The Circle Of Debt" How what happens to bond insurers affect us?

Parent Cafe
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<p>You are already in the 529? How has it done the last 6 months?</p>

<p>I would call the 529 company and see what they have that is considered safe. Maybe you can shift without a penalty.</p>

<p>Do not pay a penalty. There are money funds and inflation bonds that are pretty safe.</p>

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<p>I’ve been really pleased with our Michigan 529. We don’t even live in Michigan but a smart economist friend recommeded it and it has chugged along nicely through the past five years or so. We started out in the moderate growth age managed fund for both kids, then moved the older one’s account to the conservative growth age fund. Not spectacular growth over the years but better that I would have done in all equities - 6.5 to 8 percent growth per year. The conservative age fund has weathered the dips in the last month just fine, btw. It’s a mix of a little bit of broad based equities, bonds, cash. The safest vehicle Michigan offers is the TIAA-Cref interest plux inflation fund - very slow growth - ~ 3-4 percent. But maybe appropriate right now.</p>

<p>I do have one criticism of the Michigan plan, though. You’re only allowed to move money among funds once per calendar year.</p>

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<p>If these funds have done ok in the last 6 months, you are probably ok.</p>

<p>I wouldn’t worry about the inflation fund.</p>

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<p>yea - I’ll leave it alone and prepare psychologically to seeing in vanish in a few months. ;D</p>

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<p>lol…</p>

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<p><a href=“http://money.cnn.com/2008/02/05/news/economy/recession_invest.fortune/index.htm[/url]”>http://money.cnn.com/2008/02/05/news/economy/recession_invest.fortune/index.htm&lt;/a&gt;&lt;/p&gt;

<p>"Market Survival Guide

  1. Keep costs down
    In the new era of low returns, it’s important to keep fees down to build a winning portfolio. Buy index funds and ETFs, and don’t pay for Wall Street’s often unreliable advice.
  2. Go for dividends
    A big gift of today’s rocky market is a surge in dividend yields. If you want income for life, grab solid but beaten-down names right now. Two good bets: pharma and utilities.
  3. Take a chance on battered stocks
    Sure, it takes courage, but the best investors pounce when sectors are bloodied and expectations in the cellar. Two reviled sectors: banks and homebuilders.
  4. Look abroad
    Diversification is the foundation of a strong portfolio. One way to get there is with a big allocation in international stocks. But true diversification is tricky. We’ll tell you how to do it right.
  5. Be smart about bonds
    You need fixed-income investments for ballast, but the trick is staying ahead of inflation. The three picks for an inflation-racked world: munis, TIPs, and CDs."</p>