TY - JOUR T1 - Practical Applications of The Limitations of Diversification Return JF - Practical Applications SP - 1 LP - 5 DO - 10.3905/pa.2014.2.2.076 VL - 2 IS - 2 AU - Donald R. Chambers AU - John S. Zdanowicz A2 - Goyal, Gauri Y1 - 2014/10/31 UR - https://pm-research.com/content/2/2/1.11.abstract N2 - The Limitations of Diversification Return Donald R Chambers John S Zdanowicz There is no doubt rebalancing can increase portfolio value, but the drivers of this value are widely misunderstood, according to the research behind The Limitations of Diversification Return , in the Summer 2014 issue of The Journal of Portfolio Management .The value of rebalancing does not come from reduced volatility or increased diversification, as some prior research maintains, co-authors Don Chambers and John Zdanowicz explain. In this Practical Applications report, Chambers-the Walter E. Hanson KPMG Chair in Finance at Lafayette College , tells us why rebalancing increases portfolio value.Don’t bother with diversification return; rethink your view of portfolio rebalancing; mean reversion is the driver. These are the practical applications he discusses in this report.TOPICS: Equity portfolio management, volatility measures, statistical methods ER -