Whatever investments you select, it is wise to kickstart your plan by making periodic investments. It is a long-term plan that involves investing a set amount of money at set intervals. Dollar-cost averaging enables you to buy shares of an investment at various prices. This can minimize the impact of market volatility on your portfolio and, more importantly, lower your average cost over time. Buy shares in good times and bad, regardless of market conditions.
Consistency is crucial.
Avoid the temptation to invest less when markets are down and more when markets are up. Before employing this strategy, consider your financial ability to continue to buy shares during bear markets. Another strategy for college planning is to open a special tax-favored account in your child s name. Unearned income includes interest, dividends, capital gains and other earnings from investents. Be aware that you cannot take the money back.