Bogle was reacting to an article in the "Wall Street Journal" describing a "lost decade" in the stock market, when an index fund based on the S&P 500 would be lower today than it was roughly ten years ago when adjusted for inflation.
"What it doesn't say...is this, that we have these decades where returns are low," Bogle said. "The bad decade was really quite predictable."
He pointed out that at the beginning of the period covered in the Journal article, stocks were selling at a record 32 times reported earnings, and are now about 40 percent cheaper.
"It's a different story, and a far better story, but still not, I think, a good story," he said. "I think we should be a little bit cautious, make sure we've got a few bonds in our portfolio -- a lot of bonds, if you're older, and not so many bonds, if you're younger."
He also advised investors to look for low-cost mutual funds, one of Vanguard's trademarks.
"Get the costs out of your equation," he said. "The more subdued the market returns are in the future, the bigger a hunk your costs will take out of that return. Get the costs out, be careful, have a little bit in bonds, be very diversified, and, I guess, hold onto your hat."