Dear Community Friends,

We participate in the Affordable College Savings Plan (in Mississippi).  After receiving the 3rd quarter account statement, I became concerned.  The account had no earnings this past quarter and had actually loss nearly $500.00.  I called the broker who holds the account for MS to inquire about the loss and lack of earnings. We did an item by item walkthrough of the types of investments included in my son's plan. 

One of my son's plans was the 12-14 year old managed allocation which is a combination of bonds, stocks, equity funds, and real estate.  The other plan was the 100% equity which is all stock investments.  As you know, stocks, equities, and real estate have not performed well this year and are expected to continue at a loss for some time.  Your child's account may or may not be taking a loss - it depends on several factors: the type of plan you have; your child's age, and the type of investments included in your child's plan (also based on their age).

Either way, be sure.  Don't play around with the money you have saved for your children's education. Pull that statement out again and look at the total contributions line, the total earnings line, and the account balance.  If you are not earning anything and are taking a loss, it may be time to consider a different option.  Call the broker and inquire about what type holdings are included in your child's plan. You may be satisfied with what you have. 

For my particular situation, and at no cost, we changed from the managed allocation and 100% equity accounts to a safer, "guaranteed option" account that guarantees all the principal contributions plus a minimum 3% annual yield.

I sleep better knowing that the hard earned money I sacrifice for my son's education is no longer at risk during these turbulent economic times.

Rest well,

Dina Perry