So from a volatility standpoint, rebalancing does appear to have a positive effect on a portfolio--you won't hit the same heights, but neither will you experience the same losses an untended portfolio experiences.

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While stock prices can move quickly and dramatically when estimates have a material change there is still a lag effect as analysts and Portfolio Managers evaluate the numbers and related material.

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There is a multiplier effect that occurs in a portfolio when index funds are used to represent every asset class.

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