Jack Bogle says the market seems to be ignoring some big risks in the financial world, and he thinks stocks are poised for a below-average return over the next decade.

“There are financial risks, economic risks and the risk of war rising all over the world, particularly in the middle east,” Bogle told Switzerland’s Finanz und Wirtschaft (h/t ValueWalk). “And those are big risks. … But the market looks at them and says: ‘We don’t have to worry.’ Is the market right? Well, only time will tell. I’ve been saying for several years that we have a stock market that seems to be ignoring those kind of risks. I think we’re seeing a turn in lower global economic growth and a turn in lower corporate earnings and I’ve been telling people for years: When you can’t afford a 25 or 30% drop in the stock market you should not be in the stock market. I have no reason to think this will be a correction that strong but it easily could be.”

Bogle talks about the difficulty of trying to time the market, and says investors should continue to invest at regular intervals. He thinks stocks are going to underperform over the next decade vs. their historical average, however. “To get what I call the investment return, I add together the current dividend yield and the assumed earnings rate for the next decade,” he says. “Today, the dividend yield is 2%, and I think we probably will be able to get 5 or 6% in earnings growth annually over the next ten years. So in total that’s a 7% investment return, even if we use the lower number. Then there’s the question about a special return. That’s the change in the P/E multiple. Normally, if the P/E ratio is above 20 it’s likely to go down during the decade. So you can offset a point. In total that would be a 6% return on stocks over the next decade.”

But Bogle doesn’t see many alternatives. “For instance, you could choose to not invest at all. But that’s one way to make sure you will have nothing when you retire,” he says. “Inflation will eat away your cash. So it’s really about stocks and bonds: Hope for the best over the long term, hope for the productivity, hope for the imagination and hope for the competitiveness of modern capitalism to produce better and better goods and services for lower and lower prices. This is not a risk free choice. But I acknowledge that a portfolio with stocks and bonds is the lowest risk way of proceeding that I know of. So just make sure that your asset allocation suits your needs.”