Tags: Bogle | stock | market | risk

Bogle: 'Stock Market Ignoring Risk'

By    |   Friday, 06 February 2015 11:06 AM

Volatility now reigns in financial markets. For example, oil prices soared 4.2 percent Thursday, after plunging 8.7 percent Wednesday. Jack Bogle, the legendary founder of Vanguard Group, finds the volatility worrisome.

"We live in a very uncertain and fragile world with big risks," he told Swiss business magazine Finanz and Wirtschaft. "Now, we have a little bump going on here, and if it gets more serious who knows really what's going to happen."

Bullishness now prevails in the stock market, but "bullish thinking changes for no apparent reason," Bogle says. "The market seems to have taken on a nervous cast and there is very little anybody can do about that."

And what dangers do stocks now face?

"There are financial risks, economic risks and the risk of war rising all over the world," Bogle says. "

"I've been saying for several years that we have a stock market that seems to be ignoring those kind of risks. I think we're seeing a turn in lower global economic growth and a turn in lower corporate earnings."

While he doesn't expect a 25 or 30 percent drop in stocks, "it easily could" occur.

Peter Boockvar, chief market analyst of the Lindsey Group, says the Federal Reserve may cause a correction for stocks if it raises interest rates around mid-year, as he and others expect.

"I believe that the end of Fed QE (which cannot be replaced by ECB QE in its influence) and growing possibility of a June rate hike, at the same time earnings growth is slowing, dramatically raises the risk of a stock market correction," Boockvar writes in a commentary obtained by CNBC.

"After six years into a bull market where valuations are very stretched, investors should be watching their back and not swinging for any fences anymore."

© 2020 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Finance
Volatility now reigns in financial markets. For example, oil prices soared 4.2 percent Thursday, after plunging 8.7 percent Wednesday. Jack Bogle, the legendary founder of Vanguard Group, finds the volatility worrisome.
Bogle, stock, market, risk
300
2015-06-06
Friday, 06 February 2015 11:06 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved