The Wall Street Journal reports that quite a few college-saving 529 plans posted awful returns last year, even for those investors close to college age.
Most 529 plans allow investors to select an age-based investment track that is supposed to automatically get more conservative as the student approaches college age. Sadly, there's significant variation between plans as to how these allocation percentages shift, as well as the underlying funds they are invested in.
Those most at risk would likely have been people enticed by generous matching provisions or other offers by their home state plan (if that plan turned out to be one of the offenders). Beyond that, a focus on the plan asset-allocation options would have been healthy.
The 529 downturn is a good reminder of a crucial investing fact: Nobody cares about your money as much as you do - so make sure you understand what you're investing in.
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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing
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