5 29 college funds losing money
I asked this once before but didn’t get an answer. I’m 80. I took out three- $5000 529 college plans thru Morgan Stanley in Dec 21 for grandkids. Lost money ever since. (one is down to $4237.68 already). One is a high sch. senior, one is a sophomore and one is junior high. Should I bail now and assume it was bad timing …..or hang on hoping they’ll at least recover some…or somehow modify the plan. Morg. Stan. plan is called Bright Directions…looks like 60% Fixed Income/Preferreds, 35% Equities, 5% Alternatives. They don’t really have any advice.
Terry Says
Of course they don’t have any advice. The strange thing that has happened so far this year is that not only have stocks gone down, but bond portfolios have also declined since bond prices fall when interest rates rise. It has been a double whammy for “conservative” investment portfolios.
I suggest you let it ride for the two younger kids — they won’t use the money for at least 7-8 years if they wait until their senior year to take the money out.
But you CAN ask Morgan Stanley why the kid who needs the money soonest was in this portfolio instead of something far more conservative. Not much to do about it now. He must use it in 5 years.
I know it’s frustrating. If you have extra money in the future, offer to pay it directly to the college (not them or their parents) when the tuition bill arrives.
