<p>Yes I know it should have been turned into cash at this year when NONE of us knew the market would tank so terribly, so that would've made me psychic, which is a much better skill than trying to time the market. As a single mother, it's just so heartbreaking to save so much so my dauther could go anywhere and to see she has less than one year in savings. Breaks my heart but I've promised, so I will simply have to pay the nearly 40K in cash the first year and hope the miracle of the stock market rebounds by August of 2010. Frustrating timing. And if there is anyone who knows more about getting scholarships that would be excellent...seems like it's hard to tell the legitimate ones and the "marketing" ones that just want your information....just like they ACT like University of Phoenix is a real school--same issue. My daughter is accepted at University of Pittsburgh, she's happy and so am I...now we will NOT be receiving aid because of my income...so scholarships MUST happen. Any help, guidance, leadership would be appreciated.</p>
<p>Sorry, no help guidance or leadership. How bout some sympathy? It could have happened to anyone and did happen to many (if not everyone). I have to give credit to NJBest (New Jersey state run 529 plan). I freaked out a few months ago and very belatedly researched their funds and learned that my sons were in age based funds and because they were both already in college NJBest had their money mostly in US Treasury bonds. The fund has lost some value but still has gains, ie is worth more than what I put in. My retirement account, on the other hand... is down 30%.</p>
<p>If you look back on history, it is highly likely you will recover your stock market losses during college if your investments were in a bunch of different stocks! I'm lucky I did have my senior's college funds in age based 529s so none of it was in stocks, but I didn't even open my last few retirement statements!</p>
<p>"It could have happened to anyone and did happen to many (if not everyone)."</p>
<p>I disagree that it could happen to anyone. It is a basic tenant of investing that you do not leave money in risky investments that you are going to need in the short-term. I have probably seen 15 - 20 articles in newspapers, magazines, investment company mailings, and broadcast segments on TV educating people to this over the last couple of years alone. So there is a large segment of the investing population that has paid attention to this and that it would not have happened to. </p>
<p>But I'm not saying this to place blame on the OP...just that it is frustrating that with so much info out in the public domain on this, that I have seen many people claim that they could not have guessed that the market would go down. The point is not to guess or try to time the market, but to eliminate the risk of guessing that it will not go down.</p>
<p>As far as advice to the OP, I agree that the only way to recoup a significant portion of the losses at this point is to leave as much of the money in stocks in the 529 as you can for as long as you can...but realizing at the same time that this exposes you to near-term volatility as well. One would hope that after some continued volatility over the next year or so, that the market will gain confidence and begin to recoup some losses on a more upward trend. But there are no guarantees.</p>
<p>We were caught in 9/11. Our 529 didn't have a money market but a conservative bond portfolio, probably loaded with Salle Mae, Ginny Mae, Fanny Mae, Freddie and AAA Banking. Today, these securities have taken bigger falls than stocks.
I was already moving $$ to a more conservative stance, but things happened quickly, just like now. </p>
<p>Learned my lesson, always dollar cost average into and then out of an investment. </p>
<p>Rays of hope. Interest rates are falling and middle class will put pressure on Obama to lower student loan rates. Its better to have young people in school than young people unemployed</p>
<p>All my kids' accounts are age based but senior Son's was still 25% in stocks....at least 75%+ is okay. The most worrisome is 10th grade Daughter's. It was a lot in stocks and I don't think there's time for it to come back up.</p>
<p>Missypie - well, you could be pleasantly surprised, at least to some extent. The selling that drove the market to its lowest lows was based primarily on fear, not on fundamentals. There are many companies whose stocks are really undervalued now based on panic selling. If measures now under way can restore confidence to a significant degree, then hopefully valuations will begin to return to more realistic measures. Yes, there are significant economic concerns, but much of the market is psychological. By two years from now, hopefully you may have realized some significant return to prior valutations for your daughter's account.</p>
<p>Sympathies are with you. Late savers like myself are hit even in age based plans as the losses don't have a chance to catch up as they switch into lower risk investments as the beneficiaries get older. I'm trying to learn from it all for my retirement. Watch my investments, diversify, and up my savings. I'm just happy I have a stable job to offset my losses this year. I can't imagine what people are doing who lost a lot of money and a job on top of it.</p>
<p>Boy, you said it about the current market being a wake up call for retirement.</p>