The valuable lesson learnt from Japan’s stock market recovery

A lot has happened over the past 34 years: the Cold War ended, several wars have taken place in the Middle East, a banking collapse occurred, and a global pandemic left millions stuck inside their homes. But one thing remained constant throughout: the bear market – a price drop of 20 per cent or more from the most recent high – in Japanese equities ground on and on relentlessly.

After hitting an all time high of 39,915 points on 29 December 1989, the Nikkei 225 which covers the country’s major companies slumped and slumped again. Today, it finally recovered all those losses, setting a fresh all time high. There is a lesson in that for investors everywhere. All bear markets end eventually, even Japan’s.

While artificial intelligence may be grabbing all the headlines, Japanese equities have been the real standout asset of the last year.