%0 Journal Article %A Donald R. Chambers %A John S. Zdanowicz %A Gauri Goyal %T Practical Applications of The Limitations of Diversification Return %D 2014 %R 10.3905/pa.2014.2.2.076 %J Practical Applications %P 1-5 %V 2 %N 2 %X 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 %U https://pa.pm-research.com/content/iijpracapp/2/2/1.11.full.pdf