I don't know if it makes sense to compare the US to Japan. Unlike Japan's central bank, the fed has demonstrated it can support asset prices at will. Japan had tried QE in the past and it didn't work. Yet in the US, it worked beautifully (again for asset prices, not for main street). I wouldn't worry too much about stocks recovering. My guess is that is part of the reason the fed is stepping in now so that the US doesn't end up like Japan with a runaway stock market and real-estate prices.passiveTiger wrote: ↑Mon Dec 24, 2018 4:28 pmJapan is still waiting to return to December 1989 stock prices. Japan was so wrecked by overinflated real estate and other assets that it is now going extinct. Literally.
https://www.npr.org/2018/12/21/67910354 ... id-decline
People talk long-term, staying the course, etc., but can you stomach the risk of being 33% down after almost 30 years?
The next time the fed says we should load up on assets, I will strongly consider doing so. For now they are saying assets are overvalued (and have been saying so since mid 2015) and all is well with the economy. This means they won't support asset prices unless they fall below whatever they think is a fair value, provided that doesn't cause some other crisis (hence Mnuchin calling the banks). But once they step in, they will blow another bubble and we will take out the current tops in no time (i.e. no more than a few years).