Stock Selloff May Be More Than Halfway Over: Bogle

The stock market bloodbath is probably more than halfway over, but investors who can’t stand more pain should get out and into cash, Vanguard Group founder John Bogle told CNBC.

“Unfortunately I think it is going to be bad timing but if you can’t afford to lose another penny or another nickel, you have to get out,” said Bogle on Squawk Box.

He said if investors had stuck to an age-related retirement formula, in which your bond position equals your age, investors could have avoided much of the pain.

Watch Bogle's interview at left.

“That kind of account is barely affected by this market decline," he said. "Maybe it is off three or four percent, rather then 30 percent. So if people had done their job of asset allocation and diversification, they shouldn’t be in that situation.”

Bogle said there is some light ahead.

“You have to assess not only the probabilities of what lie ahead—and I think the probabilities are that this is well over half way over in the stock market.  [But] I think we can look out there a little bit over the next months and see some improvement finally.”

“But that’s probabilities," Bogle added. "I am no expert and nobody is an expert about the exact amount of probability. Maybe the odds are two to three to one that that may be the case.”

He said this “is the most speculative market in the history of American finance” and that “the speculators are betting that things are going to get worse."

They are “very nervous and they want out. So let them out!"

© 2012 CNBC.com