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Going off of the proud parent thread

The Saltman

By The Saltman,
in Huddle Lounge

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pstall Newbie

pstall

Posted
Posted

yes, i would dial down the aggressive approach just a tad. for example, the old rule of thumb for your allocation was your age -100= aggressive portion.

Meaning, if you are 30, the old way of thinking was to be at least 70% agg. That of course is insane now.

I would NOT go more than 50% agg in any fund or set up nowadays. That's me tho.

Check around for fees. See if GA has their own 529 you can set up online and rock and roll.

I have one with NC and it's a piece of cake to do.

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CLTPanther Contributor

CLTPanther

Posted
Posted

First, I'd like to say do not take a buy and hold approach, manage the fund. Here are my thoughts on your options:

Managed Allocation - I'd need to see how diversified this fund is, I assume it's mostly equities (stocks).

Aggressive Managed Allocation - Same as above.

100% Equity - Check to see what the funds are in this one, but I'd allocate maybe 10-25% in equities.

Balanced Fund - Maybe another 25% here.

100% Fixed Income - Bond fund, mostly guaranteed, but there are risks for defaults, so make sure they don't just pile into one company, must be diversified to spread risk.

Money Market - Hell no. You will earn about .25% interest on this, you'd better off just buying CD's.

Guaranteed - These must be government bonds. While the interest is guaranteed, the one thing you should consider is that bond prices move inversely to interest rates. Interest rates cannot stay 0 forever, when the rates start rising, the value of your bonds sink. You may end up losing more on the price of the bond than your interest rate could ever possible cover.

529's are okay and I put some cash into one for my kid, but here's my basic approach.

-Buy silver (or gold, but gold is expensive now) from APMEX.com and put it in a safe and cash it in when she turns 18. Unless the world financial system collapses, there's almost no way the price won't appreciate. The only other real thing that could crush commoditie prices is appreciation of the dollar, which doesn't seem very likely anytime soon or if for some reason commodity prices in the markets get switched from dollar valued trade to another currency, which may for down the price based on how much the other currency is worth. If that happens though, we have much more to worry about than a silver investment.

-Buy CD's from Ally Bank (they have some of the highest interest rates) and set them to auto reinvest upon maturity.

-Buy some US savings bonds, but not too many for reasons above in the fund.

-Check the 529 often and rebalance when the financial landscape shifts.

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sharkman Newbie

sharkman

Posted
Posted

Sounds like you've got some experts here, and I don't want to look stupid....but

I haven't heard anybody mention checking (comparing) fees and expenses. Someplace like Wachovia is going to charge insane fees, while you could probably do better shopping around. Low fees will help long term returns.

Just my .02 cents worth.

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