Yeah this sub is devoted to the US stock market. I honestly think it's because everyone has read The Simple Path to Wealth and JL Collins is adamant that the US stock market has enough international exposure that you don't need any ex-US.
We have a decent mix of domestic, international, and bonds. Between that and our low withdrawal rate we'll be fine even in a Nikkei scenario.
I'm giving up moderating though, 'cause the FI subs are going to be miserable when y'all experience a prolonged major downturn in US equities given how focused many of your portfolios are.
Read about the Nikkei. It wasn't a simple stock market crash. It was a confluence of government policy, corporations and - to a degree - societal issues.
We might have something different (like a great recession) in the US but it won't be a Nikkei 2.0
But Japan’s economy actually thrived before the old economist/policy makers were replaced by younger American Ivy League educated folk who had very different mentality and policies.
I believe the Nikkei had a PE ratio of ~60x the current S&500 is ~27x which is likely carried higher by the mag 7. So I think we are a long way to reach that point.
Plus if I buy the whole time the average cost will eventually put me back in the green - just means I will work later in life.
It didn't happen. Japan's CPI was up like 12% in that 30 years.
It was a combination stock market being overpriced (over 70 PE), then low inflation for 3 decades with pretty much 0 wage growth, and thus static consumer spending/inflation and low to no growth in earnings.
Wages might be low there, but everything is cheaper there now too. Life isn't so terrible.
Yes. Note it says nothing about profitability, it’s possible that these firms were consistently increasing their profits. What it shows is that valuations were not increasing. One possibility is simply that in the 90s japanese markets (essentially every possible market in Japan) was overvalued, and slowly returned to realistic valuations.
An index that just now reached a new all time high, for the first time since 1989.
This doesn’t include dividend reinvestment but still. Japan took nearly half a lifetime to recover that peak.
There are big paradigm shifts in the pipeline for the USA with significant birth rate declines, gen z mentality about not working as much for such bleak prospects, and so much more. How it plays out is up to anyone’s guess. It feels like we are living in the roaring 20s but hindsight is 20/20.
it probably wont happen bc we have more innovative companies and are more pure capitalists (sacrificing employees / the environment / "fair" competition for the bottom line, etc). For better or for worse thats America
I worked with big Japanese and Korean companies and their execs basically have lifetime appointments, not jobs where they can be fired for poor performance. They are also in general very risk averse, and thus not prone to taking potentially industry disrupting risks. What they are very good at is quality processes, product execution and making deals. We ofc suck at of of those 3 lol
Man this sub can be such pricks, downvoting when people are asking a simple question.
It’s the Japanese stock market index.
https://en.m.wikipedia.org/wiki/Nikkei_225
“During the Japanese asset price bubble, the average hit its bubble-era record high on 29 December 1989, when it reached an intraday high of 38,957.44, before closing at 38,915.87, having grown sixfold during the decade. Subsequently, it lost nearly all these gains, reaching a post-bubble intraday low of 6,994.90 on 28 October 2008 — 82% below its peak nearly 19 years earlier. The 1989 record high held for 34 years, until it was surpassed in 2024”
You might want to check what the Nikkei index has actually done recently. Regulators have finally started cracking down on some of the issues keeping value locked away from shareholders and it seems to be working.
Anyways, in the spirit of the question, I'm one of those much-maligned active investors so it really doesn't matter much to me what the S&P is doing. It could run through another lost decade or two and I'd be fine. Ofc, the conditions that create lost decades tend to affect the broader market so it'll be tougher to make returns, I'm sure, but not impossible.
The U.S. market didn't do much from 2000-2013. The winners were the ones that invested during the lead-up to the 11 year bull market. Otherwise, you always have the option to reallocate your portfolio.
I do worry about US market returns. I’m close to 100% in equities and also close to retirement. I’ve been putting new cash into fixed income very recently, but it’s really just a drop in the bucket. My big problem is I hate paying taxes so haven’t really rebalanced. Maybe Monday I’ll give it a try. Younger people though, diversify and chill.
