For those who enjoy getting under the hood, William Sharpe has posted some interesting observations about asset allocation and re-balancing. It's in three parts and it's quite long. I'm only part way through it:
http://www.stanford.edu/~wfsharpe/art/princeton/prince0.htm
He seems to be saying, among many other things, that the kind of re-balancing many of us do - restoring our portfolios to somewhat arbitrarily chosen fixed percentages (which is ultimately a contrarian strategy) - may not be the best way to limit risk. He also challenges the rationale for slice and dicing.
http://www.stanford.edu/~wfsharpe/art/princeton/prince0.htm
He seems to be saying, among many other things, that the kind of re-balancing many of us do - restoring our portfolios to somewhat arbitrarily chosen fixed percentages (which is ultimately a contrarian strategy) - may not be the best way to limit risk. He also challenges the rationale for slice and dicing.