Earlier this year I reviewed ten asset allocation mutual funds with a range of strategic designs as an academic exercise for exploring how multi-asset strategies stack up in the real world. Not surprisingly, the results varied, albeit largely by dispensing a variety of gains as of late-February. But that was then. Thanks to the recent spike in market volatility (and the slide in prices), a hefty dose of red ink now weighs on these funds.

Seven of the ten funds post losses for the trailing one-year period through yesterday (Sep. 22), along with one flat performance and two modest gains. This isn’t surprising, considering the setbacks in risky assets over the last month or so. But the latest run of weak numbers is also a reminder that asset allocation comes in a variety of flavors and the results can and do vary dramatically at times. One lesson in all of this is that investment success (or failure) generally is usually driven by two key factors: asset allocation and the rebalancing methodology. With rare exception, the rest of price volatility is more or less noise.

Of the two, rebalancing is destined to be far more influential force through time. Assuming reasonable choices on the initial asset mix, results across portfolios—even with identical allocation designs at the start–can and will vary by more than trivial degrees. And let’s be clear: it’s no great challenge to select a prudent mix of asset classes to match a given investor’s risk profile, investment expectations, etc. Tapping into a solid rebalancing strategy (tactical or otherwise) is a much bigger hurdle. But at least there’s a solid way to begin.

For most folks, holding some variation of Mr. Market’s asset allocation strategy—the Global Market Index, for instance—will do just fine as an initial game plan. The choices for tweaking this benchmark’s design will cast a long shadow over results if the weights are relatively extreme—heavily overweighting or underweighting certain markets, for instance. Otherwise, the details on rebalancing eventually do all the heavy lifting, for good or ill as time rolls by.