John Bogle, the legendary 80-year-old founder of mutual fund giant, The Vanguard Group, said stocks already have hit their low point for 2009.
The market sank to a 12-year nadir March 6 and since has rebounded more than 30 percent, one of the biggest rallies in history.
Those gains came amid optimism that the federal government’s massive fiscal and monetary stimulus will spur economic recovery.
“We have had a market crash, and we may well have seen the lows for the year,” Bogle told Bloomberg. “It’s a normal recovery from a shocking market crash.”
The stimulus measures will help end the recession, he said.
“I can see moderate growth or stability within the next year,” Bogle said. “We’ll level off because there are too many positive trends going on in the economy. But I don’t foresee a robust recovery.”
Bogle said, “There’s this feeling that we are in a so-called ‘new normal’ area. Instead of 3 percent economic growth, we should be thinking more about 2 percent economic growth over the next 10 years.”
Mohamed El-Erian, co-CEO of bond fund manager Pimco, and Bill Gross, head of the world’s largest bond fund (Pimco Total Return), agreed.
“Any recovery is likely to reflect ‘new normal’ GDP growth rates of 1 percent to 2 percent, not 3 percent plus, as we used to have,’’ Gross wrote on Pimco’s Web site.
“Staying rich in this future world will require strategies that reflect this altered vision of global economic growth and delevered financial markets.”
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