Timely and Relevant News: Protecting College Savings in a Volatile Market

"In fact, most money invested in 529 college saving plans is allocated to 'age based' portfolios, which automatically scale back risk as the matriculation date approaches. While younger beneficiaries such as newborns may be 100% allocated to stocks (since their college entry time horizon is over 15 years away), high school students will typically have far less exposure to stocks and more money invested in bonds and cash since their time to matriculation is much shorter," describes G. Ward Keever, President & CEO of Covenant Wealth Strategies.

Experts encourage those who are making regular automatic contributions to 529 accounts to continue doing so in order to take advantage of dollar cost averaging. This is the process of investing a fixed amount of money at a predetermined interval. After 18 years of investing, the average cost per share will have represented both high prices and low prices.

In 2008 when the stock market crashed, many investors pulled their money out completely and locked in their losses. However, according to a study done by Fidelity, "Baby Boomers who continued making contributions to their 401(k) plans during the Great Recession tripled their account balances from 2007-2017."