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Bogle: Now's the Time to Dive Into Stocks

By Dan Weil   |   Monday, 27 Oct 2008 01:30 PM

John Bogle, the legendary founder of Vanguard mutual funds, says the recent meltdown in the U.S. stock market has turned equities into a juicy buying opportunity.

"The probabilities for stock market investing right now are very compelling," Bogle, who created stock index funds, told The New York Times.

Already the S&P 500 stock index had plunged 44 percent from its record high of Oct. 9, 2007. That marks the fourth-worst bear market in history.

As a result, stocks have a good chance to produce annual returns of 9 percent over the next decade, in line with historical averages, Bogle says.

Bogle recommends looking for stocks or mutual funds that an investor can hold for the long term as part of a diversified portfolio.

As a rule of thumb, he says an investor's percentage holdings in bonds should equal their age. So if an investor is 40, he or she should allocate 40 percent of assets to bonds and 60 percent to stocks.

Given that stocks can easily fall further before rebounding, some investors should avoid the market now, according to Bogle. "If you cannot afford to lose another penny, then you have no recourse but to get out."

Other experts also are bullish on stocks. Barton Biggs, who runs hedge fund Traxis Partners, told Bloomberg that, "U.S. and European markets have blown out to record levels of attractiveness versus bonds."

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John Bogle, the legendary founder of Vanguard mutual funds, says the recent meltdown in the U.S. stock market has turned equities into a juicy buying opportunity."The probabilities for stock market investing right now are very compelling," Bogle, who created stock index...
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2008-30-27
 

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