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College Savings Plans

Post a Comment February 22, 2010 – 2:16 pm | Post Link |  Print This Post |

Financial advisors recommend that investors include 529 college savings plan accounts as part of their overall educational savings strategy. Poor stock market returns have caused some people to shy away from 529s recently according to data from Financial Research Corporation in Boston. New contributions are down by two-thirds from two years ago.

“529 plans are still a very attractive option to save for college for most people because of their flexibility and tax benefits,” said Dan Goldie, President of Dan Goldie Financial Services. “Some investors have pulled back from these plans because of poor results, but this has been caused by a negative return in the stock market, not because the investment plans themselves did poorly.”

Like any investment vehicle, 529 plans need be use prudently by investors. Their investment options will largely move with markets, so portfolios should be well-balanced and highly diversified inclusive of an appropriate amount of short-maturity, high-quality fixed income for risk reduction. Some of the plans favored by Mr. Goldie include those offering Vanguard Funds and West Virginia’s SMART529 Select Plan that offers funds from Dimensional Fund Advisors.

Mr. Goldie said, “Recent times have been very difficult for investors, but those who stay disciplined and diversified should have an advantage. The reasons for the popularity of 529 plans have not changed with the market downturn, and investors should continue to use them when appropriate for their situation. I continue to recommend 529s to my clients, especially those with young children who have many years before any college tuition bills need to be paid.”

Dan Goldie Financial Services LLC is Registered Investment Advisor located in Menlo Park, California. The firm manages diversified investment portfolios for individuals and families, helping them manage their wealth and make smart financial decisions.

Dan Goldie is President of Dan Goldie Financial Services and has been an independent financial advisor and financial planner since 1991. Mr. Goldie is a former professional tennis player and co-author of The Prudent Investor’s Guide to Beating the Market at Its Own Game. He has an A.B. degree in economics from Stanford University and an M.B.A. degree from the Walter A. Haas School of Business at U.C. Berkeley. He has earned the Chartered Financial Analyst designation and is a CERTIFIED FINANCIAL PLANNER™ certificant.