- Brent Hunsberger, firstname.lastname@example.org
January 14, 2014
Eric Hutchinson has been saving for his daughter’s college education for a dozen years. But in April, the Tigard resident decided to take advantage of the Oregon College Savings Plan‘s tax break.
He put $5,000 in the plan’s Age-Band 16 portfolio for 16-year-olds, which will automatically adjust his investment into more conservative holdings as his daughter Noelle gets older.
So, he was a bit surprised when he looked at the account balance just after New Year’s and found it held $4,980. Hadn’t it gained anything from the year’s run-up in stocks?
Our Response & Your Comments
How could your lose money in a year when virtually every stock market index shot through the stratosphere?
It’s simple – Trust it to the government.
To be fair, government college savings programs lost money because they are understandably conservative and become more so as students approach college age, so they skew towards bonds.
But there are a few simple truths here.
First, when you trust your money to the government you lose control over it, so you can’t start out conservative in Jan. and in March say “Stocks are the place to be, so I’m switching to them.”
Second, government programs are top down, rigid, one-size-fits all programs. And if they don’t fit you, it’s just too darn bad. Think ObamaCare, Cover Oregon, etc.
The final lesson: Nobody watches your money like you watch your money. Carve this into your dining room table and never forget it. Especially when dealing with the government.