In other words, investing with a margin of safety should be a major consideration for every investor.

Think about it, did it make sense to have the same allocation to equities in 2000 as it did in say March of 2009? A strategic asset allocation would have had the same percentage allocated to equities when they were selling at historically expensive prices compared to earnings as when they were selling at a fraction of those prices a few years later.

Every investor should have capital preservation at the top of their list of requirements when determining asset allocation. Stay focused on your behavior. Are you putting a set amount in equities because that is the approach you have been taught. Or, are you choosing an asset allocation that places your odds of success heavily in your favor?

This article has been republished with Arbor Investment Planner.