Why I Just Sold Nearly $160,000 of Stock: Ensuring College Funds for My Daughter

Why I Just Sold Nearly $160,000 of Stock

It's time to pay a major bill that I've been saving for over the past 18 years. Late last month, I sold nearly $160,000 worth of stock-based mutual funds and turned it all into certificates of deposit. That move was the largest single sale of stock based investments I have ever authorized. By making that move, I completely turned the account that held those funds to 100% cash-based holdings.

Why it was the right time to sell

The account I liquidated was my daughter's 529 college savings account. I sold because she's a senior in high school and is ready to pick the college she wants to attend. With that move, I now have a pretty good idea of how much I'll have available to help her cover those costs. In addition, I'll be able to write the checks to cover those costs by their due dates, no matter what the market happens to be doing at that time.

• Asset allocation makes it possible: Of course, the only reason that 529 account had nearly $160,000 in it is because I opened it when she was a newborn and had been contributing to it every year since then.

The key to that balancing act is knowing what you need the money for and when you need it -- and investing accordingly. Stocks may be appropriate for the long term, but they're very risky when it comes to covering near-term expenses.