Now that you’ve taken the first step toward savings for your child’s college education, the next step is making that money grow through investing. Investing your money means taking reasonable risks (see our Top 6 investing strategies below) in the hope of achieving your financial goals through the power of compounding.

The power of compounding
Even at relatively low returns you can double and triple your money over long periods of time with the power of compounding. Compounding occurs as you continually reinvest your returns and those returns earn their own returns, and so on. The longer you invest, the more startling the effects of compounding can become. For example, you only need a 7.1% annual return to double your money in 10 years.

Top 6 investing strategies
1. Spread the risk using asset allocation
You can't predict which way the markets will move—or which investments will go up or down—but you can spread the risk around by investing in a mix of stocks, bonds and cash investments and diversifying your investments within each of those asset classes. This is called asset allocation, and it can be the single most important factor in achieving investment success.

With asset allocation, when some investments aren't growing—or are even falling in value—other investments may carry the day, helping to even out the ups and downs of your total portfolio.

2. Determine your personal investing style
Some people can shrug off big market swings; others cannot. If you are uncomfortable when the value of your investments changes dramatically, you need to build a portfolio with a more conservative mix of assets and, if you can, increase your savings rate to increase the chances of achieving your goals. You may not reach your goals quite as fast, but you'll likely be more comfortable along the way.

The asset allocation strategy that's best for you depends on your investment profile, which is a reflection of your risk tolerance and number of years you have to save for your goal. Follow the link at left to the Risk Tolerance Questionnaire to help you determine your personal investing style.

3. Save regularly
Successful savers are successful because they save and invest regularly. Saving for a college education is just like planning for any major purchase. Start by making saving a habit—then try to save more each month or year. Write down everything you spend over a month or two, and look for painless ways to cut back your expenses. You may not realize how small amounts invested regularly can really add up with the power of compounding. (Switching from the corner premium coffee shop to the office percolator, for example, can save you $800 a year!) Saving regularly is easy when you sign up for automatic saving plans like payroll deduction or electronic funds transfers (EFT) from  your bank account

4. Reevaluate your savings portfolio annually; change your asset allocation as your child grows
When your child is young, you can afford to pursue investment options that involve a little more risk but which offer a potentially greater return, since you have time to change strategies and weather market downturns. When college approaches, however, you should consider moving the money into safer, more liquid form. Reevaluate your investment options at least once a year. One feature of 529 plans is the ability to reallocate, or exchange, your investment option assets on a limited basis each year. If you find that the assumptions behind your investment strategy have changed, or your risk tolerance has changed, you may want to change your investment option allocations.

While reviewing your asset allocation, also evaluate the amount you are investing – is it on track with achieving your goals?

5. Keep costs down
If you're a careful shopper, you know you generally get what you pay for. When you're investing, however, high costs don't always mean you'll get more for your money. High costs can actually reduce how much of an investment’s returns you get to keep.

Suppose you have $50,000 to invest. You invest half in Option A with an expense ratio (annual asset-based fee) of 1.3%, and you invest the other half in Option B with an expense ratio of 0.3%. Assuming an 8% rate of return, in 20 years Option A will return $19,751 less than Option B.

CollegeAdvantage has some of the lowest fees among 529 plans across the country. You pay no application fee, no annual account maintenance fee, no front loads and no contingent sales charges for the CollegeAdvantage 529 Savings Plan. The annual asset-based fees for the mutualfund-based options can be as low as 0.19%, and there are no fees for the Fifth Third 529 products.

6. Pay attention to taxes
One of the most significant factors investors tend to leave out when assessing their investment returns is the tax consequence. Even if you have a long-term capital gain that is only taxed at 20%, a 10% return quickly becomes 8%. And for short-term gains, the tax bite is even greater. Tax-free savings vehicles, like 529 plans, automatically increase your return on investment simply because you will not have to subtract taxes out of your earnings when the funds are used for college expenses.

Next: Stocks, bonds and cash investments