An all-in-one fund that automatically shifts from stocks to bonds as a target retirement year approaches. Great default inside 401(k)s; less ideal in taxable due to capital gains distributions.
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Related terms
A fund that passively tracks a market index (like the S&P 500). Low fees, broad diversification, and the core holding for most FIRE investors.
Earning returns on your previous returns. At a 7% real return money doubles every ~10 years — the engine that makes FIRE possible.
Periodically selling overweight assets and buying underweight ones to return to your target allocation. Forces "buy low, sell high" mechanically, without prediction.
A fund that trades on an exchange like a stock. ETFs often track an index, have low expense ratios, and can be bought and sold throughout the trading day.
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