Vanguard founder Jack Bogle says he thinks the turmoil in Japan and the Middle East will make for short-term troubles, but he expects Japan to recover and says investors should not get out of the stock market.
“Be very careful about your asset allocation. I would never get out of the stock market,” Bogle tells CNBC. “In Japan, they will recover from all this. You can argue I think that it’s a little bit like what World War II did for the US — called on enormous productive facilities and finally a huge overemployment,” he said. “That’s what really a lot of people feel brought us out of the Great Depression.”
Bogle reiterated his belief that older investors should be more allocated toward bonds, with your age generally matching the percentage of your portfolio that you have in bonds. As for the Middle East tensions, he said it’s difficult to predict what will happen. “We love the explosion of democracy over there, but it’s hard to see that Egypt is going to be a more stable country.”