DYI Comment:  The above chart is equity allocation based on surveys for institutions and individuals as to their holdings of common versus competing asset categories(primarily bonds) then overlaid with the Shiller PE10.  All an investor would need to do in order profit from the great rises and falls of the market is to subtract the current allocation from 65 to obtain the contrarian equity allocation.  65% - 30% = 35%.  A very simple yet effective management tool placing one's monies in the opposite direction of the crowd.

DYI's averaging formula using the Shiller PE10 is along those very line with the chart above.

 % Allocation Formula

9-1-15
Updated Monthly

% Allocation = 100 – [100 x (Current PE10 – Avg. PE10 / 2)]  /  (Avg.PE10 x 2 – Avg. PE10 / 2)

Current PE10.....25.01

Avg. PE10.........16.62

% Stock Allocation 33% 

DYI