Opinions about 529 options?

[Spud]

We have a 529 Plan for my daughter who is 1. It is through upromise/Iowa, and managed by Vanguard. I have these options to invest in:

Age-Based Savings Tracks
Individual Portfolios

So far, we have been doing "Age-Based Savings Track B," which at this point has lost her 11% or so. Since a 529 plan is supposed to be an investment, I'm pretty sure losing 11% isn't ideal. There isn't a lot of money in the account right now, but we do want whatever we put in to grow, not shrink. So I'm wondering if I should be doing the Age-Based Savings Track B, or switch it out to something different for a while until the stock market gets a little better.

If you were me, what would you do?

[marla]

Investments are risky and they can go up or down. That's part of it. Investing in something else is not going to guarantee it doesn't go down either unless you are only looking for small gains you can get from saving accounts.

[dardhel]

B looks like a good plan. There is no reason to worry about losing money when your time horizon is still 15+ years away. Just my 2 cents.

My son has a plan similar to the A option and he has lost some but he has time to recoup and all the money going in now has a bit more purchasing power.

[sweeps]

The stock market has been tanking recently. If you get out now, you're going to lock in that 11% loss. Stay the course.

[Spud]

Thank you for your responses. "Stay the course" is what I hoped you'd say -- that I am not making a mistake by doing the age-based investing. Dardhel, that's a good way to look at it - the $ we're dropping in there every month has a little more purchase power.

[Slug]

Absolutely, stay the course, and buy more now. You don't have to time the market perfectly when your time horizon is out 15 years.

[noppenbd]

I'm in the same boat, using the Iowa 529 program. We have my daughter on Savings track A right now (which at this point has the same allocation as track B=100% aggressive growth).

It's disheartening, I agree. But you have to invest with your head, not your heart, especially for long-term investments.

I saw a study once that even though the S&P500 returned 11% a year on average over the last 25 years, the average investor only made something like 3-5% a year. This was due to excessive trading and selling low/buying high mistakes. Basically panicking during drops and being too cautious about getting back in. This helps motivate me to stay the course.