CHICAGO - Jack Bogle is still holding court, and his message has not changed.

Buy-and-hold domestic stocks and bonds, cheaply, in an asset allocation that is appropriate for your age. Then let it play out, over time, so that it ultimately works in your favor.

The founder of the Vanguard Group Inc., the man behind the first retail index fund, and a longtime champion of the small investor, Bogle is now 80, and his health has been poor of late. He had a heart transplant 13 years ago and has spent "the extra time I've been given" as something of the people's champion, taking on the investment community's flawed thinking and bad behavior, and calling out individual investors for making the entire investment too hard by shooting for the moon, rather than going for steadier returns over time.

Before speaking at the Morningstar Investor Conference here Thursday, Bogle warmed up in an interview that covered a wide range of topics. Here are the highlights:

On what he has heard from investors:

"It depends on whether they simply heard 'Buy an index fund' or if they got it right and listened to the whole story. I have been saying for more years than I care to count not to forget bonds. And start to think about it as a rule of thumb, having your bond holdings equal your age."

On the economy:

"We can't fix our economy now, today. We can move in a direction of fixing it, but when you think about what is happening, it's very obvious: We have to save more. When you see the savings rate going from 0 percent a year-and-a-half or two years ago to 4 percent or 5 percent today, well, we're not actually saving that much more money today. We're un-dis-saving - paying off credit cards and mortgages. That's not the same thing as adding to the amount you have to spend. It counts as savings and should count as savings, but the economy is crying out for us as consumers to spend more collectively, and we're not about to do that individually because we don't know where our job is going to be in the next year. It is what [economist John Maynard] Keynes called the paradox of thrift. It is good for us to do what we are doing, saving money, but it's bad for the economy.

". . . I'm not saying the economy won't grow, starting maybe in a year from now. I'm no expert, but as far as I can tell, the economy is leveling off right now and may have a little further to go down, but when it comes back, the old 3 percent real growth, which is the rate the economy has grown at, well, I think that is too aggressive. We're looking at much slower economic times."

On what a slower economy means for investors:

"The first thing they must realize is that the stock market tends to anticipate things. We have had a stock market crash of the largest proportions probably of the last century, with the possible exception of 1929 to 1933. We have had a big stock market crash. Do we have to have another one? I don't think so.

"The market has either exactly got it right - and is therefore valued in the proper levels - has overestimated the dangers that lie ahead and is, therefore, cheap, or has underestimated the dangers that lie ahead and is therefore expensive. Those are the three options. And I would guess the market probably has it about right. I would guess that we have seen the low for the year and maybe the low for this cycle."

On how the fund industry responded to the financial crisis:

"I'd say we did a bad job. Embarrassment is right. Annoyance, even anger, that the industry turned out not to be this wonderful stewardship business, but a great big salesmanship business of new products."

Chuck Jaffe is senior columnist for MarketWatch. You can reach him at cjaffe@marketwatch.com or at Box 70, Cohasset, Mass. 02025-0070.