(link)
Nothing new but it makes sense. Stocks are the only game in town.

FD - So you know more about investing than the professionals quoted in Barron’s?

It's not about knowing more, it's about backing up a "new" concept with real numbers. The best teacher is the market.
I posted the following list several times:
1) US stocks are over value, the rest of the world is undervalue. US stocks did better in the last 10 years.
2) The GMO team and Arnott have been wrong for 10 years.
3) Gundlach was way wrong when he predicted the 10 year will be at 6% in 2021. Gundlach, the bond king, and his fund DBLTX was beaten by TGLMX for 1-3-5-10 years.
4) Bogle was wrong when he predicted stocks/bonds performance based on the past and averages.
5) Inflation and interest rates can only go up. Both wrong for years.
6) inverted yield signals recession = wrong. High PE, PE10 signal the end of the bull market...wrong again for years.
7) There is no way stocks will have a V recovery in March 2020 based on blah, blah, whatever...and they did.
8) The economy is bad, unemployment is high, the debt is huge = bad future stock market. The reality? Stocks are still up.
I can add more.
9) Investing in value, high yield, low SD are better just to find that the "stupid" SPY beat all/most of them;-)
10) There is no way to have a better risk-adjusted performance. I have done it for years.
Basically, I was always questing many "experts", research and rule of thumps. Most investors would do better with simple, very cheap indexes (Bogle) + hardly trade. The following is optional: use 20% (maybe 30%) to find better risk/reward funds, this task isn't easy and very limited. Examples: PRWCX,VLAIX,VWINX,PIMIX for several years.

Legg Mason Funds (including Clearbridge and Western Asset, but not Brandywine, Royce):
https://www.leggmason.com/content/dam/legg-mason/documents/en/tax-information/capital-gains-distribution/lm-2020-year-end-distribution-estimates.pdf
JPMorgan Funds:
https://am.jpmorgan.com/blob-gim/1383694733933/83456/jpmorgan-mutual-funds-2020-estimated-capital-gains.pdf

Another sign renewables are worth paying attention to.....

.....the Power Link doesn't just involve building the world's largest solar farm, which will be easily visible from space. The project also anticipates construction of what will be the world's longest submarine power cable, which will export electricity all the way from outback Australia to Singapore via a 4,500-kilometre (2,800 miles) high-voltage direct current (HVDC) network.

https://sciencealert.com/world-s-largest-solar-farm-to-pipe-power-internationally-from-australia-under-the-sea

@Baseball_Fan, I haven’t followed many of @FD1000‘s posts as members’ reputed past performance doesn’t interest me. However, I do enjoy learning about new innovative funds, the trends among various markets, changes at the fund houses where I invest, Fed policy, and different ways of constructing portfolios. So those who have studied FD’s performance posts are the ones that may want to respond. I do enjoy reading Barrons. It may well be that some here are better investors than the ones quoted there. But, I don’t feel Barrons is a waste of money either. I think it’s been helpful to me over many years. Have read it since the early 70s (which pre-dates MFO) :)
Here’s the quote I earlier referenced. My recollection as to the specific article may have been incorrect. This is from an article that appeared in April 2020 in Barrons. However, I think there has been more said in Barrons. I just don’t have the wherewithal to go back and reread every copy.
- “Industrial analyst Deane Dray also believes safety is important, but he recommends investors take a so-called barbell approach. He suggests an 80% weighting in safer stocks, while reserving 20% for more-cyclical names.” (Article posted online by Barrons April 1, 2020)
-
Here’s what I was able to dig up on Dray’s experience. Doesn’t mean he knows more than any of us. But he doesn’t sound like a lightweight either.
Experience
RBC (Royal Bank of Canada) Capital Markets Managing Director Since Sep 2014 - (tenure 6 years 2 months) - Sellside equity research analyst covering the Multi-Industry & Electrical Equipment sector.
Citi Global Research Director - Jun 2010 - Sep 2014 (4 years 4 months)
New York City Senior equity research analyst covering the Multi-Industry & Electrical Equipment sector. Global sector leader of Industrials. Global sector leader of the water sector
FBR Capital Markets Senior Industrials Analyst
FBR Jan 2009 - Jun 2010 (1 year 6 months)
New York Senior equity research analyst covering the Multi-Industry & Electrical Equipment Sector.
Goldman Sachs Vice President
Goldman Sachs 1997 - 2009 12 years
Greater New York City Area Senior equity research analyst covering
the Multi-Industry & Electrical Equipment Sector.
Lehman Brothers Vice President
Lehman Brothers 1987 - 1997 10 years
Greater New York City Area
Education
New York University - Leonard N. Stern School of Business
Master of Business Administration (M.B.A.)Finance
1980 - 1982
Brown University
Bachelor's DegreeDouble major: Political Science and Law & Society
1976 - 1980
Activities and Societies: Cum Laude Deerfield Academy Deerfield Academy
Deerfield Academy 1972 - 1976
Licenses & Certifications Chartered Financial Analyst
Sourced from Linkedin https://www.linkedin.com/in/deane-dray-cfa-1b1b53a2

