Not exactly. If you're asking as a skilled money manager or investor, I'll give you X advice. If you're asking what I think the average Joe should do (someone with limited time and skill when it comes to money management), I'll give you Z advice. A lot of it depends on how hard you're willing to work to protect and grow your wealth.
If the market is near 13k like it is today, with corporate profit margins at all time highs (cyclically impossible that they'll stay up there), I'd say you should be out of the market. Corporations are accumulating debt at the fastest pace in history (which is one of the reasons they're also hoarding cash, as an offset). When rates spike higher as they eventually must, those companies will get demolished. Far better to wait for the next plunge and be opportunistic, than to hope for a few more points on top of this already huge several year run. Buffett's mantra works very well in that case: be greedy when others are fearful, and fearful when others are greedy.
Buy gold on big drops, like when it fell from $1900x to $1530x recently; but never chase it when it runs. Keep it a modest part of your portfolio (10% to 25% depending on your particularly preferences). It's not a growth vehicle, it's a wealth protection device.
Corporate debt is a great place to get good yield right now, but again you have to know what you're buying.
It's perfectly fine to take an annual hit on inflation against liquid dollars (granted that's under, say, 10%); better to have opportunity cash available. Typically people miss big opportunities because of a lack of cash. Really big opportunities are not that rare, they come around every 3 to 5 years, and the returns you can make off of them are extraordinary. You buy the Dow at 7,000 when everybody else is writhing in pain from the ride down from 14k.
Own commodities when they're occasionally cheap. For example, when potash crashed during the global implosion a few years ago, you could have purchased stocks like POT for 80% off. When oil was $10 or $12 circa the late 1990s, the common 'wisdom' was that oil was dead, a terrible investment, and so on. In reality, cheap energy is almost never a terrible long term invest. The human desire / need for cheap energy will continue to be infinite, which ensures that prices will swing up at some point (even if it takes several years).
Right now, I'd tell most people to look around themselves and invest there. Get a strategically better education perhaps; or find a good business to purchase or invest into. Something you can directly apply your sweat equity to with multiplication potential. Shield your wealth until you find the right opportunities; people seem to often undervalue patience. You don't need lots of homeruns, you need very few.
In this environment, it's all about having liquidity to be opportunistic. The volatility in the global economy is almost guaranteed to produce wild swings over time. When people panic, be there with your cash.
Half of your thesis is that gold is great because you don't have to do anything but sit on it and hold it, unlike stocks (we'll pretend that index funds don't exist in your fairy-tale world). The amateur investor can just buy and hold, no rebalancing necessary.
And then you turn around and, as investment advice, essentially say "The trick is to, without the benefit of hindsight, figure out what each next bull market is going to be, buy it at the bottom and sell it when it's at the top."
Fantastic fucking advice. Mind if I borrow your time machine sometime?
Unbelievable response. I am a lowly CS grad student at the moment so investment is not my greatest concern, but hopefully in the near future I will have some money to invest. When that day comes I will take a second look at your advice from a practical perspective. At this point it is fun to fantasize though...
