Understanding NextGen 529 College Savings & Market Volatility

Riding Out Market Ups and Downs

We know you don’t have the power to predict or control the markets and economy. However, you do have the power to control how much you save and the diversification of your investments. When market values take a dip, having sound 529 plan risk management strategies in place can make all the difference.

Diversification & Rebalancing

Diversification means not putting all your eggs in one basket—you spread your money across different types of investments to help reduce risk. Rebalancing is like a regular check-up for your portfolio, making sure everything stays in line with your goals. Both are ways to help keep investments on track and manage risk over time.

Dollar Cost Averaging Can Help

Many parents find that dollar cost averaging¹ in 529 plans brings peace of mind during market uncertainty. This simply means making consistent contributions on a regular schedule, regardless of market conditions. When prices drop, your contribution buys more shares; when prices rise, you purchase fewer. Over time, this approach can help smooth out the effects of market swings and potentially lower your average investment cost.

Investing in a NextGen 529 college savings plan and setting up regular contributions – even in small amounts – can potentially add up to big savings down the road.

Align Your Strategy to Meet Your Goals

Consider periodically assessing your investment choices with your time horizon, risk tolerance, and investment objectives in mind. NextGen 529 gives you flexibility—you can change existing investments twice yearly and adjust future contributions anytime.  Making use of these options can help you keep your investments aligned with your goals.

How Can I Protect My Investment Right Now?

• I have a Select Account – This is a great time to speak with your advisor. The Client Select Series has a wide array of investment choices to allow you and your advisor to customize a plan to work best for you.
• I have a Direct Account – Consider reviewing your account to make sure your investments are adequately diversified to meet your investment objectives.  If you wish to change your existing investments, please review the Client Direct Series Program Description and the Client Direct Investment Change Form.
• I have a Connect Account – If your investments are in a Year of Enrollment Portfolio,  check that the portfolio name reflects the year closest to the time you anticipate using the funds for the first time.

Are There Any Investment Options That Are FDIC Insured?

Yes! Check out the NextGen Savings Portfolio. It’s an FDIC-insured option for savers seeking stability during market volatility. Existing investments can be changed up to 2x per year, and future contributions can be changed at any time.

What If My Matching or Alfond Grant Values Decrease?

Great question. All grants are invested and will experience changes in value over time. Alfond Grants are owned and invested by the Alfond Scholarship Foundation. Maine Matching Grants are owned and invested by FAME. Plan to check the value of grants next quarter to see and monitor changes.

The Bottom-Line: Focus On Long-Term Strategy

It’s natural to feel uneasy when markets are unpredictable—but letting short-term emotions drive your decisions can lead to missed opportunities in the long run. A well-considered investment strategy and a steady approach can offer a sense of stability during uncertain times.

History shows that parents and grandparents who stay focused on their long-term education savings goals and implement long-term strategies for 529 plan growth are often better positioned to benefit when markets recover. While no one can predict exactly what will happen, keeping your eyes on the big picture can give your student a stronger chance at a future with less student loan debt.

With a NextGen 529 account, setting up regular contributions—even in small amounts—can go a long way over time. It’s a simple step that may add up to big savings down the road.

¹Dollar cost averaging and other periodic investments do not ensure a profit and do not protect against loss in declining markets. Such a plan involves continuous investment in securities, regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue their purchases through periods of high or low price levels.