Investing

Jack Bogle says he hasn't seen a market this volatile in his 66-year career

Key Points
  • "I have never seen a market this volatile to this extent in my career," Bogle said Thursday on CNBC's "Power Lunch."
Bogle: This volatility is of interest to speculators, not long-term investors
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Bogle: This volatility is of interest to speculators, not long-term investors

Vanguard founder and former CEO Jack Bogle thinks the stock market is more volatile than at any other point in his extensive investing career.

"I have never seen a market this volatile to this extent in my career," Bogle said on CNBC's "Power Lunch" Thursday. "Now that's only 66 years, so I shouldn't make too much about it, but you're right: I've seen two 50 percent declines, I've seen a 25 percent decline in one day and I've never seen anything like this before."

His comments come amid a period of significantly higher volatility in equity markets. Wall Street has grown increasingly wary on a number of fronts, including a potential tit-for-tat trade war between the U.S. and China as well as increased scrutiny of the technology sector, one of the market's largest sectors by market cap.

The S&P 500 has posted 26 moves of at least 1 percent since the year began with often wild swings from one day to the next.

Both the Dow Jones industrial average and the have fallen into correction territory in 2018. At its lows, the 30-stock Dow shed more than 12 percent from highs reached in January before paring those losses. The S&P 500 remains down more than 7 percent from its own January high.

The Cboe volatility index (VIX) – widely considered the market's best fear gauge – is just under 20, higher than any point in the unusually calm 2017.

Bogle has had a storied career on Wall Street and is largely known for founding Vanguard Group in 1975. Under his direction, the firm eventually became one of the most widely regarded in passive index investing, one of the most popular ways to play the market.

As of the latest reading, Vanguard Group oversees roughly $5.1 trillion in assets under management, according to its website.

But despite the dramatic moves on the Street, Bogle largely sees the turbulence as merely "noise."

"When all these people look at some future forecast — of let's say interest rates or inflation — and sell, somebody else is buying," Bogle quipped. But despite downplaying turbulence itself, the longtime investor did note that volatility could have negative downstream effects for long-term investors.

"Stocks go from hand A to hand B, from buyer to seller or seller to buyer, and I think it sometimes concerns the true long-term investors," he said. "It disturbs the investors because they see this and they think it's significant. If it's significant to them, and they panic in a big market decline and get out, they're the losers."