The same point in a different article:

Right. You’ve heard it before: this is the “most hated” bullish rally ever, based on the number of times this expression has been brought to bear in recent weeks. But, by now, the fact that so many investors are parked in cash is a bullish signal, says Michael Hartnett, BofAML’s chief investment strategist. According to the firm’s contrarian “cash rule,” when average cash balance rises above 4.5% it means that investors appear to be overly bearish, or at least not bullish enough.

http://blogs.barrons.com/focusonfunds/2016/07/19/despite-rally-cash-levels-still-at-highest-level-since-2001-buy-signal-for-stocks-says-bofa/

But I remain puzzled by the emphasis that you and others place on the fact that stock dividends fell below long term treasuries in 1957. Total annual returns are the pertinent measure of any investment’s anticipated value.
My only point was in reference to catch22's comment
Anyone sure that this time isn't different??? and your subsequent comment about how "this time is different" type thinking can be a risky proposition. I don't necessarily disagree at all with your response. But there *have* been times in history when "this time it really was different". I was only 11 at the time but I still recall my father going on and on about this. As if this time it might really be different. And for the next five decades it was different.
Catch22 can correct me on this but I thought his point was maybe low rates are here to stay for longer than most expect. And this time it may once again be different with equity yields above bond yields like was the norm pre 1958. I am still not sure you understand where I am coming from on this. But that is what makes for discussion.

Hi Junkster,
It is indeed possible that I missed your point. I read and responded to your post after midnight, and that’s well beyond my normal bedtime.
But I remain puzzled by the emphasis that you and others place on the fact that stock dividends fell below long term treasuries in 1957. Total annual returns are the pertinent measure of any investment’s anticipated value.
I generally don’t sweat the finer details because bottom-line outcomes matter most. As an amateur investor, I frequently don’t know the finer details. If I did know those finer points, I would likely make errors in properly assessing them.
The data from the time period that you called attention to demonstrate the unpredictable volatility of various asset class returns. In 1960, bonds outdistanced the S&P 500 return by a whooping 11.64% to 0.34%. In the next year, a more conventional return to normal occurred. In 1961, stocks returned 26.64% while the 10-year treasuries delivered 2.06%. I doubt that very many market gurus projected these sudden changes; surely far fewer projected both outcomes.
The economic environment does change. But the public’s emotional reactions to the marketplace change far more quickly and unpredictably. As Phil Tetlock’s research proves time and time again, forecasting is a truly hazardous business. Repeat winners are rare birds.
Do you remember Elaine Garzarelli? She became a hero based on her accurate Black Monday call decades ago. Her subsequent predictions, however, were much less prescient. An analysis of her market predictions between 1987 and 1996 found her to be right only five out of thirteen times, But she’s a survivor. She is currently running Garzarelli Capital. Her predictions both then and now are based on a 13 factor model. Over time that model has been revised in terms of weightings on each factor.
Nobody can predict the future with statistical accuracy trustworthy enough to make major portfolio adjustments. As John Kenneth Galbraith said: “The only function of economic forecasting is to make astrology look respectable.” In his book, “Contrarian Investment Strategies”, David Dremen concluded that forecasters are wrong 75% of the time. Trust these charlatans at your risk.
In "The Black Swan," Mr. Taleb controversially recommends a "barbell" strategy. In that strategy, investors put 90% of their portfolios in extremely safe instruments, maybe like Treasury bills. The other 10% is committed to highly speculative products with potentially outsized rewards, perhaps options. It takes a lot of investing know-how and confidence to successfully deploy that strategy. I suspect that you might use some variation of Taleb’s barbell approach.
Not many investors can follow that course (that’s not me and I am definitely not referring to you). The problem is that many folks mistake luck for competence.
Thanks for the references.
Best Wishes.

