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rhellyer writes (in part):

Right now we have aside, let's say, 20K in a mutual fund in an UTMA for her, and we have 80k that we could invest now for drawing out over the next 5 to seven years.

I reply:

If you're comfortable that your college savings are where they need to be, with inflation taken into account, then you want to go conservative. I'd suggest something like a T-bill ladder -- i.e., put the money you'll need in five years in a five-year treasury bill.

If you have some concern that you're not quite where you need to be, you might want to take on a little risk. For example, were I in your situation, I'd be inclined to put the money earmarked for five years out and further into the stock market. If the market rises in the next year, take out a year's worth of money. If the market sinks, wait another year. The risk there is that of a sustained (five years or longer) bear market.

If your daughter is financially astute, you might want to give her some input on the decision. If you go that route, though, both the risk and reward should probably be hers. In other words, if her proposed plan ends up falling short of her needs, she needs to work or borrow to make up the difference. If she makes more than she needs, she gets to keep the difference. --Bob
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