Bogle Sees Stocks Doubling Bonds in Next Decade

A decade ago, Vanguard founder and investment legend John Bogle said bonds were in for a nice run and stocks were headed for tough times — a prediction that turned out to be quite true. Now, he sees better times ahead for stocks.

Bogle thinks stocks should do “about twice as well as bonds over the coming decade,” Kathy Kristof writes in the Chicago Tribune. Bogle also thinks gold, which has been quite hot over the past several years, isn’t the place to be. “Most investors should stick with the chocolate and vanilla of the investment world — U.S. stocks and bonds, he said,” writes Kristof.

But while he thinks it’s reasonable to expect annual returns of about 8% for stocks in the coming decade, Bogle doesn’t think investors should load up on stocks, because most can’t handle the short-term volatility.

“Stocks should do about twice as well as bonds over the coming decade,” he said. “But what good is that going to do you if, when stocks drop 50 percent as they are likely to do at some point, you say, ‘I’m out of here?'”

Bogle continues to espouse his belief that index funds are the best way for investors to buy stocks. He says the portion of your portfolio invested in bonds should match your age, with the rest in stocks, Kristof writes.

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