Portfolio Rebalancing
The Vanguard Balanced Index Fund constantly maintains a 60/40 (stock/bond) mix; the equity portion is invested in the broad U.S. stock market, while the fixed-income part mimics the Barclays Aggregate Bond Index. For the 10-year period of 2002–2011, the fund averaged 7.04% a year, while a 60/40 mix that was never rebalanced returned 6.82% annually.