[SamR]

Hey folks, my kids RESP investments have really taken a hit - no surprise given what's happened to the markets since Dec. I have them invested in 100% equities (TD e-series). One child is almost 5 the other almost 8. So given their youngish ages, I went aggressive. Is it time to shift to a more conservative mix? Thoughts?

Thanks kindly in advance!

Cheers.

 

[Thal81]

You don't need the money for about 10 years for the oldest one, so no. It should come back and grow a lot by then. Now is the worst time to switch to a more conservative mix.

What you should do is make sure this a situation doesn't happen right before your kids need this money. So maybe 5 years before they go to college/university, reduce your stock allocation substantially. I would not even hold any stocks or bonds when you're ~2-3 years out, just go all GICs.

 

[Plugging Along]

I would just leave it. I have been aggressive with my kids RESP's since birth, my oldest is 16 and will be withdrawing in two years. We are still in 100% equities. It's been hard to watch it drop, but both my kids have plans for long education careers (at least a masters level each), so if there are drops, we will help out those years with our own cash reserves.

 

[londoncalling]

I would agree to not make any moves now. If anything you could put future contributions into more conservative investments but I would not sell. Be comforted by the fact that the government top up already provides a good return. People tend to forget that the time spent in postsecondary adds a number of years to the time that some of the money is invested. We are not making any changes to my son's RESP allocation at this time and he will be finished high school in 5 years.

 

[ian]

Our oldest grandchild is 7. 100 percent equities with absolutely no plans to change the allocation.

IMHO, now is the time to stick. And depending on your age and risk tolerance it is a great time to buy.

We have been through a few of these. Each time I have been tempted to sell. Fortunately I listened to my spouse's advice. Hold and/or increase equity holding. I followed her advice with a great deal of trepidation at times. It turned out to be excellent financial advice.

At the end of the day you have to do what you feel is best for you.

 

[Ponderling]

I went with half into GIC ladder once the oldest one hit 16 years old. That was about 6 years ago.
Otherwise it was in MAW104 for the prior dozen years once I got it going self directed.

 

[MrMatt]

I went with half into GIC ladder once the oldest one hit 16 years old. That was about 6 years ago.
Otherwise it was in MAW104 for the prior dozen years once I got it going self directed.

I think this is a good plan, though you should consider when they're starting school.
I actually moved my oldest into a more balanced allocation

 

[MarcoE]

My kid's RESP is conservative. I don't like being too risky with money I'll need within 10-15 years. I make up for it by being more aggressive with money elsewhere. I see saving for a kid's education to be like saving for a new roof, new car, home renos... it's money I need for a specific purpose, so I don't want to take too much risk with it. That said, with bonds (the "safe" asset) declining so much lately, one could make a case that stocks aren't much riskier.

 

[Ponderling]

The other thing I did was to put 3k in per kid per year.

And then with each bonus at work I got I would bump on that.

Left just enough for 2.5k for a few years near end to get all cseg match I could.

Ended up with effectively 50k in for each by when they were 12 years old this way.

 

[AltaRed]

The one for our granddaughter is relatively conservative since we are only contributing to the extent parents cannot. We are collectively sticking to $2500/year to obtain maximum CESG and no more. We will stop contributing when parents can up their game. Currently a combination of MAW104 (what we started with) and now VGRO. We have no concerns about the current market declines. We have had exceptional markets for the past 3 years.

The goal/objective is to take optimum advantage of CESG for a 20% return off the top. Nothing more. If the RESP can fund about 4 years of post-secondary supplemented by summer jobs, that would be considered an outstanding success.

 

[banjopete]

Grandparents helping parents is very generous and fortunate for all involved including the kids. We're trying to max ours out for our kids 7 and 4, and are also all equities ETF, no plans to change the path any time soon, probably won't really even consider until they're driving age.