Investors pick a position and hold it for the long term instead of trying to pick the market's top, The Vanguard Group founder Jack Bogle said Monday.
"I don't think it's a good idea for investors to think about jumping on the bandwagon or jumping off the bandwagon," he said. "You know, if you look at the realities of investing, motion is the worst thing you could do. The more you trade, the less you make. The academic studies and Warren Buffett are going to tell you the same thing."
Bogle also called a comparison of today's stock market with the one in 1999 "simply absurd," noting that the market's current valuation was around 17 times earnings, while the earlier investment environment was 36 to 40 times earnings.
On CNBC's "Fast Money," Bogle recommended an asset allocation that includes a bond position, as well as stocks.
"Once you establish your stock-bond asset allocation, just hang on to it and enjoy the year," he said. "So, enjoy it, and don't think, 'Has it gone too far? Has it gone far enough?' Because nobody knows."
Bogle noted that each year, investors trade approximately $33 trillion worth of stocks in a market worth about $17 trillion.
"All we're doing is trading with one another," he said. "So, this market is a great market for sellers and not such great for buyers because it keeps going up.
"That's the eternal equation for the stock market, and if people would just realize that, they'd stop trying to outsmart their fellow investors."
Trader disclosure: On May 20, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Simon Baker is long AAPL; Simon Baker is long C; Simon Baker is long GS; Simon Baker is long JPM; Simon Baker is long CSCO; Simon Baker is long YHOO; Simon Baker is long GOOG; Simon Baker is long EBAY; Simon Baker is long PCLN; Simon Baker is long JCP; Jon Najarian is long JPM; Jon Najarian is long ZNGA; Jon Najarian is long HLF; Jon Najarian is long DAL; Jon Najarian is long LCC; Jon Najarian is long XLF; Jon Najarian is long JCP; Jon Najarian is long NTAP; Jon Najarian is long OC; Jon Najarian is long TMO; Jon Najarian is long GTAT; Jon Najarian is long EMC; Jon Najarian is long COP; Jon Najarian is long GRPN; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long SPLK; Joe Terranova is long LNKD; Joe Terranova is long TBT; Joe Terranova is long SWN; Joe Terranova is long JULY CRUDE OIL FUTURES; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephanie Link is long TJX; Stephanie Link is long HD; Stephanie Link is long SWK.
