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And this is why investing I don't invest in index funds.

Pooge 3y ago
I really don't see how one example of an index going down makes all the others a bad investment. Sure the Nikkei is diversified across industries but it's not comparable to international indexes.
- lucianbr 3y ago
  I think the point is that "indexes are overall superior to stock picking, and always go up over long periods of time" is disproved by the history of Nikkei. Sure, at a given time and place, an index may be better. At other times one or two stocks may be better. But I think the "time in the market beats timing the market, always" is kind of negated by Japan's lost decades.
  - adastra22 3y ago
    Cherry picking the ONE counter example is not proving your point.
  - KptMarchewa 3y ago
    Second part of typical boglehead advice which you conveniently ignored is dollar cost averaging.
- riffraff 3y ago
  That's not the only issue with this reasoning, this index is not a total returns one. And if you had been investing regularly you'd have bought companies at the Lowe price, which has produced a 2-3 times return in the last ten years. Still, I also prefer global indexes.
derriz 3y ago
Investing in the (broad) index doesn’t promise a positive real return. It promises lower volatility than any stock picking strategy. If you want exposure to the Japanese economy, then index investing is still the right choice if you want to maximize return for a given volatility.
- silverquiet 3y ago
  If you’ve got a stock picking strategy that promises a real return, I’m all ears. As far as I know, the market makes no promises period.
- EVa5I7bHFq9mnYK 3y ago
  It depends on the % of investors that are in those broad indexes. If too many people flock into them, they become more risky than an average stock. And stocks in indexes become overvalued compared to stocks not in indexes.
KptMarchewa 3y ago
I've heard index funds require you to buy them only in single installment. Buying them over time to minimize impact of some peak is not allowed.
- Pooge 3y ago
  Which is completely countered by purchasing ETFs.
strikelaserclaw 3y ago
investing in anything carries some degree of risk?

I really don't see how one example of an index going down makes all the others a bad investment. Sure the Nikkei is diversified across industries but it's not comparable to international indexes.

lucianbr 3y ago
I think the point is that "indexes are overall superior to stock picking, and always go up over long periods of time" is disproved by the history of Nikkei. Sure, at a given time and place, an index may be better. At other times one or two stocks may be better. But I think the "time in the market beats timing the market, always" is kind of negated by Japan's lost decades.
- adastra22 3y ago
  Cherry picking the ONE counter example is not proving your point.
- KptMarchewa 3y ago
  Second part of typical boglehead advice which you conveniently ignored is dollar cost averaging.
riffraff 3y ago
That's not the only issue with this reasoning, this index is not a total returns one. And if you had been investing regularly you'd have bought companies at the Lowe price, which has produced a 2-3 times return in the last ten years. Still, I also prefer global indexes.

derriz 3y ago

Investing in the (broad) index doesn’t promise a positive real return. It promises lower volatility than any stock picking strategy. If you want exposure to the Japanese economy, then index investing is still the right choice if you want to maximize return for a given volatility.

silverquiet 3y ago
If you’ve got a stock picking strategy that promises a real return, I’m all ears. As far as I know, the market makes no promises period.
EVa5I7bHFq9mnYK 3y ago
It depends on the % of investors that are in those broad indexes. If too many people flock into them, they become more risky than an average stock. And stocks in indexes become overvalued compared to stocks not in indexes.

KptMarchewa 3y ago

I've heard index funds require you to buy them only in single installment. Buying them over time to minimize impact of some peak is not allowed.

Pooge 3y ago
Which is completely countered by purchasing ETFs.

strikelaserclaw 3y ago

investing in anything carries some degree of risk?