Vanguard founder Jack Bogle says the stock market is a “giant distraction to the business of investing”. Over the long run, he tells Fox Business Network, stock returns depend on how well Corporate America does; but in the short term, stocks have “inexplicable ups and downs” based on people’s opinions — not facts. He says that given the current situation, the market is poised to deliver average investment returns of about 7% or so for the next decade, based on corporate earnings growth and dividend yield. But in the short term, it will deviate sharply above and below that figure based on investors’ mood swings. “People are better off not to pay any attention to it,” he says of the short-term swings. Bogle also says he thinks it will take about three years for the U.S. economy to be “doing what it’s supposed to do again”, and explains why.
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