Investing in a 529 plan can be a great way to save money for your child’s college expenses. About 32% of parents’ savings for children’s college expenses put money into 529 plans during 2009, up from 30% for 2008. Every state except Wyoming offers at least one plan; many states offer more than one plan. Investors are not required to invest in their home state’s plan. However, by sticking to a plan offered by one’s state of residency, the investor may be entitled to an upfront state tax deduction. For example, you can live in California, invest in a 529 plan for Vermont, and end up using it for New York.

The most common investments for 529 plans are those tailored to a child’s expected date of matriculation or the family’s appetite for risk. Under IRS rules, 59 plan investors could only make one change per year; in December of 2008, the IRS stated plan holders could now make two changes per year. You can set up an annuity to invest in your 529 plan. A good way to be sure that the interest rate for your payments remains the same is to have an annuity certificate. An annuity certificate ensures that your interest rate will be the same no matter how long the investment lasts.

Another lucrative investment can be found in foreign securities. Foreign securities are any security in foreign currency in stocks, bonds, debentures, shares and other forms. Annuity education can inform you and show you how to invest in a foreign security successfully. It’s important to understand how it works and how to invest directly on a foreign exchange. An annuity education can help with this sometimes complicated information. For example, you may want to know first why it’s even a good idea to own a foreign security.

Investing directly on a foreign exchange is not the only way to gain exposure to international shares. Take American depositary receipts (ADRs), which are certificates corresponding to a certain number of shares of a foreign company. ADRs trade on U.S. exchanges providing investors with timely dividend payments and widespread information, but sticking to ADRs limits your universe to the large, multinational firms that tend to issue the securities (about 3,200 foreign firms currently list in the U.S.). ADRs are priced in U.S. dollars, so they mute the effects of exchange-rate fluctuations-one of the arguments for investing in international stocks.

The U.S. share of exchange-based global market capitalization has been falling, from 52% at the end of 2001 to 35.2% as of September 2007. As of January 2009, roughly 40,000 stocks traded in foreign exchanges-compared with about 6,000 on the NYSE and NASDAQ.

At one time, sticking to the domestic market ensured the world’s greatest quality of management, accounting standards, and transparency. But much of the world has caught up: Today more than 1,500 of the world’s largest 2,000 companies are domiciled outside America’s borders, including industry leaders such as Nestle, Toyota, HSBC, Royal Dutch Shell, and Samsung.

While foreign markets have some unique investing risks-some regions are more volatile and can have the potential for faster gains or losses-they have also been home to some of the largest returns over specific periods of time.

International markets historically have been much more likely to produce outsized returns than U.S. stocks-or other assets, for that matter. Of the 50 top-performing stocks in the MSCI All Country World Index through March 31, 2009, 40 were foreign. Foreign countries have a much more favorable macroeconomic outlook than the U.S.-which could provide the backdrop for greater stock returns. U.S. GDP is expected to grow 1.5% during 2010, compared with 3.1% for the overall world economy.

As you can see, there is a lot of research and information to understand before investing in any plans or securities. To make the best decisions, you should attempt to simplify the information and understand what works best for you and your financial situation in the end.

Author Bio: Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about annuity certificate, annuity education visit http://www.icfs.com

Category: Finances
Keywords: annuity certificate, annuity education