Expert: Dr. Joseph de Beauchamp - 12/6/2005

Question
Like most people I was sorely prepared for the costs of college now that my daughter is graduating...fortunately she is very interested in a number of affordable public schools -that will cost little or nothing...

...to make up for my lack of prep I am looking to invest $10 - $12 K a year for her so when she finishes her college years she'll have invested some $40 - $50 over four years as opposed to taking on that type of debt with student loans...

My question where's the best place to put the money for her?  Not interested in product recommendations; but rather which types of products (mutual funds; DRIPS; etc) and strategies would maximize returns and minimize tax liability for her?

She'll be 17 in January, graduates HS in June 2006; college May 2010. Would a minor/custody account be better? Just not sure?

Thanks in advance.

Answer
Jack,

A good mutual fund that you could select from Morningstar at the public library would be in order. Cash is also okay, even though it does not pay much nowdays. I would not go out beyond these two areas for more creative ideas. Most of those do not work, and the risk is far too high. A good long term mutual fund with international broad selection of stocks and bonds will probably out perform the cash investment accounts.

Dr. Joseph de Beauchamp