[somenameforme]

Japan is notable because they're one of the clearest indicators that 'stocks always go up' is simply not true. This [1] is the Japanese stock market (Nikkei225) inflation adjusted. It reached its highest point in December 1989. It's unfortunate that that table ends in 2013 because obviously a huge amount has changed since then, but even in unadjusted currency [2], its current price is lower than in 1989.

For those who might not know in 1989 many were expecting Japan to imminently become the largest economy in the world, overcoming even the US. Then stagflation hit for reasons that are still not completely clear.

[1] - https://fred.stlouisfed.org/graph/?g=li7

[2] - https://www.cnbc.com/quotes/.N225

[koonsolo]

From an investor point of view, this is a wrong way of looking at it.

Companies can do 2 things with their revenues: reinvest into the company (stock price grows), or take it out as profit (dividends, value of company stays the same).

Only looking at stock price is too narrow minded. Maybe companies don't want to grow and just take the profit.

For the case of Japan, let's take a look at stock price + dividend reinvestments: Nikkei 225 Total Return (N225TR) https://www.investing.com/indices/nikkei-225-total-return-hi...

And what do you know, it grows.

[somenameforme]

The largest time frame I could find on the site you linked is a month. I was able to find a calculator for this exact thing here. [1] Adjusted for inflation, investing from December 1989 to February 2013 (latest date available on the site) an investment in the Nikkei, with a reinvestment of dividends in Yen, would yield a return of -6.2%. It'd be -48% had one chosen to invest to/from USD, owing to the collapse in exchange rate.

[1] - https://dqydj.com/nikkei-return-calculator/

[koonsolo]

So don't invest in 1989 and sell in 2013, any other time is more than fine.

Did you deliberatly pick those dates? I think so. Here is the chart: https://www.nikkei.co.jp/nikkeiinfo/en/global_services/nikke...

Let me pick the dates then: 2013 to 2023, annualized return inflation adjusted: 10%

[somenameforme]

1989 was picked as it was the peak of the Japanese economy, the point from which people thought the economy could only continue to grow even larger, because that's what it'd always done - basically the same sort of stuff you're espousing here. But of course that's not what happened - anybody who invested at that time (or in many years around) would have seen nothing but losses over the decades to come. The end date was a typo, of course I picked 2023, the latest date the site supports. Do it 1989-2013 and you'd have lost 64% of your money!

Not only is markets declining longterm an obviously possible outcome, but as population levels start to decline, it's likely to become more the norm than the exception. When your population is growing, each year all businesses naturally grow. When your population is shrinking, all businesses naturally shrink each year. Fertility collapse is going to shake the world like nothing before.

[koonsolo]

1989 until 2023 gives a 8.765% positive return with inflation.

[somenameforme]

I was going from December, as per my earlier comment. In any case, if we're engaging in good faith then of course even 8.8% after near to 40 years is not what people mean when they talk about the market being a stable investment. The comment that started our little thread said,

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It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon.

Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months.

My horizon is well over 5 years. It would be an easy way to slow or even reduce my net worth if I were to put it all in a savings account.

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He's clearly still expecting reasonable returns on mid-range time frames, which is what people mean when suggesting the market always goes up - not an annualized 0.25%, let alone loss, for the next 40 years.

[dgfitz]

If I understand your numbers correctly, that’s like, ~0.25% a year. Is that accurate?