RetireJapan

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Oh, it is NOT a calculation

But something like 40% stock market crash combined with the yen strengthening by 33% would do it.

Could be worse, of course
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I see Well, it works for me!

Deep Blue wrote: ↑Sat Mar 02, 2024 4:18 am

TokyoWart wrote: ↑Sat Mar 02, 2024 3:34 am

concerned wrote: ↑Fri Mar 01, 2024 12:14 pm “ But one would expect the markets to recover”
It took in excess 15 years recover from the 1929 crash and the Nikkei took in excess 30 hope we do not see something like this

The recovery for stocks in the US was only 5 (for broad market) to 7 (for the DOW) years after the 1929 crash if you account for reinvestment of dividends (which reached 14% at one point) and the effects of deflation. Those exaggerated recovery lengths come when only looking at the price of an index and ignoring both total return and the effects of inflation/deflation.

This is an extremely important point, the vast majority of long term returns from equity investing come from re-investing dividends. We all know the power of compounding over the long term, and the dividends you receive and reinvest at the start of a thirty or fourty year investment will provide a significant chunk of long term returns.

I always sigh when I see the index levels being quoted as it's just part of the story.

Just a related question of curiosity--this week the nikkei re-achieved 38,900, and virtually all stories/articles look at the simple index.

Would anyone know how it has done when calculated with dividends reinvested? (as in these posts)

id highly recommend be prepared for the real possibly for most of the countries that is effected by the dollar for a possibly long term stagflationary enviroment

captainspoke wrote: ↑Sat Mar 02, 2024 10:53 am
Would anyone know how it has done when calculated with dividends reinvested? (as in these posts)

i'll check on my Bloomberg terminal on Monday. It's more useful to look at Topix to be honest, it's a much more representative index as it's market cap weighted unlike the archaic Nikkei with price weighting. I can plot both though.

Deep Blue wrote: ↑Sat Mar 02, 2024 11:42 am

captainspoke wrote: ↑Sat Mar 02, 2024 10:53 am
Would anyone know how it has done when calculated with dividends reinvested? (as in these posts)

i'll check on my Bloomberg terminal on Monday. It's more useful to look at Topix to be honest, it's a much more representative index as it's market cap weighted unlike the archaic Nikkei with price weighting. I can plot both though.

No hurry, just wondered given the discussion. And sure, topix would be fine.

captainspoke wrote: ↑Sat Mar 02, 2024 10:53 am

Deep Blue wrote: ↑Sat Mar 02, 2024 4:18 am

TokyoWart wrote: ↑Sat Mar 02, 2024 3:34 am

The recovery for stocks in the US was only 5 (for broad market) to 7 (for the DOW) years after the 1929 crash if you account for reinvestment of dividends (which reached 14% at one point) and the effects of deflation. Those exaggerated recovery lengths come when only looking at the price of an index and ignoring both total return and the effects of inflation/deflation.

This is an extremely important point, the vast majority of long term returns from equity investing come from re-investing dividends. We all know the power of compounding over the long term, and the dividends you receive and reinvest at the start of a thirty or fourty year investment will provide a significant chunk of long term returns.

I always sigh when I see the index levels being quoted as it's just part of the story.

Just a related question of curiosity--this week the nikkei re-achieved 38,900, and virtually all stories/articles look at the simple index.

Would anyone know how it has done when calculated with dividends reinvested? (as in these posts)

Here you go. https://indexes.nikkei.co.jp/en/nkave/index?type=index all the different flavors of the index.

RetireJapan wrote: ↑Fri Mar 01, 2024 12:57 pm After some thought, I have cashed out 1/3 of our 2024 gains.

It is about two years' worth of living expenses, so will make a difference if we get a crash or the yen strengthens. If things keep going up then we'll make slightly less money but I think it is worth that tradeoff.

I see no issue with this, it is a comfort thing.

But, why are you 20% in international bonds if you're going to hoard cash?

Tsumitate Wrestler wrote: ↑Sat Mar 02, 2024 1:36 pm

RetireJapan wrote: ↑Fri Mar 01, 2024 12:57 pm After some thought, I have cashed out 1/3 of our 2024 gains.

It is about two years' worth of living expenses, so will make a difference if we get a crash or the yen strengthens. If things keep going up then we'll make slightly less money but I think it is worth that tradeoff.

I see no issue with this, it is a comfort thing.

It was a 'comfort thing' when I declined to buy more All Country in the new year because it was at an all time high. Guess what. It continued higher. So I bought higher. You either time the market or you don't. That is timing, but your message is always not to do so. So which is it? If you are no longer investing, then fine; to the victor go the spoils. Otherwise, I don't think it's a good idea to meddle.

Tsumitate Wrestler wrote: ↑Sat Mar 02, 2024 1:36 pm

RetireJapan wrote: ↑Fri Mar 01, 2024 12:57 pm After some thought, I have cashed out 1/3 of our 2024 gains.

It is about two years' worth of living expenses, so will make a difference if we get a crash or the yen strengthens. If things keep going up then we'll make slightly less money but I think it is worth that tradeoff.

I see no issue with this, it is a comfort thing.

But, why are you 20% in international bonds if you're going to hoard cash?

That is a really good question. I'm going to have to think about it.

Current possible answers: for medium term spending, to rebalance/have 'dry tinder'.

But those answers are not good enough. I suspect our cash pile is just going to grow in the future, so maybe we don't need the bonds any more.

banders wrote: ↑Sun Mar 03, 2024 8:31 am
It was a 'comfort thing' when I declined to buy more All Country in the new year because it was at an all time high. Guess what. It continued higher. So I bought higher. You either time the market or you don't. That is timing, but your message is always not to do so. So which is it? If you are no longer investing, then fine; to the victor go the spoils. Otherwise, I don't think it's a good idea to meddle.

Investing is a bit like losing weight. It's very simple and the actual steps of eating less, eating healthier and doing more exercise are not rocket science. Same with long term investing - buy a simple low cost diversified passive equity fund and then don't touch it.

However, in practise it is harder and emotions and real life get in the way of both.

Just like eating half a packet of biscuits, the urge to take profit is strong... and we can always find ways to justify why it's "ok" to do what we want...