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Glide Path

What is a glide path?

A glide path is the pace at which a target-date fund or age-based 529 shifts from riskier securities (like equities) to less-risky securities (like bonds or cash.)

Investments with glide paths help investors fund specific goals, like college or retirement. If markets sell off just as the goal date approaches, you’re better positioned because most of your money has shifted to safer areas of the market.

We prefer glide paths with smaller, more frequent stock and bond allocation shifts. Smoother transitions expose your assets to less market risk. They have also been shown to lead to less-volatile returns for investors while offering some minor downside protection.