Vanguard founder Jack Bogle says the stock market’s recent ups and downs are the most dramatic he’s seen in his decades-long investing career.
“I have never seen a market this volatile, to this extent, in my career,” said the 88-year-old Bogle in an interview Thursday on the CNBC show Power Lunch. “Now that’s only 66 years, so I shouldn’t make too much about it, but you’re right: I’ve seen two 50% declines, I’ve seen a 25% decline in one day, and I’ve never seen anything like this before.”
While none of the recent stock drops have been of that magnitude, the market has been gyrating recently. The past several weeks have seen some of the largest day-to-day point changes in the Dow’s history; at midday on Friday the Dow was down 35o points, or about 1.5%.
Even so, that’s partly a result of Dow’s current height of more than 24,000—which makes comparatively small percentage changes loom large when described in point terms.
Mathematical measures of stock market volatility indicate that recent activity is in fact unusual, but not as unprecedented as Bogle suggests. The Chicago Board of Options Exchange Volatility Index (often called the VIX), which is an indication of traders’ short-term market volatility expectations, recently spiked to above 20—its highest level since 2015. But it remains well below the levels it hit during the financial crisis, when it registered in the 50s.
Bogle’s advice to worried investors is to just tune out the market noise.
“This trading, this volatility, is of interest to speculators—but it is not of interest to long-term investors,” he said. “We he have a trading mentality that should not disturb long-term investors.”