Contrasting Strategies

I have two investing books in my room here. Neither of them are recent. One of them is from the 90s by Gordon Pape, the other one is from the 80s by VanCaspel. Two very different times and two very different approaches. My memories of the 80s are largely that of cartoons and elementary school and to me, the 90s were about Jr high, and high school. My focus wasn't on economics at the time. Anyway, from the data that I could obtain, the 80s were an inflation dominated era. Interest rates were soaring to combat that. The 90s were the lead up to the bursting of the telecom bubble. Bre-x minerals was a big thing. Interest rates were dropping as inflation was brought under control.
The two of them have some very contrasting approaches and I think it's partly due to the situations at the time of writing, but their advice does have a certain timeless element to it. VanCaspel's advice was to take up equity stakes, ignore bonds, and pick good mutual funds that outperforms indexes. Interestingly enough, mutual funds seldom outperformed indexes then, but some did. Now I can't seem to find any that have consistently outperformed indexes. Anyway, that aside, I think the expectation back then was that inflation was here to stay.
Gordon Pape on the other hand recommends holding a balanced portfolio at all times. He talks of making good returns on bonds during times of falling interest rates. Strip bonds were one of the things that he talked about too. I'm told that they tend to have less price stability than interest paying bonds. That is the selling point for strip bonds though, larger price swings mean higher capital gains. Also higher losses when things go wrong too. Granted, a big miss there should mean good times for something else.
There are some compelling arguments for either approach. In the end though, I think I'd have to side with Sun Tsu's timeless advice about trying to prepare for potential losses. We must not count on the enemy not attacking but instead on our ability to receive him. Applied to this situation, it means running with a balanced portfolio. When things go wrong, it isn't as bad.