Skinnee…The way to offset the risk of loss in a college fund account is to begin converting equities into bonds that mature 3 months before Freshman year tuition is due, 3mos. before Sophmore tuition is due, 3mos. before Junior tuition is due, and 3 mos. before Senior tuition is due. That is called a laddered bond portfolio. One can also build a bond ladder for income purposes. An example would be a 10 bond ladder that includes a 1yr, 2yr, 3yr, 4yr, 5yr, 6yr, 7yr, 8yr, 9yr, and a 10 yr. When the 1yr matures buy a 10yr with the principle, when the 2yr matures buy a 10 yr with the principle, when the 3 yr matures buy a 10 yr with the principle, etc., etc. Of course you have the option of spending, holding, or reinvesting the interest income as it comes in. This a simple bond investment strategy for a risk averse investor.
Sol Mate
Mako 20B
225 Optimax
