Those investors who have let the extended bull market drive their equity allocations  higher without rebalancing “may be holding riskier portfolios than they initially signed up for,” according to a recent article in Morningstar.

The article offers the example of a “hands off” investor with a traditional 60/40 portfolio—without rebalancing, that portfolio could now be closer to 80% equities. While their risk tolerance could have risen along with the market, the article notes, “it’s more likely that the current portfolio no longer resembles an appropriate blend of risky and safe assets.”

To illustrate, Morningstar created six different rebalancing versions of a typical 60/40 portfolio: Five of the strategies applied rebalancing from daily to annually, with the sixth rebalanced only “when the underlying stock allocation drifted more than 5 percentage points  from the strategic  allocation for each index:”

The study found that a buy-and-hold strategy earned slightly higher returns but also endured higher volatility due to heavy equity weighting, “making the return advantage not worth the risk.”

While frequent rebalancing may be “an unrealistic expectation for do-it-yourself investors,” the article argues that a combination of annual rebalancing and periodic reviews for significant fluctuations “should be within the realm of possibility.”

The article concludes, “Our research shows that doing so will lead to better outcomes over the long term relative to buy-and-hold investors.”