The 5 Best Stock Funds for Retirement Savers in 2020

What a difference a year makes.

3d pie chart on finance report and old wood table
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What a difference a year makes. On Christmas Eve 2018, the S&P 500 closed sharply down, bringing its peak-to-trough losses to 19.8% – just shy of the 20% loss that defines a bear market. Even many of the best stock funds were clobbered. You had to look hard to find any optimistic market watchers that winter.

In contrast, with the S&P 500 up a stunning 29% in the year just ended, most market gurus are expecting good tidings in 2020 – albeit much more muted gains than 2019 produced.

Last year was yet another one in which growth walloped value, even though growth stocks are significantly overpriced compared to value stocks. (Yes, growth stocks are supposed to be more expensive than value stocks – but not by nearly the gap that exists today.) Similarly, foreign stocks again lagged U.S. stocks despite being cheaper than U.S. stocks when measured against earnings and sales.

The lessons I take away from that? Overweight foreign and value stocks slightly, but don't get carried away. Don't try to time the market, and be patient with what looks attractive. Diversification is still your best friend.

With that in mind, here are my five best stock funds for retirement savers in 2020.

Returns and data are as of Jan. 21, unless otherwise noted, and are gathered for the share class with the lowest required minimum initial investment – typically the Investor share class or A share class. If you use an investment adviser or online brokerage, you may be able to buy lower-cost share classes of some of these funds. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.