There's an "awful lot" to worry about in the marketplace these days, but if investors avoid all the noise and focus on the long term, they can be successful, index mutual fund pioneer Jack Bogle said Tuesday.
"This is a hard time to invest because there aren't a lot of good options to stocks, and bond yields are extremely low," said Bogle, who founded The Vanguard Group in 1974 and launched the first retail index fund a couple of years later.
"That's a scary thing because it can't stay that way forever," he said. "So, I do advocate a cautious approach to investing."
However, while a sharp rise interest rates would "certainly" lead to a decline in stocks, the market has had declines "forever," Bogle said.
"I've been through, I think, four 50 percent declines, at least three, and we get over them and march on," he noted. "It's a good idea to not pay too much attention to the stock market and think about the long-term productivity of business."
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Therefore, Bogle advocates investing in the overall stock market—and not individual names—as well as putting some money in short-term or intermediate-term bonds.
He called stocks "fairly reasonably valued" if you take their earnings yield into account.
"You've got to keep investing in stocks and bonds, because I don't think the other alternatives—commodities, for example, or gold—have any long-term return prospects at all," he said.
"Go into the casino, which is what Wall Street is today, bet on the entire stock market. And then get out of the casino and never show yourself there again."