John Bogle, who created the $77.6 billion Vanguard 500 Index Fund in 1976, said U.S. stocks have already suffered the bear market's worst losses and the economy is stabilizing.
The Standard & Poor's 500 index plunged 38% last year, the biggest annual decline since the Great Depression, and sank to a 12-year low in March. The measure rebounded 40% through June 12, the steepest rally in seven decades, on speculation that government efforts to end the first global recession since World War II are working. It then fell 5.6%, spurring investor concern that the three-month advance would be wiped out.
"We have had a market crash and we may well have seen the lows for the year," Bogle, 80, said in an interview Wednesday. "It's a normal recovery from a shocking market crash."
Government stimulus measures will help slow the economic contraction, Bogle said. "I can see moderate growth or stability within the next year," he said. "We'll level off, because there are too many positive trends going on in the economy. But I don't foresee a robust recovery."
