FYI: In case you’re thinking that it’s safe to dive back into the stock market, think again. Jack Bogle, the father of the index fund, is advocating caution. Over the past several years, index fund investors have reliably bought the dips in the stock market, expanding the valuations on growth stocks and helping push the S&P 500 higher. But that probably no longer is a savvy approach, says the founder of the Vanguard Group.
In a recent interview with Barron’s, Bogle warned that “trees don’t grow to the sky, and I see clouds on the horizon. I don’t know if and when they’ll arrive. A little extra caution should be the watchword.” Those clouds, he said, include large amounts of sovereign and corporate debt, the “great upheaval” in global trade, and “the mystery of Brexit, which will be very disruptive to the world trade system. Those things add up.”
Regards,
Ted
