By periodically and consistently rebalancing your portfolio, of low or uncorrelated stocks, back to its initial allocation, you effectively buy low and sell high.

When one stock has risen significantly and another has declined in value, rebalancing forces the sale of some of the outperforming stock (i.e. sell high) in order to buy some of the underperforming stock (i.e. buy low).

Over the long-term, this provides a steady excess return that would not otherwise be obtained without rebalancing. It’s the closest thing to a free lunch you’ll ever get in the stock market.