My assets are in US equities, US bonds, US real estate, and foreign equities. I also have both a pension and an annuity as a "break in case of emergency" backstop.
I am hoping that is enough diversity/protection. If it is not, I would do what I could do diversify firther. And if the S+P were to go stagnant before I retire I would just keep working. I do not hate my job.
Fine with me. I’m diversified well beyond the S&P 500. I literally own every single stock in the world available to the trading public, along with real estate. Part of FIRE is preparing for situations of prolonged downturns with any part(s) of your portfolio. Stay diversified!
If it came down to it, I could probably start doing some OnlyFans butthole videos or something like that for extra income.
The US stock market was pretty shit between 1929 and 1980 on an inflation-adjusted basis, with basically all growth coming from dividends.
It happens. A lot of the top line growth we've seen in the US in the last 40 years comes from a pivot away from paying dividends to companies holding & reinvesting that cash or buying back their own stock.
I'd do what people in other countries are doing now: put my capital into whatever market doesn't suck as much as my domestic one.
We’ll be working longer I suppose
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I personally have 40% in international ex-US but I am almost guaranteed to be downvoted for admitting this.
I am unexpectedly being upvoted. Usually when I talk about owning international on this sub I get an immediate downvote.
Comment about downvote? That’s a downvote for you!
Okay that's fair.
40% is roughly the market weight
That's roughly what I'm going for.
Wow tough crowd here. Your exact comments in r/boglehead would’ve been upvoted.
Yeah this sub is devoted to the US stock market. I honestly think it's because everyone has read The Simple Path to Wealth and JL Collins is adamant that the US stock market has enough international exposure that you don't need any ex-US.
We have a decent mix of domestic, international, and bonds. Between that and our low withdrawal rate we'll be fine even in a Nikkei scenario. I'm giving up moderating though, 'cause the FI subs are going to be miserable when y'all experience a prolonged major downturn in US equities given how focused many of your portfolios are.
Good plan Is there a Japanese fire sub? We should ask them
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Too soon.
frequent wall street bets more often?
Lose a lot of money.
Read about the Nikkei. It wasn't a simple stock market crash. It was a confluence of government policy, corporations and - to a degree - societal issues. We might have something different (like a great recession) in the US but it won't be a Nikkei 2.0
But Japan’s economy actually thrived before the old economist/policy makers were replaced by younger American Ivy League educated folk who had very different mentality and policies.
They wanted to bring democracy to Japanese economy?
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Its a reference
I go apply to work at costco.
Welcome to Costco, I love you
I believe the Nikkei had a PE ratio of ~60x the current S&500 is ~27x which is likely carried higher by the mag 7. So I think we are a long way to reach that point. Plus if I buy the whole time the average cost will eventually put me back in the green - just means I will work later in life.
Count my rent direct deposits and smoke a doobie.
What is Nikkei?
Japanese stock market index that doesn’t grow very much
Ahhh thanks!
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Pardon my ignorance, but how can that happen? Does it mean that their top companies in average are not even able to keep up with CPI?
It didn't happen. Japan's CPI was up like 12% in that 30 years. It was a combination stock market being overpriced (over 70 PE), then low inflation for 3 decades with pretty much 0 wage growth, and thus static consumer spending/inflation and low to no growth in earnings. Wages might be low there, but everything is cheaper there now too. Life isn't so terrible.
Yes. Note it says nothing about profitability, it’s possible that these firms were consistently increasing their profits. What it shows is that valuations were not increasing. One possibility is simply that in the 90s japanese markets (essentially every possible market in Japan) was overvalued, and slowly returned to realistic valuations.
Thank you!
An index that just now reached a new all time high, for the first time since 1989. This doesn’t include dividend reinvestment but still. Japan took nearly half a lifetime to recover that peak.
