Investment Strategies for Target Date Funds
What Is a Glide Path?
A glide path is the plan that a target date fund follows to automatically adjust its mix of stocks and bonds as it gets closer to its target date. This helps investors by making their portfolio more conservative over time to reduce risk. There are different types of glide paths, such as declining, static, and rising. Each of these types of glide paths offers investors a different strategy for how investments are managed as goals approach.
Key Takeaways
- A glide path adjusts the asset mix of a target-date fund as the target date approaches, becoming more conservative over time.
- Target-date funds are ideal for those planning for retirement, adjusting risk levels based on the investor’s age.
- Declining glide…
