fwiw, VWINX has barely kept up with PONDX the last couple of years. VWELX is outperformed by a 50-50 mix of PONDX and DSENX, a balanced combo I suggest to about anyone. Never gonna be in 401ks, though.

Finally! Someone talking some sense. It doesn't matter if one does not agree with every reason provided in the article for making this argument.
Unless you are invested with absolutely incompetent manager over the long run it is going to matter diddly. The quest to measure against index is futile. One needs to focus on absolute returns and permanent loss of capital. What I call ANALysis. This lets me navigate my retirement accounts even when I get locked out of repurchase when I am forced to sell on whipsaws in index funds. I just go into another "large cap" fund or a target retirement fund.
What I like is a "smooth" line going upward all the time and I'm okay if the slope of that line is below the index slope. I just need my slope to be smoother and I have been achieving it for the past 10+ years. I'm perfectly fine seeing a "flatline" in my portfolio before my models tell me to start moving "upward" again, and I don't try catching the index slope.

FYI: So far so good?
On May 25, Wall Street closed the 100th trading day of 2017, with the S&P 500 having risen 7.9% over that period. That’s a strong start to a year—the fourth-best start of the past 20 years—but don’t worry if you didn’t miss the rally. According to data from LPL Financial, not only has the market never ended a year with a negative return after such a start, but such a beginning typically augurs well for gains through the rest of the year.
Since 1950, there have been 23 years, not including 2017, where the S&P rose at least 7.5% over the first 100 trading days. In all those instances, the market ended higher on the year, with an average annual gain of 23.4%. Based on where the market ended 2016, such an annual gain would mean the benchmark index SPX, +0.76% ends the year around 2,760.
Regards,
Ted
http://www.marketwatch.com/story/the-sp-500-has-never-had-a-down-year-after-a-start-like-2017-2017-05-31/print

According to AAII, the survey measures the mood of only about 300 mostly male investors, averaging about 60 years, who elect to participate. AAII considered whether their survey is a reliable contrarian indicator and concluded that it had mixed results:
"The failure of sentiment to work perfectly (as a market timing tool) highlights two important points. Though correlations between sentiment levels and market direction have appeared in the past, the AAII Sentiment Survey does not predict future market direction. Overly optimistic and pessimistic investor attitudes are characteristics of market tops and bottoms, but they do not cause stock prices to change direction. Rather, it is changes in expectations of future earnings and economic and valuation trends that move stock prices. The timing of such changes has proven to be difficult to predict with accuracy.
This leads to my second concluding point: Never rely on a single indicator when forecasting market direction. Rather, consider a variety of factors—including prevailing valuations, economic data, Federal Reserve policy, government policies and other prevailing macro trends—and allow for a large margin of error in your forecast. As the saying attributed to John Maynard Keynes goes, the market can stay irrational longer than you can stay solvent."
http://www.aaii.com/journal/article/is-the-aaii-sentiment-survey-a-contrarian-indicator

Regarding JoeD's inquiry on the question of VWINX during a rising rate environment, M* notes the following:
"Between June 2004 and May 2007, the Fed raised rates by 25 basis points on 17 separate occasions, hiking the overnight lending rate to 5.25% from 1.00%. During that three-year stretch, the fund's 9% annualized gain beat the category norm by nearly 2 percentage points."
For the next several years, I would guess that the performance of VWINX would be driven more by the equity markets than the rising bond rates. Performance versus its peers would likely mirror its past.
At least my money is riding on that.

I thought the bond bull market is over and falling rates cannot buoy bond prices like they have for the past several years, over the next several years. I do own GLRBX which is more bonds than stocks like VWINX. One can make the argument VWINX is better than GLRBX, but I dunno how one can predict VWINX will continue to deliver superior returns in a falling stock market with rising interest rates.
I own VWELX, but I'm looking at tactical allocation and world allocation funds vs true blue balanced funds for my non-stock exposure. Past performance is not a guarantee of future performance. If we keep doing hindsight analysis then based on how far back we go we might come up with different conclusions. Over last 10 years I believe VWINX and VWELX have returned about the same but VWINX has been less volatile because it has less stocks and more bonds, and because interest rates have been generally falling. The below chart is food for thought.