FYI: Vanguard, BlackRock see biggest inflows, largely because they're the largest providers of passively managed funds.
Regards,
Ted
http://www.investmentnews.com/article/20160719/FREE/160719928?template=printart

FYI: Fund managers are holding cash at the highest levels in almost 15 years. That could be a bullish signal.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2016/07/19/cash-is-king-and-thats-good-for-the-rally/

@heezsafe & MFO Members: Nice link heezsafe, I'm jealous you beat me to it ! Here is David Blitz's study on using smart-beta indexes.
Regards,
Ted
http://www.robeco.com/images/whitepaper-smart-beta-investing-062014.pdf

MJG I think you missed my point. This has nothing to do with the *performance* of stocks vs. bonds. Just the unthinkable and this time it really was different as 1958 was a watershed event in that for the first time ever bonds yielded more than stocks.
https://books.google.com/books?id=RvhGaqZ_oNUC&pg=PT143&lpg=PT143&dq=1958+bonds+yielded+more+than+stocks.&source=bl&ots=pixHXN0tvA&sig=YCDJlXuohSUBqPKwxYMT4ufgU7Y&hl=en&sa=X&ved=0ahUKEwjWosrL3IHOAhWFeSYKHU3XC5wQ6AEIMDAD#v=onepage&q=1958 bonds yielded more than stocks.&f=false
http://www.safehaven.com/article/14784/stocks-vs-bonds-5-decade-anomaly-returns
http://www.montereywealth.org/2012/06/14/stocks-yield-bonds/

Hi Junkster,
Thank you reading my post and contributing to the discussion.
I was not immediately aware of the roughly 2 decade market timeframe starting in 1958 that you referenced in your reply. At that referenced date, I had only started investing a couple of years earlier. But my information shortfall was easily rectified.
I simply went to the Internet and linked to the New York University Stern school annual returns listing. Here is the Link to that nice data summary:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
Given the source, I presume this data package is accurate. I am not overwhelmed by the 10-year T. Bond returns over stocks even for that excellent period for the bond issues. The 10-year bonds did outperform stocks in 8 years of those 20-year annual periods. Even in that carefully selected timeframe, I doubt that the bond cumulative returns exceeded stock performance (I did not do the cumulative calculation).
But the Stern school did do both the arithmetic and geometric averages for the respectable 1966 to 2015 timeframes. From my perspective, that's a very meaningful period. For that extended time period the S&P 500 delivered 11.01% and 9.60% annual arithmetic and geometric returns, respectively. During that same period, 10-year T. Bonds produced 7.12% and 4.82% arithmetic and geometric annual returns, respectively.
Stocks win because they are risky and they generate returns both from dividends and price appreciation. It is certainly true that stock dividends have been contributing less to that total return than they did in the past. But the total return is what is most meaningful to me, and I suspect to many other investors.
This is not to say that fixed income is not a major portion of my portfolio. It is. Even at an age in excess of 80, I still have a 60/40 portfolio mix. Portfolios benefit from the diversification with low correlation coefficients between these two asset classes.
That portfolio split might be a tiny bit misleading since my wife and I both have social security and company retirement annual incomes. I count those as part of my fixed income segment since they are pretty secure with small incremental annual pluses. So the active portion of my portfolio is very heavily weighted in Equity and Balanced mutual funds.
Many thanks once again, and many good hopes for your portfolio management style. There are many ways to win at this game. Unfortunately there are many more ways to lose.
Best Wishes.

MJG You may want to go back to 1958 and what happened to stock yields vs bond yields. It was a big thing at the time. Something that had never occurred in history and remained that way for many decades. Albeit not suggesting that it is different this time just that in the past it was.
In a recent issue of his newsletter Economics & Portfolio Strategy, Bernstein recounted what it was like in 1958 when T-note yields -- for the first time in U.S. history -- jumped above the stock market's dividend yield:
"This ... was unprecedented. The two yields had come close in the past but had always backed away at the critical moment. In 1958, they reversed their historical positions and have never looked back.

