[Analemma_]

> Though they varied in length and severity, the market always recovered and went on to new highs.

Not in Japan it didn't. If you bought a Nikkei 225 index in December 1989, your returns are negative to this day (apart from a very brief breakeven in 2024): that's 35 years and counting of the market not recovering and going on to new highs. And Japan's experience is probably going to become the norm rather than the exception, now that everwhere else is catching up to it demographically.

"The market always goes up in the long run" was an adage for a world of steady population and productivity growth, which is not the world we have now.

[throw0101c]

> Not in Japan it didn't.

Only if you were 100% JP equities without any diversification: if you had some (20%?) bonds (and rebalanced), or had an international equities (and rebalanced), you were probably fine.

* https://www.bogleheads.org/blog/2017/02/06/a-short-study-of-...

* https://www.gocurrycracker.com/lessons-from-japans-lost-deca...

> Using Portfolio Charts withdrawal rates calculator, which uses data going back to 1970, a Japanese investor (experiencing Japanese inflation and spending Yen) with a 60% allocation to Japanese stock and 40% allocation to intermediate-term Treasuries had a 30 safe withdrawal rate of 3.2%.

* https://www.bogleheads.org/forum/viewtopic.php?t=306752

Even the (S&P 500) had ten years of zero returns, and the only thing that would given a US domestic investor positive results was a bond component (and rebalancing):

* https://www.forbes.com/sites/advisor/2010/09/13/its-not-real...

[Analemma_]

Real interest rates in Japan were zero or negative for pretty much all of that same 35-year period, so bonds wouldn't have helped you either. And "you were up if you bought international equities" kind of proves my point: if Japan is the harbinger for the rest of the world, there will be no more "always up" markets to flee to.

[throw0101c]

> Real interest rates in Japan were zero or negative for pretty much all of that same 35-year period, so bonds wouldn't have helped you either.

The main thing that bonds would have helped with was in the 1980s: by regularly rebalancing to (say) 80/20 you would have taken profits off the table regularly. Further taking that (e.g.) 80% equities and putting and putting some in ex-JP/in-US would have further helped.

Even for US investors the data/research suggests some international exposure leads to better results:

* https://www.youtube.com/watch?v=1FXuMs6YRCY

Further, it looks like even in the US it hasn't been "the US market" that has done well, but rather tech specifically:

> Looking at this data, there are two distinct periods of extended U.S. outperformance—the late 1990s and today. And what do these two periods have in common? The rise of U.S. technology stocks. Bespoke Investment Group recently created this chart illustrating this phenomenon:

> Now that the U.S. technology sector makes up over 30% of the S&P 500 (as it did back in 2000), this begs the question: Is U.S. outperformance just a technological fad?

* https://ofdollarsanddata.com/do-you-need-to-own-internationa...

So, slightly contra Buffett, you're not entirely "betting on the US" but rather "betting on US tech".

[skippyboxedhero]

One of the mistakes that people make is not understanding that people tend towards solutions that are sold as "counter-intuitive" or "smart" because they are largely unable to independent decisions. And financial markets will respond and move in the direction of maximum pain (governments can pump trillions into the market to support them but, eventually, as has happened in Europe and now the US...they run out of taxpayer's money because this destroys productivity). Easy decisions don't exist.

ETFs are a better technology (marginally, they don't solve the issues of open-end funds) but they are primarily a psychological product, not a financial one.

[fransje26]

> if Japan is the harbinger for the rest of the world, there will be no more "always up" markets to flee to.

There is a Dutch saying that says:

  Trees do not grow to heaven

The nonsense will have to stop one day.