It doesn't matter whether you take:
$5K x equity growth + $5K x bond growth, or
($10K x equity growth + $10K x bond growth) x 1/2
Same result. Multiplication is distributive over addition.
You seem to be missing the overwhelming significance of not rebalancing. To simplify the arithmetic and make the effect easy to see over a few iterations (years), let's use these exaggerated hypothetical returns:
Each year the equity fund doubles. Each year the bond fund returns 10%. Each year the hybrid fund returns 60%. I think you'll agree that aside from the magnitudes, I've preserved the general relationship - largest returns for equity, hybrid fund returning just over the average of the equity and bond returns.
We'll use $5K for each of the equity and bond funds, since then we don't have to divide by 2 at the end of every step. Keeps arithmetic simpler.
Year 0: $5K equity + $5K bond, vs. $10K hybrid
Year 1: $10K equity + $5.5K bond, vs. $16K hybrid. Hybrid ahead by $0.5K.
Rebalance - we're trying to emulate a hybrid fund, so we rebalance for the same allocation
Year 1: $7.75K equity + $7.75K bond, vs $16K hybrid.
Year 2: $15.5K equity + $8.525K bond, vs. $25.6K hybrid. Hybrid ahead by $0.975K
Rebalance.
Year 2: $12.0125K equity + $12.0125K bond, vs. $25.6K hybrid.
Year 3: $24.025K equity + $14.21375K bond, vs. $40.96K
At this point, the hybrid is ahead by $3.72125K.
The hybrid lead is accelerating, as one would expect because its yearly outperformance of 5% (60% vs. the average 55% of the stock and bond funds) compounds year after year.
You can't say on the one hand that you want to keep a constant 50/50 mix (or 40/60 or whatever), and on the other hand say that you don't care, you're going to let your portfolio become equity heavy. Look at the actual fund figures. Without rebalancing, the portfolio evolves into one that's over 90% equity ($2,478,356 vs. $215,945).
In the 46th year, this 90/10 portfolio will pull away even further from the 40/60 hybrid. But 90/10 is not the mix that the investor wants to hold, year in, year out.

Always hard to spot mistakes while you are making them. Sometimes your "mistakes" can make you rich. It is not a mistake unless you don't sell :-)
I wish there was a way to tell 10 years from now if Vanguard Growth Index returned X% and Vanguard Value Index returned Y%, what will Vanguard Total Market Index return - Z%. If we knew that, we can make decision to by Vanguard Total Market Index *today*.
I think the author is beating himself up too much.

I suspect your math is a bit skewed. Just a hunch on the figures you used:
VWINX average return over life (since 7/1/1970): 9.81%
FCNTX average return over life (since 5/17/1967): 12.39%
FBNDX average return over life (since 8/6/1971): 6.94%
To see how $10K did each way, my guess is that for VWINX, you took something like:
$10K x (1 + 0.0981) ^ 45 ~= $670K (45 years)
For Contra you may have used: $5K x (1 + 0.1239) ^ 45 ~= $960K
For IG Bond you may have used: $5K x (1 + 0.0694) ^ 45 ~= $100K
So the "50/50" starting amount grew to around $1.06M, not quite double $670K, but not that far off.
The problem with this back of the envelope calculation is that you've now got an investment that's 90%+ equity. You've not mirrored the asset allocation of VWINX. To do that, you'd need to rebalance periodically. To do that accurately, you'd need to know how much each fund returned each year, since bonds would outperform equities from time to time and you'd have to sell bonds, not equities to rebalance.
Nevertheless, since we're doing really crude calculations, we can simply assume that the returns each year are the same. So each year, the 50/50 blend would return the average of the two returns: (12.39% + 6.94%) / 2 = 9.665%, or a tad less than VWINX.
Don't forget to check on the loads. I believe all three of these funds had loads back in 1971.

VWINX highlighted here:
Long-Term Growing Income From An Open-End Mutual Fund: Is This Possible?

Criteria:
The Retirement Income withdrawal will be 4% of the beginning investment value with each successive year's withdrawal increasing by 3% to allow for inflation. Any dividends collected in excess of this will be accumulated in a money market account (MMA) until the year the mutual fund produces less in dividend income than is required and the difference between the next year's household income need and the dividend collected is taken from the MMF. I'm assuming the interest rate on the MMA is zero. If the collective cash reserve is not sufficient…or non-existent…and the dividend collected that year is not sufficient to meet household income need, then sufficient shares will be sold at the end of the year to provide the required cash. This is repeated each December at the end of the month (last trading day).
VWINX is the clear winner. Providing 25 years of inflation adjusted 4% annual distributions with a residual value over 89% greater than its beginning value.

long-term-growing-income-open-end-mutual-fund-possible

VWINX has had 40 calendar years of positive returns and only 6 negative years. Its worst year by far was 2008 (-9.8%), which was top quintile of the class.
Since inception, VWINX has averaged 9.8% annual return. Quite impressive.
Looking at the bond portion (approx. 60% of portfolio), I see only 17% in govt bonds (I assume these are Treasuries), with Corporate bonds at 72% of the bond total. For some reason, I thought this fund held more Treasuries.
Effective duration 6.5 yrs
Effective maturity 9.5 yrs
Are there any concerns about VWINX's bonds being a drag in the next few years, as they are not really short-duration overall? Or better to side with the solid long-term return history of VWINX and just ride things out in this "conservative" vehicle?
I'd be extremely happy with 5% or 6% per annum, with no major heart attacks along the way. Just looking for devil's advocate here. WHY SHOULDN'T I BUY THIS FUND assuming those are my goals?
Any input appreciated.
-Joe

Many Mutual Funds mentioned in this story that I thought was worth sharing:

...as an exercise in reality and humility, I’m going to explore some of my notable investment failures, and lessons learned. As you will see, there have been plenty of them over the years….

