1) Portfolio Gain and Loss: This is a general question designed to elicit the overall risk and return characteristics that you would prefer. The form of the question illustrates that there is a trade-off between risk and return.

This is a general question designed to elicit the overall risk and return characteristics that you would prefer. The form of the question illustrates that there is a trade-off between risk and return.

If you had $20,000 to invest for a 10 year period, which portfolio would you prefer?

a. No risk/low return. One which may be expected to grow 3% per year in most years and have no years with a net loss.

b. Some risk/medium return. One which may be expected to grow at an average 5% per year, but is likely to lose 10% in one of those years.

c. Higher risk/high return. One which may be expected to grow at an average 7% per year, but is likely to lose 20% in one of those years.

d. Highest risk/highest return. One which may be expected to grow at an average 10% per year, but is likely to lose 25% in at least one of those years.

2) Portfolio Declines: This question goes to the heart of what we mean by Risk Tolerance -- the ability to stay the course in the face of declining portfolio values.

This question goes to the heart of what we mean by Risk Tolerance -- the ability to stay the course in the face of declining portfolio values.

Let's say your total 529 portfolio declines in value by 15% in one year. When you selected this portfolio, you believed it was the most appropriate for your education funding needs. Which of the following are you more likely to do?

a. Change the Portfolio. If a portfolio goes down 15%, it's obviously too risky for me. This would keep me awake at night.

b. Stay the Course. I have a long-term perspective for my college funding assets. I understand that my portfolio can decline in the short term, but I'm willing to accept these short term losses if that's what it takes to earn a higher long-term rate of return.

3) Fund Declines: This question focuses on how you think you would react when a single investment goes down in value, within a portfolio that is otherwise doing OK.

This question focuses on how you think you would react when a single investment goes down in value, within a portfolio that is otherwise doing OK.

Let's say one of the individual funds in your portfolio loses 15% of its value over a year. What would you do with the fund?

a. Sell the Fund. I'd be too uncomfortable if it went down even further.

b. Stay the course. If I believed I had the right strategy, I wouldn't change it because of short-term market performance.

c. Buy more. If I believed it was a high quality fund, I'd consider it even more of a bargain at a lower price.

4) Staying Power: This question is designed to confirm your investment time frame, a key element in enrollment year portfolios.

This question is designed to confirm your investment time frame, a key element in enrollment year portfolios.

Your ability to take risk is partially a function of your investment time frame, so it's important to know if external factors might cause you to terminate your program prematurely. How likely is it that you will be able to keep all your contributions in the plan until the student begins college?

a. Unlikely. I can think of a number of reasons why I might not maintain the plan for the full period contemplated.

b. Somewhat doubtful. I can envision certain situations where I would need to take money out of the plan early.

c. Very likely. I have adequate insurance coverage and emergency funds set aside, so it is unlikely I would need to terminate the program prematurely.

5) The Risk-Return Trade-Off: This question requires you to say whether it is more important to try to achieve the goal you have in mind or to manage the volatility (the ups and downs) of your portfolio along the way.

This question requires you to say whether it is more important to try to achieve the goal you have in mind or to manage the volatility (the ups and downs) of your portfolio along the way.

Check the statement that better describes how you view the risk-return trade-off.

a. The most important thing is to keep annual volatility (declines in value) within a comfortable range, and then to accept whatever results this strategy produces.

b. The most important thing is to try to achieve the goal I have in mind, and to accept whatever volatility (or declines in value) occurs along the way.

6) How Important Is It To Hit Your Goal? To the extent that you say that achieving the goal you have in mind isn't absolutely critical, the less aggressive we need to be with your initial asset allocation.

To the extent that you say that achieving the goal you have in mind isn't absolutely critical, the less aggressive we need to be with your initial asset allocation.

Check the statement that better describes the importance of meeting your goal.

a. Important, but not critical. I would like to accumulate as much as possible towards my goal, but if I don't make the goal I have in mind, other resources are available. I may be earning more in my career, other family members may volunteer to help or my child may qualify for scholarships or other assistance.

b. Very important. If the goal I have in mind is not achieved, more borrowing for tuition payments may be required than I am comfortable with. I do not want to incur extensive loans that may impact my ability to save for my own retirement after my child starts college. Neither would I like to burden my child with extensive loans that would have to be repaid soon after graduation.

7) Pattern of Future Contributions: This question focuses on the pattern of your planned future contributions. Regular contributions create a form of income averaging, which reduces overall portfolio risk and thereby allows you to adopt a more aggressive initial allocation.

This question focuses on the pattern of your planned future contributions. Regular contributions create a form of income averaging, which reduces overall portfolio risk and thereby allows you to adopt a more aggressive initial allocation.

Adding funds to your account periodically reduces overall portfolio risk (because you would buy more shares if share values were lower). Which statement best describes your plans?

a. I do not plan to make future contributions to this account.

b. I plan to make contributions as I am able, but probably not every year,

c. I plan to make annual contributions of about the same amount each year.

8) Starting Capital vs. Planned Future Contributions: This question focuses on the amount of your first year vs. future year planned contributions. The more money that will be put in during future years, the more aggressive you can make your initial asset allocation.

This question focuses on the amount of your first year vs. future year planned contributions. The more money that will be put in during future years, the more aggressive you can make your initial asset allocation.

Of all the money you plan to invest in this plan, what portion will you invest in the first year?

a. 100% (everything in first year, no future contributions)

b. 76 to 99%

c. 26 to 75%

d. Up to 25%

Your Risk Tolerance is

CONSERVATIVE

MODERATE

AGGRESSIVE

These questions are made available to you as educational, self-help tools and are intended to provide you with a basic guideline to help you create a savings and investment plan for your college savings funds. This is not a comprehensive guideline; it does not give specific investment advice, such as directing you to buy a specific investment portfolio or specific stocks or bonds. This questionnaire and its results should not be the sole or primary basis on which you make your investment decisions.

Important Information About This Questionnaire

These guidelines do not constitute investment advice. As your financial situation changes, you should review your investment goals, time period for college investing, and personal financial situation and reassess whether you are saving enough to meet your college savings goals. You may want to consult with a qualified advisor before making an investment.

The results presented are hypothetical illustrations and do not reflect the past or future performance of any specific investment. Rates of return will vary over time. Investments which seek to achieve higher rates of return are more volatile and involve a higher degree of risk.

The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. It was written to support the promotion of college savings plans. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

Account value will fluctuate based upon a number of factors, including general financial market conditions.