Regional Vice President of Sales The Retirement Plan Company
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Bates & Company, Inc.
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Compass
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AimPoint Pension
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Loan & Distribution Specialist AimPoint Pension
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Defined Benefit Combo Cash Balance Compliance Consultant Loren D. Stark Company (LDSCO)
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Why Asset Allocation Doesn't Matter in the Long Run
Fiduciary News; free registration required June 24, 2015
"It turns out an investor who does not rebalance will receive a higher return in all areas compared to an investor who rebalances. Needless to say, if rebalancing a stock/bond asset allocation mix doesn't beat the results of the static case, then it certainly won't beat the 100% stock mix. Again, in this variation of the long-term test, asset allocation fails. Why does rebalancing fail? It appears, because stocks routinely (and to a significantly higher degree) perform better than bonds. That means annual rebalancing has you selling stocks in more years than you're selling bonds."
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