I'm in the same boat here. Sitting on about $150k in cash, and was waiting to time the market, but by Bejamin Graham standards, the current PE ratios are way out of wack.
So I went on Quora and asked the question if it was a good strategy to put money into bonds and hold out until the market PE ratio dipped below 15, and then buy into a market index fund. The feedback was that the dividend yield that I was missing out on when PE ratios >15 would offset the benefit of buying into the market when the PE ratio was low.
I back tested it on a spreadsheet using ASX monthly figures and Australia 10Y Bond yields from Oct 2016, back to May 1992. See -
https://docs.google.com/spreadsheets/d/1gP4B65EU52gPOk8a-pt83HZ-rI0-QImEjJgxc4wxbrY/edit?usp=sharingIt seems that what they said makes sense at least tested on that timeline.
Strategy 1: Invest $1000 per month in ASX index fund, regardless of price.
Strategy 2: Invest $1000 per month in bonds when Market PE Ratio <15, then when PE ratio drops <15, sell bonds, buy into market, and continue putting each 1000 months into market until it goes >15 again.
Total invested over timeframe = $294,000
Portfolio value Strategy 1 = $933450
Portfolio value Strategy 2 = $926696
Perhaps I'm making some errors in the calculations - which I'd be keen to hear if anyone has thoughts.
It looks to me however, that trying to time the market like in strategy 2 isn't worth the effort. If anything, it's worse.