With Fiscal Spending Pushed Out on a Rampage along with Drunken Sailor Money Printing by the Fed's Stocks and Bonds REMAIN at Nose Bleed Levels. This WILL NOT END WELL!!!

 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]

Lump Sum any amount greater than yearly salary.

PE10  ..........38.18
Bond Rate...2.42%

EYC Ratio = 1/PE10 x 100 x 1.1 / Bond Rate

1.75 plus: Safe for large lump sums & DCA

1.30 Plus: Safe for DCA

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

1.00 or less: Sell stocks - Purchase Bonds

Current EYC Ratio: 1.20(rounded)

As of  8-1-21
Updated Monthly

PE10 as report by Multpl.com

Bond Rate is the rate as reported by

Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX)

DCA is Dollar Cost Averaging.

Lump Sum is any dollar amount greater than one year salary.

Over a ten-year period the typical excess of stock earnings power over bond interest may aggregate 4/3 of the price paid. This figure is sufficient to provide a very real margin of safety--which, under favorable conditions, will prevent or minimize a loss......If the purchases are made at the average level of the market over a span of years, the prices paid should carry with them assurance of an adequate margin of safety.  The danger to investors lies in concentrating their purchases in the upper levels of the market.....

Common Sense Investing:
The Papers of Benjamin Graham
Benjamin Graham

DYI:  If you have been following the EYC ratio for a few years you now have a vast majority of your savings in bonds.  This is significant buying power being built up for when the next opportunity arrives with stocks massively undervalued with a lump summing investment.  At that time stocks estimated average annual return 12 to 15 years out will be in the range of 15% to 25% plus as opposed to today’s forward return that is NEGATIVE -3% to -5%!!

So hold onto your hats and cash/bonds better valuations are ahead.

DYI