Margin of Safety!

Central Concept of Investment for the purchase of Common Stocks.

"The danger to investors lies in concentrating their purchases in the upper levels of the market..."

Stocks compared to bonds:

Earnings Yield Coverage Ratio - [EYC Ratio]

EYC Ratio = [ (1/PE10) x 100] / Bond Rate

2.0 plus: Safe for large lump sums & DCA

1.5 plus: Safe for DCA

1.49 or less: Mid-Point - Hold stocks and purchase bonds.

1.00 or less: Sell stocks - rebalance portfolio - Re-think stock/bond allocation.

Current EYC Ratio: 0.87

As of 04-1-14

PE10 as report by Multpl.com

Bond Rate is the Moody's Seasoned Aaa Corporate bond rate as reported by the St. Louis Federal Reserve.

DCA is Dollar Cost Averaging.

DYI Comments:  Despite the Fed's engineered sub atomic low interest rates the U.S. stock market is poised to under perform the bond market over the next 7 to 10 years.  It is time to re-think your stock/bond allocation before the market re-prices to a lower level.

DYI