Charleston West Virginia Economic Development

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Friday, October 02, 2009

Staying Smart in a Volatile Market
SMART529, West Virginia’s College Savings Solution

SMART529, West Virginia’s College Savings Solution, is a program of the West Virginia State Treasurer’s Office

Nearly everyone is aware that the stock market has been volatile in the past year, but what many people don't know is that markets like this one can be a very good investment.

Of course, you first need to take time to review basic investment principles and make sure you can pass the economic volatility test.

Principle 1: Diversify

Spreading money among different types of investments, i.e. stocks, bonds and cash, does not ensure a profit or protect you from a loss, but it can limit your risk. If one investment loses value, others may offset those losses with gains.

SMART529 makes it easy to diversify your investment. SMART529’s Age-based and Static portfolios offer a variety of investment options to choose from depending on how much time there is between now and college, and your own tolerance for risk.

Principle 2: Keep investing

During times of financial volatility, your first instinct may be to withdraw your money and stay away from investing all together. But you should take the time to reconsider. Why? Because regularly adding to your investments—even during times of market ups and downs—may put you in an advantageous position when the market becomes more stable and begins to make gains again.

With SMART529, starting early and continuing to invest can help you maximize your college savings potential.

Principle 3: Be vigilant*

You should always keep track of your investments and how they are performing, especially in volatile times.

When investing, you should set reasonable expectations and regularly monitor your investments to see if your expectations are being met. Of course, you also have to keep the current market conditions in mind.

SMART529 makes it easy to monitor your account and to find out about regulatory changes, new investment options or enhancements to the program. You can log into your account or find out the latest program news at It’s a great tool to help you stay apprised of the current market situation and for tips on helping you save for your child’s college education.

*Two investment strategy changes are allowed in 2009, instead of the one time per year restriction.

If market worries still prevent you from investing in college savings :

SMART529’s Stable Value Option is the most conservative option in the program, and is available through both SMART529 WV Direct and The Hartford SMART529 Plans. This conservative investment portfolio seeks to maximize current income while preserving principal and delivering stable investment returns. It is very diversified, containing high-quality bonds and other fixed-income investments.*

*This option is subject to both credit and interest rate risk. Share price and yield will be affected by interest rate movements, with bond prices generally moving in the opposite direction from interest rates. Credit risk refers to the bond issuers' ability to make timely payments of principal and interest.

**See the Offering Statement for more information about this investment.

You should carefully consider the investment objectives, risks and charges and expenses of SMART529 and its Underlying Funds before investing. This and other information can be found in the Offering Statement for SMART529 and the prospectuses or other disclosure documents for the Underlying Funds, which can be obtained on this website or by calling toll-free (866) 574-3542. Please read them carefully before you invest or send money. SMART529 is distributed by Hartford Securities Distribution Company Inc. Member SIPC.

1West Virginia provides its residents with tax advantages for investing in SMART529. If you reside in or have taxable income in a state other than West Virginia, you should consider whether your state has a qualified tuition program that offers favorable state income tax or other benefits exclusive to your state's program that are not available under the SMART529 program. Taxpayers and residents of other states who are interested in exploring such tax consequences should consult with a qualified tax advisor.

2Non-qualified withdrawals are taxable as ordinary income to the extent of earnings and may also be subject to a 10% federal income tax penalty. Such withdrawals may have state income tax implications.

Investments in SMART529 are not guaranteed or insured by the State of West Virginia, the Board of Trustees of the West Virginia College Prepaid Tuition and Savings Program, the West Virginia State Treasurer's Office, Hartford Life Insurance Company, The Hartford Financial Services Group, Inc., the investment sub-advisors for the Underlying Funds or any depository institution. Investments in SMART529 are subject to investment risks, including the loss of the principal amount invested, and may not be appropriate for all investors.

Investments in SMART529 are subject to certain charges, which will reduce the value of your Account as they are incurred. Please see the Offering Statement for details of charges or fees that apply to the specific SMART529 savings plan.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

Lifetime savings maximum of $265,620 per child.

"The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries.

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