On Rebalancing Portfolios

Asset allocation:

Re-balancing portfolio every year leads to extra returns (rather than letting assets sit in same class over long periods). I experimented with permanent portfolio 1972-2008, don't touch approach generated 96X returns vs. rebalancing lead to 127X return

This strategy could be combined with Mo-Mo stop loss strategy. That is unload "heated up" class with stop loss rather than end of year rebalancing. similarly be cautious on picking up last years loosers randomly. But then academic theory suggests its not possible to time tops & bottoms, so may be no point worth trying.

I still feel best strategy is, plan rebalancing as follows:

End of year - rebalance your portfolio. Sell some winners buy some loosers

after market fall of year, add your cash hoards

Don't chisel around rest of year. Sit quietly for rest of year/