If You're In It for the Long Haul

Earnings yield is perhaps one of the most widely used metrics when determining overall market valuation. That's because it provides an easy and revealing way to look at the current valuation of stocks -- and to compare them to bonds, which compete with stocks for investors' capital.

So investors should pay attention to stock and bond yields, because the relationship between the two can be particularly revealing. The higher the yield on stocks is, the more attractive they are -- or, to put another way, the more undervalued they are. So if the earnings yield on stocks is higher than yields on bonds, stocks are considered more desirable (i.e., more undervalued) vs. bonds -- and vice versa....458 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.