Article:
my-biggest-investing-mistakes
Author of Article (his Blogs):
darrowkirkpatrick.com/
and,
caniretireyet.com/

Trump may not like how many people choose to buy German cars and he would like to slow the imports, but 2 out of his 3 wives were imports.
All he is doing is trying to appease the people that voted for him, to hell with everyone else. I turned away from American cars since 1976 when I bought my first Toyota. I have two now, one is 10 years old and drives like the day I bought it.

I have 1990 Miata (first year) with over 200,000 miles and after 27 years it is still extremely reliable. Not even an oil leak! From time to time I look at the new ones, but I always conclude I have no compelling reason to buy one.

That's nice. A gal I worked with came to the employees' summer party one time in a Miata convert. Long time ago now. But I remember. Very sexy looking.
Now - I have a 2005 Silverado 1500 pickup. 44,000 miles. Leaks oil all the time. All the coolant blew out driving recently and was no warning on the dash. But there's an orange warning light that's always on signaling a loose gas cap. Nobody can figure how to turn it off. Bumper rusted off and was replaced years ago. Spare tire carrier rusted off. Mice built a nest under the hood in the fuse box and ate the wiring one time. Tail gate's falling off, etc, etc. Would I buy another GM truck?

Would love to consider a Miata, but that's even more impractical (no spare, no front trunk, no glove compartment), and I am now living where it snows occasionally (rear wheel drive and snow tires).

I have 1990 Miata (first year) with over 200,000 miles and after 27 years it is still extremely reliable. Not even an oil leak! From time to time I look at the new ones, but I always conclude I have no compelling reason to buy one.
However, you are correct that it is not the most practical car.

To each his own. Best car I ever owned was also a Toyota - an MR2 that I drove for almost 200K miles.
Would love to consider a Miata, but that's even more impractical (no spare, no front trunk, no glove compartment), and I am now living where it snows occasionally (rear wheel drive and snow tires).
The higher projected BMW maintenance costs should be somewhat offset by manufacturer coverage for the first four years. (Audi provides only one year and VW none; something to think about.)

There are a variety of reasons why I don't look at used cars. As noted in the article, most cars with high discounts are not great cars to begin with. Take a look at a list of most highly discounted used cars; not one that's appealing. (The Fiat 500 is cute, but is still a lousy car by all reports.)
https://blog.iseecars.com/top-12-cars-to-buy-used-not-new/
Regarding the A3, Consumer Reports buying service suggests I can get already get about a 12-13% discount on a new car.
What I get for a few thousand dollars is an extra year's life out of the car, and in the case of the BMW, an extra year of free maintenance. Rather than having to take catch as catch can, I can have a car built to spec, including color and features. Thus I can effect additional cost savings by not paying for features that have little value to me.
It's a matter of preference. I'm aware of the economics. Amortized over 15 years, I'm willing to pay up to get exactly what I want.

On a tangential note, I've started researching cars (after 15 years, and needing a clutch job, it's about time). It's time for a little indulgence, so I've focused on three cars, all German: A3 (base model), 230i xDrive, and VW GTI DSG SE (sunroof). Trump will not appreciate me.
Thoughts (and other suggestions) appreciated. My priorities are a good balance of handling (not raw power) and comfort, efficiency, value, practicality.
Most of BMW's cars can be picked up in Europe. I'd guess that the ones built in the US are the ones not available there: i3, X3, X4, X5 and X6.
https://www.bmwusa.com/european-delivery.html

MJG may be like the permabears he describes. If one hits all the bears and many bulls as well, one will cut one's losses during market slides as he described. That doesn't mean one can time the market.
Taken to the extreme, just keep most of your portfolio out of the market. You'll "suffer a loss in a Bear, but typically not as much as the market itself experiences."
Unless you get back into the market at the right time, your "round trip" (through the bear and the subsequent bull market) can underperform simple buy-and-hold. Though by cutting one's losses (and gains) one may sleep better.
Then there are the bull markets one may hit inadvertently. Lightening up through those create sure losses relative to buy-and-hold, no matter how fast one reenters the market. How many people have tried timing the bond market for years, going shorter and shorter on duration as long bonds have continued to do well?

Sorry VF. Just messing with your brain. :)
I don't think there's any legal definition of long, short or intermediate term bond. So, there isn't any "correct" answer to the question you raised earlier. Manager spells out his/her definition of what constitutes each category for purpose of defining the fund's investment practices. And, of course, there's common practice, on which something like Investopedia would probably offer up a definition.
Problems with bonds? Tell me about it. Rates s*** on investment grade stuff. So investors have for years been fleeing into riskier assets like equities and high yield. A bit like jumping from the teapot onto the fire. Your point about slicing, dicing and than re-stacking the bond deck isn't missed either (Which nicely obscures the underlying risk for most of mere mortals.) I see that in spades in some hybrid income funds.
FWIW (totally unrelated) Commentators on Bloomberg are now speculating that the daily multi-billion dollar flow into large cap index funds is what''s keeping equity markets afloat. Just a thought.