Thoughts from mom investing for college

My 3-part strategy

  1. First, I’m investing in a 529 plan because it’s connected to my specific goal: saving for college. Plus it provides generous tax benefits, such as deferred income tax on earnings, which allows me to further increase and accelerate my savings. *
  2. Next, I believe in allocating my resources. My kids ’college savings are invested in a mix of stocks and bonds, guided by how many years we have been graduating from high school. This mix allows us to benefit from long-term growth stocks that are traditionally supplied when markets become volatile. And I made things easier by selecting an age-based portfolio from my 529 plans. This portfolio automatically adjusts its allocation to be more conservative as we graduate and move closer to that first tuition bill. As a busy parent, I often pull in 20 different directions, so convenience is important to me. Although I still periodically check that my allocation is consistent with my goals, investing in age-based options has helped me keep one more thing off my to-do list.
  3. Finally, I try not to react to the recent instability. Markets go up, and markets go down – sometimes in short-term shiny quantities. But what is important for your long-term success is that you do not let your decision be intimidating. Vanguard’s respected founder, Jack Bugle, declared that often the best investment advice during times of market turmoil is, “Don’t do anything, just stand there!”

That’s why I’m on course. Although dramatic market swings can be stressful, they are not uncommon. And history tells us that in the long run, the market returns and rewards investors who have the strength to endure ups and downs. I am committed to maintaining that approach so that our college savings goals can stay on track.

So this is my line of defense: save on a 529 plan, believe in an appropriate resource allocation, and of course stay. I know this is often said to be easier said than done, but it has been proven that investors who adopt this approach are often rewarded in the long run.

Finally, I invite you to join our community. Post a comment below to share your tips for dealing with volatility, or read on to see what other investors are saying about it.

* The availability of taxes or other benefits may depend on meeting other requirements.


For more information on any 529 savings plan, contact the plan provider to get a program description that includes investment objectives, risks, charges, expenses and other information; Read and consider carefully before investing. If you are not a state taxpayer, consider before investing whether your or the nominee beneficiary’s own state provides a state tax or other benefits that are only available for investment in such state-eligible tuition programs. Other state benefits may include financial aid, scholarship funds and protection from creditors. Vanguard Marketing Corporation serves as a distributor for about 529 plans.

All investments are at risk, including the potential loss of money you invest. Past performance is not a guarantee of future results.

Diversity does not guarantee gain or protect from loss.

Investing in bonds is subject to interest rates, credit and risk of inflation.

529 College Savings Day is a registered service mark of Ascension Broker Dealer Services, LLC.

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