^^ The OP is from 2011. I'm sure her DC's 529 is doing just fine (if she held/bought as the previous posters advised!)

Instead of gambling your kids college fund, you should have considered a prepaid tuition plan that locks in todays rates of tuition. Its a risk free 4% yearly rate of return basically depending on how much tuition actually goes up.

Anonymous wrote:I tend to be a pretty optimistic (or bullish) investor, so for each of my kids' 529 accounts the monthly investment is split 50/50 between the target date fund for their age and the 100% stock fund. Since the time horizon is at least 10 years away, I am in the invest and forget mode for at least another 8 years.

I should know this, but I'm sure hoping/assuming that the age-based fund for a 6 yr old is mostly in stocks. But I could tweek it.

I tend to be a pretty optimistic (or bullish) investor, so for each of my kids' 529 accounts the monthly investment is split 50/50 between the target date fund for their age and the 100% stock fund. Since the time horizon is at least 10 years away, I am in the invest and forget mode for at least another 8 years.

I could shop around but I'm hearing that the Fidelity fund is not too far off the mark for money we'll need in 12-13 years.

Anonymous wrote:Thanks for the sane advice. We are definitely buy and hold types (probably to a fault--we probably could have retired off Microsoft or Contrafund or Magellan back in the day). But I put $ into the 529 accounts periodically and don't check the performance. I just wanted to make sure I wasn't throwing away good money. I am not good about making contributions monthly -- I end up contributing the max non-tax gift amount to each child ($26,000? per kid) usually in December. There's something I can work on.

Still no reason not to shop around for index funds for your new deposits (or "lifecycle" funds designed for college that are composed of index funds).

I agree that you don't want to dump stocks now and buy bonds or park the money somewhere.

I don't see why it's a bad idea to trade a mutual fund you're not happy with for a similar but hopefully better performing one--you'd be selling low but also buying low (assuming the transactions take place at almost the same time), right?

Anonymous wrote:I assume that the S&P 500 is a reasonable benchmark for your 529 (i.e., you weren't invested in riskier funds focused on things like small companies or emerging markets). You could look into switching to index funds for your 529--at least if you have a S&P 500 index fund, it's going to perform the same as the S&P 500. The real benefit of index funds is lower fees compared to actively managed mutual funds.

No, it isn't. OP invested in the target date funds. They have more aggressive strategies for longer-term investments, and since her 6 yo is 11-12 years away from college, the investments are probably fairly aggressing (as compared to her older kids, who are closer to college, have less risky investments, and hence did better).

OP, this is part of the deal with a target date fund. If you switch now, you are doing 2 things - locking those losses in, and stating you don't believe in the investment strategy of the target date fund. And that might be the right decision for your peace of mind, but as another PP stated, one year is a really short time by which to try to judge a fund.

Thanks for the sane advice. We are definitely buy and hold types (probably to a fault--we probably could have retired off Microsoft or Contrafund or Magellan back in the day). But I put $ into the 529 accounts periodically and don't check the performance. I just wanted to make sure I wasn't throwing away good money. I am not good about making contributions monthly -- I end up contributing the max non-tax gift amount to each child ($26,000? per kid) usually in December. There's something I can work on.

Also, invest a regular amount monthly -- you get the benefits of dollar cost averaging that way.

Don't sell now - or you will successfully buy high, sell low and lose a bunch of money.

My IRA did the same thing, but the funds and stocks are clawing there way back.

Recognize it will take some time and with long time horizon -- just keep putting money in -- like PP more now that the share price is depressed. Five years from now you will look brillant for having done so.

Do not panic. Do not sell low, which is what you would do by moving your funds out of your current account into another one. Since prices are low, the thing to do now is BUY. What you need to do is hold tight, wait for the market to improve, and keep buying more stock.

I assume that the S&P 500 is a reasonable benchmark for your 529 (i.e., you weren't invested in riskier funds focused on things like small companies or emerging markets). You could look into switching to index funds for your 529--at least if you have a S&P 500 index fund, it's going to perform the same as the S&P 500. The real benefit of index funds is lower fees compared to actively managed mutual funds.

a couple of other basic investment reminders:

past performance is no guarantee of future returns, and

the older kids funds are going up because they have more of a mix of bonds (as they should as they approach college age) and bond prices have been going up this year (from rock bottom) while stock performance is down overall.

Bottom link: I wouldn't touch it, and I would not be worried.

1 year is not enough time to measure in terms of stocks. Buy and hold. If you have a 6 year old, that means every contribution you are making, you are buying more shares, and then as the price goes up over time, they are worth more.

the total number of shares you have purchased has not gone down by the way. The value could turn around by the time your child approaches college age.

me too!

everyone says just wait it out...

I expect volatility, but my 6 yo's 529 fund is down almost 22% in the last year compared to S&P 500 up 1%. Her fund is Fidelity's 529 plan based on her date of birth. (# older kids' Fidelity age-based funds are doing much better). I don't know what if anything I could/should be doing/researching?