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The Nikkei 225 is back at levels not reached since 1989.*

The 34 years it has taken to regain its footing is a record, too, for a major market and is a decade longer than Wall Street took to recoup losses from the 1929 crash.

Back in the 1980s, Japanese companies were on top of the world - according to Reuters data, representing 45% of global stock market value at their peak, versus just 6% now.

Kinda what you would have expected from those valuation levels? (45X Earnings! US Market Currently 27X.)

Higher valuations = lower future returns, it's basic math.

How lucky we are that this could never happen here! ;)

Cheers!

Of course still far short of the inflation adjusted level of 1989.*


https://www.reuters.com/markets/asia/nikkei-partie...

The fact the nobody reports the real return in connection with stories like this pretty much tells you what you need to know about day to day financial journalism.

Here is a calculator that will show real returns on the Nikkei.

https://dqydj.com/nikkei-return-calculator/

Baltassar

The Nikkei 225 is back at levels not reached since 1989.

This is yet another example of taking a cherry-picked start date to scare people out of buying stocks. How many people do you know who made a one-time lump-sum investment in the Nikkei at the peak, and never invested again? I know zero people who did that.

Far more realistic is the Japanese worker who saved $10K every year from his paycheck, and dollar-cost averaged every month into the Nikkei (buying $833 of the index every month.) Here's how that investor did.

Nikkei Total Returns: Portfolio Value at Year End
                    1989    1999       2009        2019       2021
Buy $833 every              (10 yrs)   (20 yrs)   (30 yrs)    
month               $833    $99,827    $158,429   $617,545    $802,280

After 30 years, $299880.00 invested, he/she ends up just over doubling their money ($617,545).
That's better then not investing, but doesn't look that good to me.

he/she ends up just over doubling their money ($617,545). That's better then not investing, but doesn't look that good to me.

So don't invest in the Nikkei then. I never did.

Arguing like this is pointless. With the full benefit of hindsight, bears can cherry pick any start date and end date to make their case. And bulls can do the exact same thing.

For example, I can cherry pick that David Gardner and the TMF Stock Advisor service selected Nvidia as a top pick way back in 2005 at a split adjusted price of - wait for it - $1.63. If you had followed that recommendation and bought $5,000 worth of NVDA, your investment would be worth $2.4 million today. But the bears will just tell me that yeah, but NVDA had several 50% drops along the way, and TMF had a bunch of other recommendations over the years which fell like a rock or went nowhere. Which is also true. Can't win these arguments, because both the bulls and bears are arguing from their emotional perspectives.

The important thing is that once you win the game, i.e., once you hit your financial independence/retirement number, that you need to reallocate your portfolio in a way that makes sense for you, and lets you sleep at night.

I wasn't arguing :-)
I just looked at your more "reasonable example" and thought that it didn't look that good to me.

*"realistic example"*

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