I wonder if, over the next few years, we will see the final large upmove in gold before it burns itself out as it did in 1980, giving way to another two-decade stockmarket bull market.
Back then inflation was high, so also were interest rates ... and taxation. 15% inflation, 15% interest 40% tax and .... savers/pension funds lost -6%/year. The subsequent progressive decline in yields since then = higher prices for both stocks and bonds (and house prices).
This time around the 'new era' seems to be towards very low nominal yields, negative real yields (after inflation) ... savers/pension funds losing out.
People are anticipating a 'return to normal' positive real yields, but pension funds have to buy Gilts and as yields move even more negative so they have to buy even more, pushing prices even higher/yields lower. The treasury in effect is being paid to lend, debt becomes a asset. Similarly rather than the cost/effort of collecting taxes, its easier/cheaper to just print money and spend it - which is a form of micro-taxation (all other notes in circulation are devalued). And that's becoming the new era 'norm' (tracking down and collecting taxes in a global village is otherwise difficult).
If so, then negative real yields could become a long term feature. In which case investors/savers will look elsewhere to avoid paying the treasury to safe keep their money. Things like gold. As gold is volatile however, 50/50 it with stock and the two tend to counterbalance reasonably well. All gold is as bad as all-stock.
Since 2008 gold has risen from around £300/ounce to £1300/ounce, a annualised rate of 13% - well ahead of inflation. Much of that was down to a correction out of gold being out of favour, such gains wont persist mid/longer term. I suspect we're at levels where gold is more around a fair price level, having recorrected from being cheap https://tinyurl.com/yaeqepx4
In a era of where bonds become high risk, pretty much guaranteed to lose money if bought and held to maturity, 50/50 stock/gold barbell will become the future 'safe bond' IMO. Regression analysis suggests that 1986 might be a good baseline start date for relative comparison https://tinyurl.com/y7dmalqq
but where I suspect that forward time as prior high to low yield transitions expire and roll into negative real yields for bond barbells/bullets/ladders that the two will diverge with bonds flat/down in real terms whilst stock/gold might continue real gain progression as before.
But what if inflation/interest rates do spike heavily back into positive real yield territory, a repeat of the 1970's type rise? Well Harry Browne opted to split 50/50 stock with equally with bonds, and rather than a 10 year bullet (25% stock, 25% gold, 50% 10 year gilt bullet), he instead opted for a short/long dated gilt barbell for the bond holdings. The difference however is just noise https://tinyurl.com/y76rvsrv
(that chart goes back to 1978 as that's as far back as they have long dated treasury data for).
Personally from the current date, I'd be more inclined to allocate the bond half to a 3 or 5 year High Street Bank fixed rate bonds ladder (roll each maturing bond into another 3 (or 5) year bond as/when a bond matures, where if you're rich enough - ensure not to exceed depositor protection limits with any one provider https://www.moneysupermarket.com/saving ... ate-bonds/
(with Gilts, you're pretty much protected up to any limit, and have near instant access, unlike fixed rate bonds where there are usually penalties if you look to close/withdraw early). With shorter dated bonds you have a third (5th for a 5 year ladder) maturing each year, such that if interest rates have risen you roll into them sooner rather than later (with a 10 year bond you have to wait a decade for it to mature/roll).