Bogle on Fundamentals vs. Emotions

Vanguard founder Jack Bogle recently offered his take on where the market and economy are headed, saying that he thinks stocks should gain about 7% per year in the next decade. Bogle tells Forbes‘ Steve Forbes that while emotions drive the market in the short term, fundamentals drive it over the long term. And right now, he says, given current fundamentals, a reasonable expectation would be for stocks to gain about 7% per year over the next decade. But Bogle also notes that “reasonable expectations” sometimes don’t turn into reality. He advises investors to “be a little careful out there” and lean to the conservative side, saying there may be somewhere between a 1-in-10 and 1-in-20 chance that we hit some “really, really tough times”.

 

 

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