Yes, I go back as far back as PV allows, to fund inception if possible. This is extremely relevant absent a change in how the fund operates over that period. How funds perform in Black Swan events (like '08 and Covid) is as and maybe more important then everything else. Just look at IOFAX, years of gains wiped out in a few sessions. So, yes, back to inception matters particularly if you go back to '08. Scroll down to the drawdowns on PV and you'll see...TCW has the lowest drawdowns, and overtime losing less matters, quite a lot. As I noted elsewhere, I'm a big fan of BIV (and BSV) but active management and portfolio mix can add value over a long period of time. TCW and Metwest Total Return share similar mngt yet the securitized portion of the market that TCW focused on back to Gundlach has paid off big in sell offs.

It's all good, FD. PIMIX is still good for long term holders. I'm meeting my goals. That is what is important to me. Keep convincing yourself that getting 5% per year with low SD is the only game in town. I guess there's a reason people live in Georgia :o}

Again, the thread is not about me but after you couldn't come up with anything to debunk the original post you resort to make it personal. I never said that what I do is the only game in town, it works extremely well for our portfolio. I actually posted many times that the average Joe should buy several funds (indexes+managed) and hardly trade.
But, please don't worry about me. I posted the following about a week ago, so I will just copy it below.
Remember, since I retired in 2018, we have enough money to sustain our standard of living for another 40-50 years if our portfolio will make just 4% annually including inflation. Our portfolio is 35+ times our annual expense without our SS. This is why I set up the following goals: make 6% average annually with the lowest SD I can get (preferably under 3) and never lose 3% from any last top. We don’t care about maximizing performance anymore but to meet our specific goals. To do that I use mainly bond mutual funds + several short term trades (hours-days) using stocks/ETF/CEFs/other. The 3 year results are much better than my goals. I never lost more than 1% from any last top in the last 3 years. Below is a copy from my Schwab accounts as of yesterday 10/14/2020 which is about 95% of our total money. There is no way to achieve these results without being a good trader and why I posted other funds too
3 year performance/SD...SPY 13.1%/17.7...VBINX (60/40) 10%/11.1....VWIAX (40/60) 7.04/6.6%...PIMIX 3.75%/5.6....IOFIX 0.2%/23.7
My portfolio performance was 9.9% annually for 3 year with SD=2.18
Below you can see an image of performance as of 10/14/2020 from Schwab. Column 1=one year...Column 2=YTD...Column 3=one year...Column 4=3 years

Below is the SD for one year and 3 years

BTW, welcome to MFO.

if you've won the game stop playing.
Ah, the Suze Orman approach to investing (circa 2007):

Do you enjoy spending money? Oh, yes. My greatest pleasure is still flying private. I spend between $300,000 to $500,000, depending on my year, on flying private.
What do you do with the rest of your money? Save it and build it in municipal bonds. I buy zero-coupon municipal bonds, and all the bonds I buy are triple-A-rated and insured so that even if the city goes under, I get my money.

(Even Orman concedes that in this low interest rate environment she puts some money into stocks, though most is still in munis.)
I'd like to introduce the "Dumbbell portfolio"
:-)
Universal Basic Income being discussed

The idea isn’t new. As [David] Frum notes, Friederich Hayek endorsed it. In 1962, the libertarian economist Milton Friedman advocated a minimum guaranteed income via a “negative income tax.” In 1967, Martin Luther King Jr. said, “The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Richard Nixon unsuccessfully tried to pass a version of Friedman’s plan a few years later, and his Democratic opponent in the 1972 presidential election, George McGovern, also suggested a guaranteed annual income.

https://www.theatlantic.com/politics/archive/2014/08/why-arent-reformicons-pushing-a-guaranteed-basic-income/375600/
Virtually every fund prospectuses (including those pertaining to bond funds) contains the warning: “You may lose money”.
That includes not only bond funds but money market funds, including Treasury MMFs. It's a matter of understanding what the risks are and rationally evaluating whether particular choices are worth the risks to you. (I know that sounds like motherhood; the key word is rationally.)

