Glide Path
Also known as: Lifecycle Investment, Target Date Strategy
Investment strategy that automatically reduces risk exposure as you approach your financial goal date.
Detailed Explanation
A Glide Path is a systematic approach to asset allocation that becomes more conservative as you approach your goal. For example, a 10-year goal might start with 80% equity and gradually reduce to 20% equity in the final year. This helps manage sequence risk - the danger of poor returns near your goal date. Target-date funds and lifecycle funds use glide path strategies automatically.
Related Calculators
Related Terms
Asset Allocation
Strategic distribution of investments across different asset classes like equity, debt, and gold.
Sequence Risk
The risk that poor investment returns occur near or during your goal date, severely impacting your outcome.
Rebalancing
Periodic adjustment of portfolio to maintain target asset allocation by buying/selling assets.