Japan may hold the key to why decades-long stock rallies are not a sure bet.
Or at least so says Jeffrey Gundlach, chief investment officer at DoubleLine Capital. The billionaire money manager used the firm's Total Return Bond Fund webcast to single out Japan's equities as a cautionary tale for investors who believe that shares have to go up over long periods of time.
The benchmark Topix index has slumped about 30% 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 over that period, 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," Mr. Gundlach said.