Exercise 3: Why a Target-Date Fund's Glide Path Changes Allocation Automatically — Possible Solution
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This chapter's own real material on time horizon explains directly why
a fixed, unchanging allocation would eventually become the wrong one
for any investor approaching a specific real target date - and the
glide path exists specifically to correct for that.

WHY A FIXED ALLOCATION STOPS BEING APPROPRIATE OVER TIME
This chapter establishes that an investor's own appropriate allocation
depends heavily on time horizon - specifically, how much real time
remains to recover from a potential downturn like Chapter 8's own
real, 15-year dot-com bubble recovery. A young investor decades from
their own target date has substantial real capacity to hold a stock-
heavy allocation, since there's genuinely enough time to recover from
even a severe, prolonged downturn. As that same investor's own target
date draws nearer, however, that real capacity shrinks - a severe
downturn hitting close to the target date would leave far less time to
recover before the money is actually needed.

WHY A GLIDE PATH IS THE DIRECT SOLUTION TO THIS PROBLEM
A fixed allocation set once, at the start, would genuinely fail to
account for this shrinking time horizon - it would still be exposing
the investor to the same real level of stock-market risk close to
their target date as it did decades earlier, precisely when their own
real capacity to absorb a downturn has fallen. The glide path solves
this directly by shifting the fund's own allocation gradually over
time: emphasizing return-seeking assets like equities when the target
date is genuinely far off and time-horizon-driven risk capacity is
high, then gradually shifting toward capital-preservation assets like
bonds as the target date approaches and that same risk capacity
naturally declines.

WHY THIS CONNECTS DIRECTLY TO THIS CHAPTER'S OWN MATERIAL
This is precisely the same real logic this chapter already applied to
the "100 minus age" heuristic and to comparing investors of different
ages earlier in the chapter - appropriate allocation shifts as time
horizon shrinks. A target-date fund simply automates that same real
adjustment continuously over time, rather than requiring the investor
to manually reassess and rebalance their own allocation as their own
time horizon changes.

ANSWER: A target-date fund's glide path shifts allocation automatically
because an investor's own appropriate risk capacity is directly tied
to time horizon, per this chapter's own material - a fixed allocation
set once wouldn't account for the fact that risk capacity naturally
shrinks as a target date approaches, since there's progressively less
real time left to recover from a severe downturn like the chapter's own
15-year dot-com bubble recovery example. The glide path solves this by
emphasizing equities while the target date is distant and risk capacity
is high, then gradually shifting toward bonds as the date nears and
that same capacity declines - automating the exact same time-horizon-
driven adjustment this chapter's own "100 minus age" heuristic and
age-comparison material already describe.

WHY THIS WORKS AS AN ANSWER
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This connects the glide path's own mechanism directly back to the
chapter's real material on time horizon and risk capacity, explaining
why a fixed allocation would genuinely become inappropriate over time
rather than simply describing what the glide path does.