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Jack Bogle on the Market Volatility

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    Vanguard Group Founder Jack Bogle on the wild swings in the market.

  • Duration 4:46
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Or legendary investor -- all those the first is that you can't time the market right about now maybe that is not to make a dramatic move in this market.

Jack why not.

Well this market is a speculative market highly speculative market it's going up and -- and kind of what can only be described as an in the same way as best week.

It's inexplicable really how markets can go up.

That particular point one day and down four -- the next and I mean them down 600 points -- up 400 and then down 500 it just makes no offense at all.

And and the reason is that we've we've that we had this tremendous amount of speculation.

In stock prices and what people are gonna think next.

About the next move and in fact no value is created in the stock market or destroyed by all -- foolishness.

Stock market value is created by corporate America.

So when you see corporate America fifteen trillion dollar.

Bag of money altogether capital and SL of these big swings can say well I was -- because -- -- today.

But only -- working for you today that's just not configurable what about the way the world works but what about the -- Term investors deducted doesn't get obsessed.

By these data date vagaries of another words they might be dollar cost averaging a putting a little in every month.

Should date change that posture or.

No them to over the long term investor in the and a lot of matching in the in the technical sense actually is aided by volatility -- -- a lot fewer shares when not.

When the stock when it bought his way up -- a lot more shares on the stock market way down there's no reason that this continual long term investment program.

In fact we think about a nail and these long term buyers should be open for a big bear market.

I what do you looking for by the way -- -- looking for big bear mark net know what I think the market is.

With with a big exception which audience that it is pretty fairly valued the dividend yield of about 2.2 percent.

Which happens to be the yield in the ten year treasury.

Usual kind of a coincidence today.

And -- the core corporate earnings I think over the next decade ought to be grown around 5%.

That's just 7% investment returns of stocks should do a lot better than bonds over the next ten years -- again.

Fight your way through all this noise that we hear every day.

Now the big carry out.

Is that we have in fact that Americans -- good argument but if you know lost the ability to govern ourselves -- my outlook is very DM.

Despite -- those washingtonians.

Have refusing to compromise for the good of the country.

-- the go to the people are being hurt in America today.

That's not gonna get us anywhere so we we have to have some political reality.

Some reasonable -- brought the brought to the centers as president Lyndon Johnson's -- years ago come letters reason together and He always won those arguments million -- that it's.

I'm wondering -- -- mean that you know we remember August as as as -- -- problematic month.

But altered times a shark first surged to an even more problematic -- specifically.

Crazy October's.

Do you see that -- round.

Well I think -- -- that market -- certain patterns and then you've described him pretty accurately but it's not that every October as the bad October.

Have or that there's a real that we -- another thing we always -- of the year and we've been in the predominant.

Number -- is it a year end rally following the October unpleasantness.

And whether we'll get there this year I think that's a short term focus.

The like it always get people.

When you get in these times of trials and tribulations.

At times that try men's souls or at least investors souls.

In the ended there's a tremendous that EM behavioral.

Pressure to say.

Did it don't just did then don't stand there do something -- and them in -- 99% of the time I think the better decision.

-- is don't do something just stand there watch and think about the long term picture actually it's allocated right.

If you're young you can afford a lot and -- you're investing for a lifetime.

And it year old or how little better -- when word dry powder -- the form bonds.

And that formula is gonna work as well in any -- -- -- out there.

Actually a couple considered people -- It may not be the best investment strategy ever devised this on a bond index fund on the stock index on in some proportion toward your age.

It may not be the best index.

And the best investment strategy ever -- But the number of strategies that are worse is Internet.

And you know what you've got a pretty good track record that's not bad advice.

On -- -- good good hearing you again my friend be well towards.

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