Good points. I have some doubts about both stocks and gold. With stocks, I worry that PE multiples are just a figment of the human imagination and mood (or index-based money flows), and that we could see 20 years of reducing multiples -- destroying all returns, even when there is fundamental corporate growth.I agree with you that stocks pose a similar problem. The difference is that I am an optimist when it comes to stocks, so I would not have a problem rebalancing into stocks during a bear market, at least as long as I am a saver (once retired I will be more cautious).
With gold, I worry that it's just a speculative trading vehicle that's also just a function of the human imagination and mood.
But at least I have similar feelings on both stocks & gold in my allocation. I don't feel compelled to pour money into one over the other; I'm neutral on them relative to each other. I am confident that I can rebalance between them just fine. I'm a bit more worried about taking money out of bonds (which I trust) and putting them into either stocks or gold.
But 60/40 doesn't save me from that problem either. The benefit of this allocation is that I believe in the fundamentals of risk parity and asset class diversification. It also will help to see steady annual returns, which should help keep me calm and know that it's working as planned.