Hi Guys,
What nuanced nonsense! The article had many words, and just about zero new market interpretations. Change is continuous; that’s not an unexpected proclamation.
Change always happens, especially among various investment asset classes. It is an integral characteristic of the marketplace, and always has been.
This can be easily documented by simply visiting the Portfolio Visualizer website. One component of that site has a very comprehensive segment correlation section that does all the hard work. If you are so inclined, please give it a look-see-use tryout. Here is the direct Link to the asset class correlation portion of that resource:
https://www.portfoliovisualizer.com/asset-class-correlations
All a user needs to compare the dynamic nature of segment correlations is to input different starting dates. All the asset correlation coefficients are automatically calculated and even segment average returns and volatility are helpfully provided. It’s fun. Enjoy.
I do believe that the market returns have a strong pull to a regression-to-the-mean. Much market evidence supports that tendency. If several market segments are currently out-of-whack, these dislocations will be recognized by both professional and amateur investors, and there will be trading pressure to a reversion such that more normal outcomes will return.
To illustrate and for convenience, the 3-year comparison of the Vanguard Total Stock market ETF performance compared to the Vanguard Total Bond Market ETF serves well as a potential test of the regression hypothesis. The current outstanding 3-year bond results compared to overall stocks is anomalously high when contrasted against longer-term historical levels.
Check the relative returns of these two accessible Vanguard products over a longer timeframe, such as a 10-year period. I believe that the odds favor a regression-to-the-mean. The longer haul data suggests stronger future stock returns over present values whereas bond rewards will likely diminish. Time will be the ultimate arbitrator.
Personally, I’m not "stuck in the middle"; in reality, the article is a waste of good ink and space. I remain patient and await a return to the normal distribution and relative distribution of asset class returns. Their correlations will vary over time based on economic circumstances.
I’m not making major changes to my portfolio’s asset allocations. What do you think?
Best Wishes.

http://www.bloomberg.com/news/articles/2016-07-19/a-little-noticed-kink-in-smart-beta-etfs-might-blindside-buyers?cmpid=yhoo.headline
Additional factors can creep into single factor smart betas and alter their course/returns, to the downside.

In mutual funds, when a value manager strays from his mandate and ends up owning a bunch of high-priced growth stocks, they call it style drift. While the algorithms that do the stock picking in smart beta are too clever for that, a related hazard exists. It’s when funds tuned to one strategy start to be influenced by another: a low-volatility portfolio that gets infused with momentum stocks, for example.
“You can use smart beta for implementing factor investing, but you have to be very careful with how you do it,” said David Blitz, Robeco Asset Management’s head of quantitative equity research, who published a study in April about the complexities of using smart-beta indexes in pure factor investing. “What you end up with is very different than what you had in mind.”

FYI: If 2015 was the year that nothing worked, then 2016 is shaping up to be the year that everything worked. Bonds are up. Stocks are up. Real assets are up. Gold is up. Go ahead – pick your favorite asset -- it’s likely to be up as well.
Regards,
Ted
http://www.bloomberg.com/gadfly/articles/2016-07-18/investors-are-stuck-in-the-middle

CETAX and CSIAX are available at Schwab as no-load, NTF. $100 minimum for basic and IRA accounts. Schwab system not updated yet for CSIAX because it was just added yesterday, but one can buy it online anyway.

"F" is Franklin, right? :-)
That fund (Franklin Mutual Shares) has a noload share class MUTHX open to people who were continuously invested in any of Michael Price's old funds (they are grandfathered in) and to investors in wrap accounts.
The noload F-1 share class IFAFX of Income Fund of America® is available through various HSA accounts, including one that I've been looking at (because it is one of the few that facilitates cost-effective investing for sub $10K HSAs). It tends to be one of the more attractive offerings on these HSA lists of funds.
More and more these days funds can be accessed without paying a load. A fund that at first blush has an entry fee need not be dismissed automatically.

