FYI: Another commonly accepted assumption is that rebalancing is a value-add activity. The underlying theory here is that assets tend to mean-revert over time, so by rebalancing on an annual basis, we can tilt our portfolio away from those expensive assets that have grown in relative portfolio weight and towards those cheap assets that have shrunk in relative portfolio weight. Rebalancing institutionally annualizes the practice of "buy high, sell low."
Regards,
Ted
http://blog.thinknewfound.com/questioning-dangerous-assumptions-rebalancing-add-value/
