John Bogle: Stock Market Loss

Posted by admin on Sunday, October 2, 2022

Meaning of John Bogle Money Quote: saying it should be expected to see wild swings in the stock market. John Bogle said:
 
20% loss in the stock market, you shouldn’t be in stocks Quote
 

“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks” — John Bogle

 

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In this quote, John Bogle seems to be advising that individuals should only invest in stocks if they have a sufficiently long investment time horizon and high risk tolerance. Some key points:

  • Bogle notes that anyone who has significant difficulty envisioning or accepting the potential of a 20% drop in the stock market at some point should not be investing in equities.
  • He appears to be saying that only investors who understand short-term volatility is inevitable and have the fortitude to wait out downturns rather than panic-selling belong in the stock market.
  • The quote implies that stocks are inherently risky assets which may experience sharp corrections, so they are not suitable for those who will be overly stressed by such inevitable short-term drawdowns.

Overall, Bogle seems to be cautioning that investing in stocks requires emotional preparedness to withstand sizeable temporary losses, as such fluctuations are a normal part of equity market cycles. His advice is that if the prospect of a 20% decline causes undue anxiety, one’s risk tolerance may be insufficient for the long-term ups and downs of the stock market.

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