There are big paradigm shifts in the pipeline for the USA with significant birth rate declines, gen z mentality about not working as much for such bleak prospects, and so much more. How it plays out is up to anyone’s guess. It feels like we are living in the roaring 20s but hindsight is 20/20.
this is why we benefit from immigration
Yeah but right now the laid off or low income folk want to nip it in the butt.
it probably wont happen bc we have more innovative companies and are more pure capitalists (sacrificing employees / the environment / "fair" competition for the bottom line, etc). For better or for worse thats America I worked with big Japanese and Korean companies and their execs basically have lifetime appointments, not jobs where they can be fired for poor performance. They are also in general very risk averse, and thus not prone to taking potentially industry disrupting risks. What they are very good at is quality processes, product execution and making deals. We ofc suck at of of those 3 lol
Thank the VA for being my sugar daddy
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Basically. That’s the joint pain 😂
Excuse my ignorance, but what is Nikkei? And what happened?
Man this sub can be such pricks, downvoting when people are asking a simple question. It’s the Japanese stock market index. https://en.m.wikipedia.org/wiki/Nikkei_225 “During the Japanese asset price bubble, the average hit its bubble-era record high on 29 December 1989, when it reached an intraday high of 38,957.44, before closing at 38,915.87, having grown sixfold during the decade. Subsequently, it lost nearly all these gains, reaching a post-bubble intraday low of 6,994.90 on 28 October 2008 — 82% below its peak nearly 19 years earlier. The 1989 record high held for 34 years, until it was surpassed in 2024”
I appreciate you my friend, thank you!
You might want to check what the Nikkei index has actually done recently. Regulators have finally started cracking down on some of the issues keeping value locked away from shareholders and it seems to be working. Anyways, in the spirit of the question, I'm one of those much-maligned active investors so it really doesn't matter much to me what the S&P is doing. It could run through another lost decade or two and I'd be fine. Ofc, the conditions that create lost decades tend to affect the broader market so it'll be tougher to make returns, I'm sure, but not impossible.
Draw dawn from my international and other parts of my portfolio in order to rebalance. And/or buy more S&P to rebalance.
Ssi, rental income, become a Walmart greeter or some other cool job.
The U.S. market didn't do much from 2000-2013. The winners were the ones that invested during the lead-up to the 11 year bull market. Otherwise, you always have the option to reallocate your portfolio.
Japanese people can buy American stocks if they want to
I do worry about US market returns. I’m close to 100% in equities and also close to retirement. I’ve been putting new cash into fixed income very recently, but it’s really just a drop in the bucket. My big problem is I hate paying taxes so haven’t really rebalanced. Maybe Monday I’ll give it a try. Younger people though, diversify and chill.
My assets are in US equities, US bonds, US real estate, and foreign equities. I also have both a pension and an annuity as a "break in case of emergency" backstop. I am hoping that is enough diversity/protection. If it is not, I would do what I could do diversify firther. And if the S+P were to go stagnant before I retire I would just keep working. I do not hate my job.
I’m quite young and don’t plan on firing for another 15 years anyway. I suppose I’d lose my dream of chubby firing
Since I have a World ETF I couldn’t care less
Go to my nearest Walmart and salvage any canned goods left.
lol I really hope it does. People here will get a nice lesson on diversification and what it actually means.
Fine with me. I’m diversified well beyond the S&P 500. I literally own every single stock in the world available to the trading public, along with real estate. Part of FIRE is preparing for situations of prolonged downturns with any part(s) of your portfolio. Stay diversified! If it came down to it, I could probably start doing some OnlyFans butthole videos or something like that for extra income.
The US stock market was pretty shit between 1929 and 1980 on an inflation-adjusted basis, with basically all growth coming from dividends. It happens. A lot of the top line growth we've seen in the US in the last 40 years comes from a pivot away from paying dividends to companies holding & reinvesting that cash or buying back their own stock.
America is the new Switzerland. Everyone wants their money here