Gundlach Points to Japan for Risks to Decades-Long Stock Rallies

(Bloomberg) -- Japan may hold the key to why decades-long stock rallies are not a sure bet.

Or at least so says Jeffrey Gundlach, the chief investment officer of DoubleLine Capital. The billionaire money manager used the firm’s Total Return Bond Fund webcast to single out the nation’s equities as a cautionary tale for investors who believe that shares have to go up over long periods of time.

Read more: What Gundlach said during DoubleLine Total Return Bond webcast

The benchmark Topix index has slumped about 30 percent over the three decades following the burst of Japan’s bubble economy in the 1990s. That stands in stark contrast with gauges in the U.S. and Europe: the S&P 500 Index has increased tenfold, while the Stoxx Europe 600 has more than quadrupled since 1989.

“People who say that stocks go up over all 30 year time frames have to look at Japan,” Gundlach said.

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