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Fidelity 529
Old 02-11-2010, 07:04 PM   #1
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Fidelity 529

I spoke with the Fidelity people yesterday about my daughters 529 fund because I needed to take some cash to pay for her school.

The rep mentioned that I might want to switch out of this fund (2009 Age Based) into something more stable because he felt with interest rates rising in the near term, the bonds in the fund would cause it to lose money. I asked if they were short term bonds and he said they were all different maturities, but because of the mandate associated with the fund, they had to stick to the rules.

He suggested something more stable like all cash. It surprised me, because I thought they weren't supposed to offer advice like this. The fund is currently 20/40/40 stock/Bond/Cash
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Old 02-11-2010, 08:47 PM   #2
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If I were in the withdrawal phase cash is where I would be.
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Old 02-12-2010, 10:43 AM   #3
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He suggested something more stable like all cash. It surprised me, because I thought they weren't supposed to offer advice like this. The fund is currently 20/40/40 stock/Bond/Cash
I think it's conventional financial wisdom that anything you're planning to withdraw in the next couple years should be in cash, and anything you're planning to withdraw in the next five years should not be in equities.

Our kid starts college in 177 days yet we left her college fund in over 90% equities until we went 100% cash in Feb 2008... it was that guy Laurence who's reintroducing himself that gave us a wakeup call.
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Old 02-12-2010, 03:14 PM   #4
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Since students stay in college a few years, I don't see the need for 100% cash for a HS senior or college freshman. It's OK, but I think it's a want and not a need.
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Old 02-12-2010, 08:20 PM   #5
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Since students stay in college a few years, I don't see the need for 100% cash for a HS senior or college freshman. It's OK, but I think it's a want and not a need.
Normally I'd agree with that sentiment, but it would seem that any bond is gonna suck wind as soon as interest rates start rising.

Those 3.75% CDs run out next month and we're probably going to ladder them over the next three years.
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