Mutual Funds/529 account


Hi.  I have a 529 account from T Rowe Price (Maryland) that is enrollment based, meaning set to be used in 2015.  I'm concerned about stock market volatility and would like to move it to a portfolio  option where it will not lose value.  The conservative options are a US treasury money market portfolio, an inflation based bond portfolio, and a bond & income portfolio.

With today's market being so crazy, talk about a bond bubble, zero interest treasuries, and the like, I'm a bit confused as to what is a safe place i can keep the money and not lose it.  It seems like the old rules about bonds and treasuries being safe no longer applies.  Where would you put money you will need in about 1 year?  Thanks!

Hi. To clarify, will all of the funds be needed in 2015 or will just the first portion be needed for year 1 of college? Reason I ask is there may be a difference in strategy if your time horizon is actually 1 year vs having needs over the course of the next 2 - 5 years. In any instance, of the options mentioned, the US Treasury Money Market is the safest. The other options will carry interest rate risk as well as credit quality and stock market risk. The biggest risk associated with the US treasury money market would be if T Rowe Price mismanages this account and the end result is the money market value drops below $1 per share. If this were to happen, which is unlikely, then this type of loss would presumably by far less than other risks that are out there. I hope this helps.

Mutual Funds

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John D Smith, CFP


I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related comprehensive wealth management and investment concerns.


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