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Michael Michaud
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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • How Individual Stock Investors Can Save For College 0 comments
    Feb 4, 2012 8:21 AM

    Morningstar Investment Research

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    February 04, 2012 - How Individual Stock Investors Can Save for College - by Morningstar Investment Research

    My wife and I are trying to save for college for our two daughters. However, I'm primarily a stock investor and don't like the idea of having to stick with a preset menu of investment options, as I'm required to do with a 529 College Savings plan. Is there an equivalent to IRAs for college savers that would allow me to invest in the securities of my choice?

    For better and for worse, the deck has been stacked in favor of 529 plans for college savers, according to Morningstar director of personal finance Christine Benz. However, the question points up the key drawback of 529 plans: Even though many plans offer broad suites of investment options, they don't give you the same latitude to select your investments that you might have within an IRA or brokerage account. Assuming you'd like to exert more control over your investments while also saving for college, you could consider the following options, or possibly some combination of them.

    For Retirement-Portfolio Withdrawals, Your Mileage Is Likely to Vary

    Managing one's finances in retirement doesn't lend itself well to straight-line analysis. You might retire into a good market or a weak one; you might decide that you're bored and want to go back to work or you may end up spending part of your nest egg to help grown children. Although guidelines like the 4% rule might be a starting point when gauging the via bility of your retirement plan, in reality, very few retirees maintain static withdrawal rates. Several studies have looked at how retirement-portfolio withdrawals might be adjusted upward or downward to account for market fluctuations. But retirees' changing personal situations and preferences might also drive varying rates of withdrawals during retirement. Of course, some scenarios can't be anticipated. But thinking through the range of possibilities is a key component of creating a realistic retirement-spending plan. As a follow-up to her article last week on the 4% withdrawal rate, Christine Benz offers some of the key variables to bear in mind when creating such a spending plan.

    Among the other topics we addressed this week:

    Caution: Objects in Your Retirement Portfolio May Be Smaller Than They Appear. Don't forget about taxes when assessing the viability of your savings and withdrawal rate.

    Huge Facebook IPO, Small Impact on Funds. Plus, Thornburg loses Growth manager and more.

    Investing in Facebook: An IPO for Fools? Investing in the Facebook IPO may not get you the returns you are looking for in the long run.

    The Skinny on the Most Recent Analyst Ratings. Funds from Vanguard, Fidelity, and Third Avenue go under the microscope.

    Would You Like Some Growth to Go With Those Dividends? These mutual funds don't give short shrift to business quality in their quest for stocks that show them the money.

    Keep These Dividend Payers on Your Radar. It's getting harder to find to find decent, sustainable income in the stock market, but these stocks fit the bill.

    Asking the Right Questions About Active ETFs. Everyone wants low-cost, transparent access to the best managers--you just need to ask them.

    Thank You for Smoking. Tobacco stocks lit a fire under certain international funds last year.

    India-Focused Closed-End Funds Looking Compelling. Two closed-end funds focus exclusively on Indian equities. When investors return to Indian markets, these double-digit discount CEFs should do well.

    Fourth-Quarter GDP Not a Trendsetter. Strong growth is likely to slow--temporarily--in the first half of 2012.

    IShares Rolls Out Seven Single-Country Developed-Markets ETFs on New Exchange. Plus, AdvisorShares and ProShares also launch new ETFs, and the week's best- and worst-performing ETFs.

    Chuck Akre on the Search for Compounding Machines. A growth maverick shares his ideas.

    Good, Bad, or Meh? Readers Rate Their 401(k) Plans. Even those satisfied with their 401(k)s can spot room for improvement; common wish-list items include index funds, more bond funds.

    Fed's New Projections Not That Useful. The Federal Reserve's newfound push for transparency is admirable, but of limited utility to most investors.

    Click the link above for a Free Trial of Morningstar Investment Research

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