hospitalizations among adults, per the CDC. Weight loss that takes you out of the obesity zone can save you $2,800 a year, according to a National Bureau of Economic Research paper. Screenings can identify risk factors for illnesses like diabetes—and that disease can increase medical costs by a factor of 2.3, the CDC reports.

Make the right call. On average, the out-of-pocket cost for telemedicine is around $40, vs. $95 for a regular doc visit, Towers Watson reports. Despite the savings, it isn’t right for every health issue. Andrew Fitch of NerdWallet Health says that telemedicine is best used when you need monitoring for a condition you’ve already been treated for or for concerns that likely wouldn’t require in-person testing—e.g., “What’s this weird rash?”

Get care where you get groceries. The Kaiser Family Foundation found that among employers that cover retail clinics, 14% provide a financial incentive to get care at one over a regular doctor’s office. A retail clinic is a viable option—medically and financially—if you need, say, a vaccine or treatment for a minor illness like a fever or sore throat, says Fitch.

Just don’t let this and other new care options tempt you to skip out on regular physicals with your regular doctor (which your insurer likely covers 100%). Most important, Kullgren says, keep your GP in the loop about other care you get.



MONEY First-Time Dad

Read This Before Taking a Road Trip With a Baby

Luke Tepper

A few holiday travel tips from the battle-tested Taylor Tepper, MONEY’s first-time dad.

Many new parents are about to hit the road for the holidays, on drives and flights, short and long, with infant children in tow. Which means you’ll be moving at high speeds with a ticking time bomb.

If this thought terrifies you, good. The prospect of trying to reconcile your desire to relax on a rare vacation with soothing an inconsolable 20-pound tyrant should terrify you. It terrified me the last time we tried it, on Thanksgiving.

On Thanksgiving Day, Mrs. Tepper and I drove with our son Luke up to Rhode Island to visit friends for the holiday. Willfully trapping oneself in a 3,000-pound metal cage with an infant captured us at our most masochistic.

Still, we survived. Sorta. And if you’re hitting the road this Christmas, you can too. By giving yourself ample time before departure to ready the ship and dividing up chores and other domestic responsibilities between you and your spouse, a true vacation can be attained.

The key is communication. So I’m sharing my travel diary below. May my successes fortify your spirit and my failures illuminate. Godspeed and happy holidays.

4:33 am: Luke wakes up screaming. Rising before sunrise is, sadly, nothing new for Luke. But the screaming is. Foreshadowing. Anyway, he eventually falls back asleep, and so do we. But it’s that kind of half-sleep where consciousness exists just below the surface.

5:58 am: Luke wakes up again—this time hungry instead of angry—and Mrs. Tepper feeds him briefly, while I fumble around assembling his bottle. Our bottles, by the way, have five pieces and require measuring one scoop per two ounces of water, which is much more complicated than it sounds when it’s 6 o’clock in the morning and you can’t remember how to use your hands.

6:34 am: After feeding, Luke plays for a half-hour. I read him Shel Silverstein’s poem “Point of View,” a kind of vegetarian morality play, which pinged my own guilty conscience for all of the meat I was going to scarf down in nine hours. So it goes.

6:40 am: Mom has just reawakened and exits the bedroom to find her son’s hands gouging the eyes of her prostrate husband. She walks to the bathroom and brushes her teeth.

6:53 am: Chloe, our ancient dachshund and now somewhat marginalized pet, needs to be let outside. Chloe won’t be joining us for Thanksgiving. Luke, meanwhile, walks into the bathroom, fixes himself between my wife’s feet and rages at the baby-proofed cabinet with pounding fists and fierce yawps.

6:55 am: While I’m outside with Cujo, Mrs. Tepper turns on the water for a shower. Before she can hop in, Luke belly-flops over the side of the tub. He’s now in love with water. Panic shoots through Mrs. Tepper’s limbs.

6:58 am: Chloe leads me into the apartment, where we see my relieved wife holding my damp, nonplussed son aloft.