Again, Fed's Bazooka has yet to be fired:

As companies furloughed millions of workers and stock prices plunged through late March, Treasury Secretary Steven Mnuchin offered a glimmer of hope: The government was about to step in with a $4 trillion bazooka.
The scope of that promise hinged on the Federal Reserve.

NYT Article:
https://nytimes.com/2020/10/21/business/economy/fed-lifeline-funds.html

Advances in robotics and artificial intelligence will lead to a net increase in jobs over the next five years but the coronavirus pandemic will result in “double-disruption” for workers, according to the World Economic Forum (WEF).
That will require a significant level of “reskilling” and “upskilling” from employers to ensure staff are sufficiently equipped for the future of work. According to the WEF, half of all employees will need some level of retraining in the next five years.

how-coronavirus-could-usher-in-a-new-age-of-automation

Now you're on a slippery slope toward a traditional portfolio asset distribution and away from a barbell (zero risk and high risk, nothing in the middle). Once you add bonds, you're proposing a different allocation regimen with likely higher risk as you noted (whether of negative rates or loss of principal from rising rates).
His barbell strategy:

A traditional strategy (note that the leftmost category excludes bonds):

FWIW VWINX 36.46 % VS HBLYX 41.46 % Would it not be possible VWINX returned more in 2020 than HBLYX ? It's what in the pot cooking not so much the size of the pot.
Derf

The equity profiles are quite similar, .....

Important to note significant differences between the two funds in equity holdings: VWINX 36% with HBLYX holding 44%.

True the equity/bond asset allocations are a bit different. Still, the equity profiles are similar:
VWINX vs. HBLYX:
LCV: 69% vs. 73%
LCBl: 21% vs. 15%
LCG: 2% vs. 3%
MCV: 5% vs. 6%
MCBl: 0% vs. 1%
Others: 0%
VWINX: 9.5% of equity is foreign (1.47% Canada, 1.48% UK, 6.59% Europe developed)
HBLYX: 9.4% of equity is foreign (1.69% Canada, 1.34% UK, 6.35% Europe developed)
Even in terms of equity allocation, the historical differences tend not to be quite so large. Closer to 5% than to 8%. Again from M*, VWINX vs. HBLYX:
2020: 36.46% vs. 41.46%
2019: 38.11% vs. 42.87%
2018: 36.90% vs. 40.15%
2017: 38.56% vs. 43.25%
2016: 38.30% vs. 41.27%

I'm less concerned than some others with the modest increase in duration of DODIX. To explain why, I'm going to have to go into why I feel that MBS durations understate risk. Negative convexity. Bear with me here.
I'll try explaining this by analogizing to a vehicle in motion. Duration can be thought of as a measure of speed. A duration of five years means that you're "driving" at 5% per 1% rate change. That is, for every 1% increase in interest rates, you lose 5% in value. That's your "speed".
If you were "driving" at a constant speed, you'd lose 5% for each 1% increase in interest rates, like driving a steady 5MPH down a road. The way vanilla bonds work, it's as though you were tapping the brakes. (A gentle tapping, nothing more, with apologies to Edgar Allen Poe.) So at the first instant, you're losing money at 5% per 1% rate change. But as soon as you start losing principal, you slow down. That's good, you don't lose money so quickly. You lose less than 5% as rates drop 1%.
With negative convexity, instead of decelerating (positive convexity), you're accelerating. You're not gradually dropping from 5MPH to 4MPH, but you're stepping on the gas, and speeding up, say to 6MPH. Instead of losing 5% as rates drop 1%, you're losing more than 5% as your losses accelerate.
One way of looking at this is that an MBS with a 5 year duration will lose more value than a vanilla bond with a 5 year duration. (So duration understates MBS interest rate risk.) Another way of looking at this is that an MBS with a shorter duration will lose just as much as a vanilla bond with that 5 year duration.
What DODIX did was shift from somewhat shorter duration MBSs to somewhat longer duration vanilla (corporate) bonds. So even though the duration looks longer than before, the expected loss if rates increase should still be comparable.

