You are not likely to make anything on bonds--they are just for ballast in this kind of buy and hold scenario. What bonds have done in the last 20 years is unlikely to be repeated. OK to have 30% or 40% or 50% bonds if you are old, but at age 30, I would not be owning any bonds. At that age, I would maybe do 90/10 or 85/15 stocks/cash. I would mix up the stocks (some international and emerging markets and significant exposure to small caps) and would try to find a way to tilt toward value. Even an equal-weighted portfolio of S&P 5 is superior to cap-weighted SPY. Point is, you can find some mix that's better than SPY, and it should not too expensive if you use Vanguard ETFs and don't rebalance excessively. HOWEVER, a buy and hold portfolio only works if you truly buy and hold. Most people repeatedly sell at the bottom and buy near the top. Gotta set some rules for allocation, frequency of rebalancing, and time during which you will stay the course, then slavishly follow them.
Agree with most of your post. Only thing i would add is people who sell at the bottom are investors with aggressive allocation. I would use this as guide for allocation for any aged person. http://corporate.morningstar.com/us/documents/ResearchPapers/2013TargetDate.pdf Bogle's idea of thumb is also good (%ge of bonds is equal to one's age). Regarding future bond return, current yield equals expected future return.
@scr12: AAPL and GOOG were truly for illustration purposes only that I wanted a simulator that can simulate anything; not that I would go for that individual stocks. @fickletrader: Really thank you for your input that is nice: actually, I slept over the question a night or two; now it's not that interesting anymore. OK, one graph would be truly interesting still: bitcoin/USD cash: 50/50: from the beginning (no ticker for bitcoin). Thank you! But as we are at this topic: what is this Portfolio workstation you work on? Is it an expensive subscription? If I put Portfolio Workstation into the search engine: I got something totally different: http://www.iluv.co.uk/for-ipad/prof...with-detachable-bluetooth-keyboard-new-ipad-3