7:10 am: Mom packs up Luke’s things for our two-night, three-day stay. I laid them out for her an hour earlier. Brownie points for me. His wardrobe included three onesies, three pairs of pants, three full-body pajamas, a couple of shirts, a sweater, hoodie, bear suit, jacket, hats, gloves, and three pairs of socks. Meanwhile Luke sits besides me, very interested in my glass of water. He eventually puts the rim of the glass to his mouth and spills the water down the front of his shirt.

7:15 am: Mom rushes over and extricates Luke from his soaked outfit. In doing so, she also removes his wet diaper. By the time she lifts Luke to the changing table, he pees on the floor and howls maniacally at his achievement.

7:26 am: Dry, diapered, and clothed, Luke crawls around the apartment, eventually sidling up to Chloe, who barks at her new master because he tried to swat her flappy ear. She also gets nervous around suitcases. Sanity starts to wear thin at the Teppers’.

7:34 am: Mrs. Tepper packs up Chloe’s food, puppy pads, organic calming medicine (she has separation anxiety), down jacket, and leash and I drop it, along with the dog, at the home of a friend who miraculously loves the dog as much as my wife does.

7:42 am: I’m now outside pulling old coffee cups and pizza boxes out of our car. At some point, we’ll be the type of adults who keep a spotless vehicle, but that day isn’t today.

7:51 am: I am outside again, but this time with the first wave of bags. (It will take me three trips.) Nestled in among our large suitcase and Luke’s stroller are three hampers’ worth of dirty laundry. If nothing else, we’re getting our damn laundry done this weekend.

7:58 am: While I’m acting out Tetris in our car’s trunk, my wife cleans the kitchen. Luke meanwhile grabs the railings on the baby gate, swinging it wildly, as if he’s a freedom-starved prisoner of war.

8:00 am: Luke attempts another sip of water, but Mom captures the cup from his hand midpour. She gives him a Baby Mum Mum—a rice biscuit—instead.

8:04 am: I schlep the last bit of luggage (mostly shoes and electronic equipment) outside, while my wife crawls on hands and knees in search of Luke’s Elmo toy cell phone. Luke watches the domestic choreography with glee.

8:10 am: With Luke in arms, we give the house one last look around. Little do we know we’ll be back the next day.

8:20 am: We fasten Luke into his car seat. He immediately squirms.

8:30 am: Mrs. Tepper runs into a neighborhood organic grocery store to pick up a food pouch, and then jets into Starbucks for coffee and breakfast sandwiches.

8:50 am: Mom returns to the car to sounds of Luke crying and me praying behind the wheel.

8:55 am: Only 55 minutes behind schedule we are finally on the road, and there’s no traffic.We give thanks.

8:59 am: Mom gives Luke a fresh bottle.

9:08 am: Thanks to the car’s heating system and his bottle, Luke enters a trance and falls asleep a mere three hours after he woke up. Mom fights the urge to clean a spot of milk from his chin, lest the baby open his eyes.

9:10 am: Parents happy.

Epilogue: We arrived in Rhode Island in record time and had a wonderful Thanksgiving dinner. All marveled at Luke’s development. Trouble, though, ensued at 1 am Friday morning, when Luke awoke screaming in his crib. Over the next 9 hours, Mrs. Tepper and I slept a combined 300 minutes as the little guy tossed and turned and yelled and fought against sleep’s embrace. I eventually took him for a drive at four in the morning in hopes of calming him down. We decided to return home the next night, so he’d hopefully sleep in the car for the ride back to Brooklyn. All went according to plan until our car ran out of coolant in Westbrook, Conn., and would have cooked the engine if not for the generous help of a standup Mobil employee. Thanks and praise unto him. After that 45-minute pit stop, we were back on our way and returned home an hour before midnight.

Which is all to say that new parents may want to mentally ready themselves for Murphy’s Law. By preparing for the worst, you can be delightfully surprised when your car doesn’t billow smoke hundreds of miles from home or you don’t return to work on Monday desperately more exhausted than before.

More From the First-Time Dad:

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