A little over two years ago, I published Just Keep Buying: Proven ways to save money and build your wealth. Back then, it looked like my timing couldn’t have been worse. The S&P 500 was 8% off its highs and sentiment was deteriorating by the day. When the market reached its lows in October 2022, U.S. stocks were down nearly 25% and all of my haters made sure to remind me of it. They said things like:
“I’ve just kept buying and gotten poorer following this book’s advice.”
“Of course he published a book called ‘Just Keep Buying’ after a 10 year bull market.”
“Now do Japan.”
The last comment is a standard in the stock market bear’s playbook. Anytime someone argues that stocks will eventually recover from a decline, the most prominent counterexample is Japan, a country whose equity market crashed and then went sideways for over three decades. When I published Just Keep Buying, Japan’s Nikkei index had been below its 1989 highs for over 30 years:
Looking at this you can see why “Now do Japan” became such a meme for stock market permabears. Every time someone claimed that stocks usually recover, Japan was staring us right in the face. The bears were right to point this out. They were right to demonstrate that markets can take longer to recover than we initially imagine.
However, they were wrong to focus so much on Japan. Why? Because Japan had arguably the greatest asset bubble in history. And you shouldn’t make generalized arguments based on outlier performance.
But guess what? None of that matters anymore. If you’ve been following markets lately, you already know that the permabulls have gotten the last laugh. As the chart below illustrates, about two months ago, Japan’s Nikkei index surpassed its 1989 high
