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I agree that the American stock market has been an outlier, and most Americans don't realize the extent to which that is true; it's good that you do. But compar

I agree that the American stock market has been an outlier, and most Americans don't realize the extent to which that is true; it's good that you do. But compared to buying and holding a widely diversified and low cost portfolio, what was the better strategy for investors in other markets? What would be the better strategy for Americans over the next 40 years (not knowing if it will be a miserable time or not)? I think this is a case of "time in the market" being the least worst option. The market may reward it, or it may not, but hard times are hard times and I don't see any obvious way to avoid them without exposing yourself to a lot more risk in other ways.

oceanplexian 3y ago
People keep talking down the US but the only advanced economy reliably innovating at scale. Especially in the post-COVID era, as China faces growth collapse. You don't have to look far to see that all the major tech developments of our species are coming out of the US: Generative AI, Reusable Rockets, self-driving cars, mRNA, Genetic Engineering, NIF Fusion, VR, etc. The US could strike it out on any single item and spark another industrial revolution. Plus we're still king of the hill in so many other categories (World's largest producer of energy, world's largest agriculture producer, world's largest military, etc.) If you're an investor, the idea that you'd bet against the US economy is a hilariously bad take.
- reducesuffering 3y ago
  Good investing has never been about X will make a lot of money, buy X. It's about what price are you buying the money that X will make. Right now, a lot of future money US will make is baked into the price of those US companies. You'll pay $100 for $4 of US earnings or $8 of UK/Japan/Netherlands/Canada/Sweden/etc. earnings. People already expect US earnings growth to be almost double. The question is do you think it will outpace even that? Even if you think US earnings growth will be somewhat better than the rest of developed economies, it's a worse investment. For example, developed economies index, VEA, outperformed US, VTI, last year.

oceanplexian 3y ago

People keep talking down the US but the only advanced economy reliably innovating at scale. Especially in the post-COVID era, as China faces growth collapse. You don't have to look far to see that all the major tech developments of our species are coming out of the US: Generative AI, Reusable Rockets, self-driving cars, mRNA, Genetic Engineering, NIF Fusion, VR, etc. The US could strike it out on any single item and spark another industrial revolution. Plus we're still king of the hill in so many other categories (World's largest producer of energy, world's largest agriculture producer, world's largest military, etc.) If you're an investor, the idea that you'd bet against the US economy is a hilariously bad take.

reducesuffering 3y ago
Good investing has never been about X will make a lot of money, buy X. It's about what price are you buying the money that X will make. Right now, a lot of future money US will make is baked into the price of those US companies. You'll pay $100 for $4 of US earnings or $8 of UK/Japan/Netherlands/Canada/Sweden/etc. earnings. People already expect US earnings growth to be almost double. The question is do you think it will outpace even that? Even if you think US earnings growth will be somewhat better than the rest of developed economies, it's a worse investment. For example, developed economies index, VEA, outperformed US, VTI, last year.