A frequent complaint from some investors is that “uncertainty” is what keeps them out of the financial markets. “I’ll stay in cash until the direction becomes clearer,” they will say. So when has there ever been total clarity? Alternatively, people who are already in the market after a strong rally, as we have seen recently, nervously eye media commentary about possible pullbacks and say, “Maybe now is a good time to move to the sidelines.” While these kneejerk, emotion-driven swings in asset allocation based on market and media commentary are understandable, they are also unnecessary. Strategic rebalancing provides a solution, which we will explain in greater detail below. But first, think back to March 2009. With equity markets deep into an 18-month bear phase, the financial media warned of more pain. Toxic assets still weighed on banks’ balance sheets, economic signals were patchy, short-covering was driving rallies, the Madoff scandal had knocked confiden ...