JACK BOGLE WARNS: Prepare For Two Massive Market Declines In The Next Decade

Business Insider

Jack Bogle is the founder and chairman of mutual-fund giant Vanguard Group and is widely credited for popularizing index funds, a staple for buy-and-hold investors.

Today, he was on CNBC, and he had a bit of a startling prediction.

CNBC anchor Scott Wapner put the question to Bogle: "You say, 'prepare for at least two declines of 25-30 percent, maybe even 50 percent, in the coming decade.' For a buy-and-hold guy, that's a little concerning, don't you think?"

Bogle replied: 

Not at all. They come and go. The market goes up, and the market goes down. It's never failed to recover from one of those 50 percent declines.

I went through one in 1973-1974, I went through one in 2001, 2002, 2003; I went through another one 2008-2009. They're kind of scary – often terrifying – but it's typical.

Why it doesn't bother me is if you hang on through the cycle, that's the only way to invest. Trying to guess when it's going to go way up or way down is simply not a productive way to put your money to work.

Bogle's comments don't represent any sort of shift in his philosophy – he remains as big a proponent of buy-and-hold investing as ever.

Of course, if Bogle is right about two 50-percent declines in the next decade, it's going to be a trying experience for the buy-and-hold crowd.

Click here to watch the full interview >



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