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A brokerage 529 can invest in anything yes, but the fees will eat you alive. I am citing the performance of our state 529 (which is actually pretty good). Their returns in their various funds dating back to around 2001/2003 (different inception dates) range from -3% to 4.5%. If you are a good market timer, then maybe you could have done better. Most folks can’t do any better than active money managers (most of whom underperform the 500 index). Maybe I should go with the managed option for my state, but I just don’t think I can do much better than the funds which I have selected. It is easy to look back and say you should have been in here and out there, but it is a whole lot harder looking forward. Also the one move per year restriction still applies as best as I can tell even for brokerage/advisor 529s. The state plan already gives me about 7.5% of investment off my state taxes for the deduction, so I don’t think going outside my state plan would make any sense.

To give you an idea of how bad it is the guaranteed tuition inflation adjusted CD from the Idaho 529 is tuition increase minus 3%. Assuming a 5% tution growth rate, then in 18 years the money you have saved will only pay for 60% of tuition that could had been purchased when the money was first saved.

So do you think stocks are going to continue to rise. I don’t, and I am light in equities right now for that reason, but I don’t know what will happen. Do you?