Meb's point about individual bonds is one we've made many times. Yes, you get your money back at maturity, but think about someone who bought a 15-year Citibank (C) bond in 2020 yielding 2% or so. They have nine more years taking in a yield that is way below prevailing market rates. That 2% has been way below market rates for four and a half years already. They are carrying the position way below their price, so if they sell, they're locking in a big loss.
One of the comments nested under there somewhere, someone said they were 60% alts and 40% cash with no other details. There are enough different kinds of alts now that someone could diversify idiosyncratic risk and avoid loading up on the same provider, but backtesting probably wouldn't help; a lot of the funds are too new. Your AI of choice could probably help you poke holes in various ideas to avoid certain types of mistakes, like unintentionally loading up on credit risk.
If put together correctly, a 60/40 alts/cash mix could probably deliver a solid real return, but I would not expect that to return anything close to equities, and the differentiation versus a more traditional 60/40, like with VBAIX, will be difficult to endure every so often. A lost decade for equities would be a different story, provided there isn't too much unintended equity beta in there; again, AI can help with that.
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