In the first six months of 2020, we established new positions in over a dozen corporate issuers at what we believe were exceptionally attractive valuations. These purchases, along with many additions to existing corporate issuers, increased the Fund’s Corporate sector weighting by 11 percentage points to 45%.
To fund these purchases, we sold certain Agency MBS and U.S. Treasuries, which now make up 31% and 8% of the Fund, respectively. We lengthened the Fund’s duration modestly through the aforementioned corporate bond purchases, though we remain defensively positioned with respect to interest rate risk.

https://dodgeandcox.com/pdf/shareholder_reports/dc_income_semi_annual_report.pdf

2 new ETFs from First Trust claim to help limit downside in equities if the market declines. Not sure if these products would interest anybody here. Also not certain if they will "work", but I will probably track them (DOCT and FOCT) for now. DOCT has lower limits than FOCT. I remain skeptical until I see how they perform.
FT Cboe Vest U.S. Equity Deep Buffer ETF - October (DOCT)
Investment Objective/Strategy - The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF - October (the "Fund") is to seek to provide investors with returns (before fees, expenses and taxes) that match the price return of the SPDR® S&P 500® ETF Trust (the "Underlying ETF"), up to a predetermined upside cap of 9.34% (before fees, expenses and taxes) and 8.49% (after fees and expenses, excluding brokerage commissions, trading fees, taxes and extraordinary expenses not included in the Fund's management fee), while providing a buffer against Underlying ETF losses between -5% and -30% (before fees, expenses and taxes) over the period from October 19, 2020 to October 15, 2021. Under normal market conditions, the Fund will invest substantially all of its assets in FLexible EXchange® Options ("FLEX Options") that reference the performance of the SPDR® S&P 500® ETF Trust.

@Old_Joe, There is also the ineffectiveness of Fed Policy (Cares Act):
federal-reserve-treasury-coronavirus

Perched above this whale is a mountain of untapped Fed Help (Cares Act Money) :
federal-reserve-treasury-coronavirus/

In New 60/40 Portfolio, Riskier Hedges Are Displacing U.S. Debt

Many investors have no choice but to stick with Treasuries because of fund mandates, or they do so since they’re unconvinced it’s worth taking a chance on something else. Yet others are exploring riskier assets -- from options to currencies -- to supplement or fill the role of portfolio protection that U.S. government debt played for decades, a trend that highlights the dangers that the Fed’s rates policy can create.
and,
Options Hedge
Swan is a longtime skeptic of Modern Portfolio Theory, which was made famous by economist Harry Markowitz in the 1950s and is the thinking upon which the 60/40 mix is based. Two decades ago, Swan created a strategy of using long-term put options plus buy-and-hold positions in the S&P 500 to limit huge losses during economic downturns.
That approach has since been expanded to include positions in exchange-traded funds indexed to small cap stocks, and developed and emerging markets. It relies on constant allocations of 90% to equities and 10% to put options purchased on the underlying ETF portfolio.

Are riskier-hedges-are-displacing-u-s-debt

maybe; will be intriguing to watch fed policy struggles if biden wins, in only 2w
https://www.nytimes.com/2020/10/19/business/dealbook/biden-tax-economy.html
(earlier: https://www.nytimes.com/2020/10/01/opinion/trump-biden-economic-policy.html)
higher-level views:
https://www.nytimes.com/2020/10/18/business/biden-tax-plan-economy.html
https://www.nytimes.com/2020/10/19/opinion/joe-biden-deficit-spending.html
completely ot, this is shocking even by current standards:
https://www.theverge.com/21507966/foxconn-empty-factories-wisconsin-jobs-loophole-trump

“Stimulus Roulette” is how one pundit labeled the market action today. ... :)
In an indirect way, Covid is implicated in today’s hit, since the stimulus bill being debated in Washington is supposed to provide Covid relief to the economically afflicted (but also stands to boot the whole economy). Markets seem to be reacting to whichever way the wind blows as those talks continue.
Hard to make out much looking at my funds or watch list. Gold price was quite steady, but some of the miners took a hit. OPGSX lost 2.32% - my worst performer. On my watch list, a bit of coincidence as Price’s Blue Chip (TRBCX) matched the exact percentage loss of the S&P. Both down 1.63%. You don’t suppose ...?
Bonds were steady, as Crash observed. Surprisingly, both high yield funds I watch were unchanged. Real estate fell - often a sign of rising rates.
Here’s a CNBC story on the latest stimulus talks.