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Comment by i3oi3 | Hacker News Reader

I was discussing low-load index investing with a friend, and the 7% over the last 200 years sounds great.

He suggested the hypothesis that that's a reflection of the rise of the United States as a superpower over the last 200 years, and if anything were to impugn the United States' status as the market of refuge, those numbers would not be predictive of consistent long-run returns in the future.

That's a hard hypothesis to refute. Are there similar long-run numbers from all stable countries around the world, or is the US market unique in that aspect?

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Here's a source referencing the UK stock market: https://globalfinancialdata.com/stocks-for-the-very-long-run...

"Between 1692 and 2018, stock prices increased at an average rate of 1.87% per annum before inflation and 0.36% after inflation, and with reinvested dividends averaging 5.04% per annum, investors received a total return of 6.62% per year. £1"

Now, that being said, during this time frame, clearly the UK is also a western superpower, and after a certain point in time the UK & US stock markets probably have a very strong correlation with the rise of electronic trading/risk management.

For another example of an older equity market, we might look to Japan, which has had a negative rate of return: https://www.afrugaldoctor.com/home/japans-lost-decades-30-ye...

That being said, as we see in that article the monthly $833 purchase DCA still gave a positive return over 30 years.

I think it's hard to compare Japan with the US or UK or other countries because unlike those countries, Japan can't turn on what I'll call an immigration valve and just flat-out import people to grow the economy.

Can't or won't?

Would be much harder even if they wanted to. Lots of countries teach their kids English, only one teaches their kids Japanese.

You don't need to speak the local language to live and work some place. I wouldn't be surprised if the majority of migrant workers (temporary or permanent) around the world are unable to speak the local language upon entry.

That works in America and the UK because there are already large immigrant communities for you to arrive into. If you arrive in Japan speaking Spanish or Hindi today, how's that going to go?

It's not impossible, but it would take a lot of time and Japanese culture isn't exactly known for xenophilia.

The xenophobia is the point of the reply I assume. Financial life isn’t that great for most of the world. People will go places for a better life. Language isn’t going to stop that. Xenophobia will.

It’s completely possible. Most people in e.g. Qatar can’t speak much Arabic. The most common languages spoken in the Gulf are Hindi and English.

I doubt that Japan will be going in that direction any time soon, but if they wanted to, they could.

Both really. They can't because they won't, but also because they can't.

only so much space on an island. Japan is pretty crowded as it is, isn't it?

About the size of east coast, from Canada to Florida. It’s fairly large.

Tokyo is crowded, however.

Not at all. It's largely a chain of mountains so most people live down on the coasts.

Don’t forget the high taxes on investments in Japan. Basically, US is good for investors but Japan is good for workers. Japan’s median wealth is higher than US.

Not sure I would call Japan good for workers. There is a reason for japanese having the word "karoushi", which has the meaning of a person that has died due to overwork.

The US stock market is semi-unique: there are others around the world in the 20th-21st centuries that are comparable, but also correlated.

https://en.wikipedia.org/wiki/List_of_stock_exchanges

UK stock markets have returned a similar 7.5% over the last 119 years (~4.9% above inflation).

MSCI China over the last 2 decades has returned over 12%.

> MSCI China has returned over 12%

Not per year: https://www.msci.com/documents/10199/aa99c3a4-d48b-44ac-8caa...

I tried to look up what you said about China. IShares MSCI China ETF data on portfoliovisualizer.com only goes back to 2012 and shows 4.27% returns .

I don't know if your statement about MSCi China is correct but if so you are cherry picking based on an unusual start date.

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