It looks like Morningstar's John Rekenthaler is mostly sick of all of the reflection on the five-year anniversary of the financial collapse. But he's going to partake in it anyway, at least where Jack Bogle is concerned.

Since 2008, Vanguard [profile] founder Jack Bogle has only gained more credibility, Rekenthaler says. The financial collapse is partially responsible for strengthening it, as the failure of active U.S. stock-fund managers to outperform the sinking stock market proved Bogle correct, Rekenthaler writes.

Along with Bogle's reputation, the idea of buying on a strong decline also remained intact, Rekenthaler writes. Rekenthaler reports that in the last 50 years, stocks have fallen at least 35 percent from their peak four times, in 1974, 1987, 2002 and 2008. In all four cases, the stock market surged strongly once it began to rise again, Rekenthaler writes.

The idea of "risk on, risk off" hasn't remained intact, however, Rekenthaler says, as emerging markets have changed. Many investors believed that a time when central banks were free and asset prices were moving up and there was more than enough optimism, "risk on" trades would occur and emerging markets would rise. But lately, the risk has been on but emerging markets have been off Rekenthaler writes.

To read more, click here. 

Edited by: Casey Quinlan


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