What is the best thing you can do to improve your clients’ portfolio performance? For a long time, the accepted answer was simple: asset allocation. Now, however, it appears that there is a second factor that might just be more important: consistency in that asset allocation, as maintained by steady rebalancing.

In 1986, a notable research paper concluded that asset allocation was the most important determinant of portfolio returns. As it happens, the last decade and a half has offered confirmation of the validity of this theory.

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