Can Stocks Go Down For 30 Years?

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In this video, I analyze different examples of stock markets that have gone sideways or down for many decades. The Nikkei is the preeminent modern example of a stock market that has gone nowhere for over 30 years, in spite of low interest rates and massive quantitative easing by the Bank of Japan.

I begin by looking at a long-term chart of the S&P 500, which shows that the index alternates between multi-year periods of trending higher, followed by choppy sideways motion that can last a decade or more. I believe that the 2020's will be another one of these sideways periods for the S&P 500, where the only investment return will come from the (fairly low) dividend yield.

I also discuss the Russian stock market in the wake of the Bolshevik Revolution, and the German stock market during World War 2.

Most European stock indices have gone nowhere since the late 1990's. When we look at the performance of major stock markets over the past 30 years as priced in gold, we see that most of them have massively underperformed since 2000. This suggests that much of the nominal upward bias in stock markets may be due to fiat currency devaluation more than anything else.

There is a good chance that the S&P 500 has just entered a lost decade and will trade sideways for the next 10 years. On the other hand, with the U.S. Dollar being the world reserve currency, the Fed may be able to inflate asset prices with much more success than the Bank of Japan had.

Either way, I expect physical gold, Bitcoin, and other scarce assets to outperform stocks in the coming decade. To get stocks to new all-time highs will require so much quantitative easing, that it will be impossible for gold and Bitcoin not to explode higher.

Not investment advice! Consult a financial adviser.

Early quantitative easing in Japan:
https://en.wikipedia.org/wiki/Quantitative_easing#Japan_before_2007

The Russian Revolution and the Russian stock market:
https://snbchf.com/history-2/durden-stocks-russian-revolution/

The German stock market during World War 2:
https://topforeignstocks.com/2018/12/24/germany-cdax-index-performance-from-1930-to-1950/

South Sea Bubble:
https://en.wikipedia.org/wiki/South_Sea_Company#Top_reached

Raoul Pal on 200-year sideways market in U.K.
https://twitter.com/RaoulGMI/status/1254192936914427908

The stock market/indexing bubble:
https://www.youtube.com/watch?v=b6c3NpsrFWg

Matthew Kratter is the author of the Amazon best-seller "A Beginner's Guide to the Stock Market":
https://www.amazon.com/Beginners-Guide-Stock-Market-Everything-ebook/dp/B07S31TBF5

If you like my teaching style and would like to learn more about investing and trading stocks, options, and futures, be sure to check out my online courses here:
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