The time has finally come to ship the kids off to college, which means it's also time to scramble together money for tuition, dorm costs and books.

Enter the lure of investing, where money hopefully begets money. For parents who want to generate extra income to ease college costs, it may be time to put together a short-term investment portfolio for the next six to 12 months.

Short-term investing is all about minimizing the downside because you don't have that longer time horizon to smooth out market bumps, says Neal Frankle, president of financial planning firm Wealth Resources Group.

"If you take a huge risk, the return could be great, but you could also lose 10% if the capital goes against you. That could make a huge difference in your money, and you won't have time to offset the loss," Frankle says.

That means you shouldn't attempt to jump in and out of stocks. But you can park your money in investments that will help generate extra income to pay for costs ranging from cafeteria plans to tuition over the next year. Here are five ideas, from mild-mannered to higher-risk, for the college parent's short-term portfolio.

Cash Cow

Though its yield might not pay for much more than a semester of books, the money market fund is the go-to option if for investors who want extra income with the least amount of risk.

Peter Crane, president of money market and mutual fund research firm Crane Data, notes that while there are funds and bank savings accounts that both yield more than 5%, money markets can offer more flexibility than high-yield savings.

"You can access your money, and if you know you may need it in six months or so, that extra percentage point you could get with a less liquid CD is not going to make a difference," says Wealth Resource Group's Frankle.

Crane says to look for a fund that has no fees, a yield above 4% and features like check writing for access to your cash. Based on these criteria, one option would be ( VMMXX) Vanguard Prime Money Market Fund , which has a 5.10% yield and a stable $1 share price. It has an initial minimum of $3,000, no maintenance, purchase or redemption fees, and it comes with check-writing privileges.

Bank-Loan Funds

Bonds don't generate a lot of excitement, but they're good for short-term investors who are wary of the downside. But for higher yields than typical bond funds, it could be worth looking into a loan-participation fund, also called floating-rate or bank-loan funds.

These funds invest in loans issued by banks, mostly to distressed, non-investment grade companies. Since there is a greater risk of default to these companies, the interest rates on the bonds are higher than usual.

S&P's leveraged loan index, which started in 1992, has never had a year of negative returns, points out Tom Brandt, one the portfolio managers at the ( XNASX) SunAmerica Senior Floating Rate fund. "The index has averaged around 6.5%, so it's not knocking the cover off the ball ... but you have good stability," Brandt says.

Rob Brown, chief investment officer at Genworth Financial Asset Management, says to watch out for credit risk. "So often when people say, 'What can I do to generate income?' they end up pushing lower down on the credit-quality scale and enter the junk-fund arena ... one of the most overexposed of any asset category out there," says Brown.

In general, though, these loan-participation funds are considered safer than high-yield bonds because these loans are senior in the capital structure. In other words, in the event of default, bank loans get paid before bondholders get paid and are also collateralized by the issuer.

Dig for Dividends

Financial planners are quick to point out that if you only want to invest for a short period of time, stocks aren't the best option due to their inherent riskiness.

But high-yield stocks might be a place to look for investors who want higher returns than fixed-income investing because they pay a regular dividend even if the shares take a hit. Moreover, most dividends paid out by securities held for more than 60 days have just a 15% taxation rate.

"You could build a nicely diversified portfolio of stocks restricted to those that qualify for the 15% tax rule ... which would give a fairly handsome after-tax return," says Brown.

Genter believes that all high-dividend stocks will, at the very least, maintain that margin through the end of the year.

But beware of conventional high-yield traps. "When people are looking for yield, they may too hastily just look for the highest-yield areas," says Brown. For example, this could attract an investor to REITs, which Genworth considers "overstretched and overrun" and "easily due for a pullback."

Exchange-traded funds can help mitigate the risk of being exposed to a single high-yielding sector. The Wisdom Tree High-Yielding Equity Fund ( DHS), iShares Dow Jones Select Dividend Index Fund ( DVY) and the streetTracks SPDR Dividend ETF ( SDY) look at dividends rather than market cap to determine their components.

A Healthy Defense

The past few months have seen a retreat to less-risky investments amid the stock market's volatility.

Consumer staples and stocks like Johnson & Johnson ( JNJ) are popular defensive plays, but David Briggs, head of equity trading at Federated Investors, likes health care further down the road.

Health care may seem like an overplayed name in the defensive world, and it has gotten lots of play as another way to make money on aging baby boomers. But political saber rattling over health care during the midterm elections could help health care providers.

"Health care will be hemmed in by upcoming mid-term elections," Briggs says, but he sees upward movement in the sector if the leaders who take power look like they will seriously focus on ways to cut health care costs.

That means short-term traders could see a pop in their investments after the November elections, with little downside if the elections don't go in their favor.

Money in the Bank

Dan Genter, President and chief investment officer at money management firm RNC Genter, says that financials are a sector to watch in the near term because the stocks have felt pressure from the long string of Federal Reserve rate hikes.

"There was a general perception that as interest rates rose, bank margins would be compressed, and the companies would make less money," says Genter. "But that headwind is beginning to subside... there's been a change, to some extent, in reality. More importantly, there's been a change in perception when it comes to financials ."

If bank stocks do get a near-term boost from the end of rate hikes, then look for companies trading at relatively cheap levels, with, again, a decent yield. For instance, Bank of America ( BAC) and Citigroup ( C) are trading at around a reasonable 10.5 times forward earnings. Both deliver a 4% or more yield.

"These are securities that generate money market type cash flows; and so far this year, high-dividend, high-yield stocks have generated about 2% above what the S&P 500 has delivered," says Genter.

Education is expensive, but parents should take heart. The Census Bureau shows that people with a bachelor's degree earn over 62% more, on average, than those with a high school diploma.

So as your short-term, long-term and everywhere-in-between returns go to pizzas, spring break travels and hopefully a little learning, it should all pay off in the end.

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