Bogle, 79, has been warning for years about the excesses of Wall Street, where, he says, the triumph of "salesmanship" over financial "stewardship" produced colossal losses for millions of people. He is armed with statistics showing that a vast majority of investors - including most professional investment managers - should not even bother trying to pick individual stocks.
They are just not very good at it, he says. Better to invest in the broad market through index funds with low costs, allowing the shareholders, and not the investment managers, to profit when times are good.
As for trying to time the ups and downs of the market, Bogle contends that the chances of being right over any extended period are so negligible that it's a fool's errand to try.
Yet for simple, straightforward reasons, he says that this is a very good time to put money into stocks - not for short-term trades, mind you, but as part of a diversified portfolio that you hold for many years.
"The probabilities for stock market investing right now are very compelling," Bogle said by telephone from his office at the Bogle Financial Markets Research Center, on the Vanguard campus in Malvern, Pennsylvania. The cataclysm in world financial markets has brought down valuations to fairly attractive levels, he said, improving the prospects that the broad stock market, over the next decade, can earn an annualized return of perhaps 9 percent.
So this isn't the time to sell, he said, but he allows one big exception: "If you cannot afford to lose another penny, then you simply have no recourse but to get out of the stock market."
Stocks could easily fall further, and if you aren't in a position to absorb more losses, you must protect yourself. And retirees should hold a big dollop of bonds, which generate income and provide ballast in a shaky market. "Investing isn't just about probabilities," he said. "It's about consequences, and you've got to be prepared for them."
But for long-term investors who can afford to wait a decade or more before cashing out, the probabilities are much better right now than a year ago, precisely because of the terrible beating the market has taken.
Of course, that doesn't mean you should put all of your holdings into stocks - "unless you're just starting out in investing and you're very young, and you have very little to lose, and an awful lot to gain," he said. Everyone needs to examine their particular situations and tailor an individual strategy. Nonetheless, he offered some rules of thumb that, he said, "will keep you out of trouble."
First, hold bonds - preferably in a truly diversified, low-cost index fund, and in an allocation roughly equal, in percentage terms, to your age. If you're 50, for example, consider holding 50 percent bonds and 50 percent stocks. "This is simplistic, and of course you need to look at your own situation," he said, and adjust the bond proportion up or down depending on your needs and level of risk-aversion.
If half of your portfolio was in the Vanguard Total Bond Market Index fund this year, that fixed-income portion would have held its own - on Thursday, it was down 0.2 percent for the year - and mitigated sharp losses in the equity part of your portfolio.
If the equity half was in the Vanguard Total Stock Market Index fund, your equity allocation would have lost 37.4 percent through Thursday. The net loss in your portfolio would have been just a bit more than half of that, or 18.8 percent. If you held more of the bond fund, your losses would have been lower.
Once you've set up a conservative, balanced, broadly diversified portfolio, as well as a way to add to it regularly, try to let it be. Don't check your returns daily.
Unless you're a market pro, and maybe even if you are, daily market averages are mainly noise, distractions without much meaning or use, he said.
Bogle has lived with a transplanted heart since 1996, and while he has retired from management of Vanguard, he still works energetically, giving speeches and writing books about Wall Street's mistakes and the benefits of investing with a low-cost index fund approach.
He says that despite "an orgy of speculation" that has hurt the global economy, he remains convinced that if long-term investors stick to the basics, "put blinders on" and try to have "strong stomachs," they can ride out the rough patches and ultimately prosper.
"If you were to put your money away and not look at it for many years, until you were ready for retirement," he said, "when you finally looked at it, you'd probably faint with amazement at how much money is in there."