• The Fallacy of Cookie Cutter Asset Allocation: Some Evidence from 'New York's College Savings Program'

      Spitzer, John J.; Singh, Sandeep; The College at Brockport (2001-01-01)
      In this paper. we establish why ''prefabricated'' asset allocation schemes mandated by some education savings programs might be suboptimal. Then. using the New York's College Savings Program a an example, we simulate and then compare end of period wealth accumulated in both a tax preferred but regimented asset allocation plan, and in a nontax protected plan. We find. first. that the longer the child participates in the plan. the greater the benefit. Second. participants in higher tax brackets derive greater benefits; adherence to prespecified asset allocation for low tax bracket investors often results in return loss that overshadows the tax benefit.
    • The Fallacy of Cookie Cutter Asset Allocation: Some Evidence from 'New York's College Savings Program'

      Spitzer, John J.; Singh, Sandeep; The College at Brockport (2001-01-01)
      In this paper. we establish why ''prefabricated'' asset allocation schemes mandated by some education savings programs might be suboptimal. Then. using the New York's College Savings Program a an example, we simulate and then compare end of period wealth accumulated in both a tax preferred but regimented asset allocation plan, and in a nontax protected plan. We find. first. that the longer the child participates in the plan. the greater the benefit. Second. participants in higher tax brackets derive greater benefits; adherence to prespecified asset allocation for low tax bracket investors often results in return loss that overshadows the tax benefit.