Crash Warnings Are Piling Up on Wall Street. Jack Bogle Had a 6-Word Rule for Exactly This.

Jack Bogle's rule for a sell-off: "Don't do something, just stand there." A dollar in the S&P 500 fund at the 2007 peak fell to 44 cents by March 2009 and was worth $4.70 on Friday.

His second rule, your age in bonds with Social Security counted as a bond, puts a 70-year-old widow with $1.5 million and $2,900 a month in Social Security near 40/60, not the 70/30 she holds now.

Made inside the IRA the move costs $0 in tax, cuts her loss in a 2007-size fall from $592,974 to $338,842, and leaves $900,000 of bonds paying $43,560 a year, 87% of her spending with Social Security.

Jack Bogle's rule for a week like the one that just ended was six words long: "Don't do something, just stand there." The founder of Vanguard, who launched the first index fund for ordinary investors in 1976 and died in 2019 at 89, said it on CNBC in January 2016 during a global sell-off, had written it in his 2007 book, and repeated the 6-word rule for the rest of his life.

It is worth hearing again this weekend. The S&P 500 finished Friday 6% below its October 6 record after a 4.4% drop on Thursday and its worst week since April, and the crash warnings arrived in a pile: by Sunday afternoon four separate pieces predicting a crash or a bursting bubble sat near the top of the most-read lists, beside a fifth calling Berkshire Hathaway's record $377 billion of cash a warning. Those warnings are a sign of how nervous Wall Street has become after one bad week; they are opinions about what could come next, and none of their authors knows the date, and Bogle did not claim to. When he gave the rule in 2011, as MarketWatch later reported, he added that it was good only about 99% of the time.

Learn 7 Ways To Generate Income With A $1,000,000+ Portfolio

If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.

Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)

So what should a 70-year-old with $1.5 million actually do? Bogle left two rules, and the second one matters as much as the first. Take a 70-year-old widow with $1,050,000 in an IRA that was her late husband's 401(k), $450,000 in a brokerage account, $2,900 a month in Social Security and $90,000 a year of spending. Her husband set the accounts at 60% stocks in 2019, and the bull market since has carried them to 70%: $1,050,000 in stock index funds, $450,000 in bonds and cash. If that sounds like you, the numbers below are yours.