FYI: At the request of so many investment advisors, my friends at Riskalyze share the big trends in the assets going into and coming out of advisor portfolios every week. The underlying data is aggregated from hundreds of thousands of client accounts across the $120 billion and counting that advisors manage on the Riskalyze platform*. I hope we can uncover interesting trends for you each week…
Regards,
Ted
http://thereformedbroker.com/2016/07/18/the-riskalyze-report-advisors-buy-active-fund-winners/

FYI: The problems kept mounting for asset managers in 2015.
Asset growth for the industry was at its slowest since 2008, up just 1% to $71.4 trillion in 2015. That comes after assets grew 8% in 2014 and at an average annualized rate of 5% from 2008 through 2014. Earnings barely budged as well, up 1% to $100 billion, according to a recent study from Boston Consulting Group, which looked at nearly 140 asset managers representing $40 trillion, or more than 55% of global assets under management
Regards,
Ted
http://blogs.wsj.com/moneybeat/2016/07/18/after-worst-year-since-crisis-asset-managers-need-to-change/

Interesting find on 50/50 of RPG/RPV out performing RPS but I suspect that they might be temporary and the next 5 or 10 years could be different. CAPE is a good find as welI, I don't own it but I do own DSEEX and am very happy with that fund. I also do like SPHD, the results so far have been excellent. I just wish it was Schwab ETF One-Source.

"I'm proud to report in the face of that volatility and turbulence the total fund was able to return a modest, positive return for the year," said Eliopoulos

Only CalPERS would be proud of an 0.61% gain in the past year. Their return was the same as a riskless investment in an ultrashort term bond fund. I'll bet the management fees were higher than the fund returns.

Hi Guys,
Only on rare occasions does my wife read my posts. That’s too bad since her IQ is two standard deviations higher than mine, and her reviews often generate constructive suggestions. That didn’t happen in my earlier post which she has subsequently read and has identified some shortfalls. Based on her critique, here are a few additional thoughts on the topic.
I was far too circumspect in getting to an Indexing investment approach. And I only cited Warren Buffett as an Indexing convert. He is just one from a pantheon of famous, skilled financial professionals who have changed horses, and now endorse Index investing for a major portion of most individual investor’s portfolios. Charles Ellis and David Swensen are two other excellent examples.
In the Charles Ellis case, it is not a recent conversion. My wife reminded me of an article that Ellis wrote in 1975 that made the argument using mostly sports analogies. The published work is only a short 7 pages. Here is a Link to that pioneering piece:
https://www.ifa.com/pdfs/ellis_charles_the_losers_game_1975.pdf
Please give it a visit. It is a breezy piece of work with many familiar, understandable analogies – some even appropriate in today’s investment world. Enjoy.
Even at that early date, Ellis argued that investing had morphed from a Winner’s Game to a Loser’s Game because of the fact that well trained and well financed professionals were now competing against their equals rather than against much less informed amateurs. Ellis was still singing the same song when he updated his “Winning the Loser’s Game” book in 2010.
David Swensen wrote a nicely reasoned forward for that edition. He became a more recent convert while planning his “Unconventional Success” book. He changed horses when preparing the text for that volume. He realized that “The overwhelmingly large number of investors should seek membership in the passive management club”. That realization prompted him to completely reorganize his work in progress. Private investors can not practice what Yale does with its portfolio.
Investment advice comes in many colors and in as many flavors. Choosing to disregard most of it while accepting a small fraction is a difficult challenge. Getting similar advice from such financial lions as Buffett, Ellis, Swensen, and other industry superstars makes the decision a little easier.
In the end we always get to choose. To choose wisely is yet at another level. Good luck to all.
Best Wishes.

FYI: California Public Employees' Retirement System posted a slightly higher-than-expected 0.61 percent net return on investment for the 12-month period that ended June 30, the pension fund's Chief Investment Officer Ted Eliopoulos said on Monday.
Regards,
Ted
http://www.reuters.com/article/usa-calpers-investment-idUSL1N1A40SW