With a highly non correlated portfolio in a perfect world rebalancing should almost always work just right. (selling the surplus gains and buying the deepest discounts. Its when there is too much correlation in direction of change in a given year but not in the magnitude of change that inefficiencies can occur.
Maybe the Rebalance idea could include a rule to minimize the effect of "all ships rising."
It sounds like your real time example also includes further contributions. That would complicate matters. It sounds like your method does a good job of anticipating that.
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