Global investors and even Japanese citizens are woefully although understandably under allocated to Japanese stocks. Why? For most of our “investment” lifetimes, the island nation has been a place to avoid, with equities (Nikkei 225) still unable to fully recover from the Japanese bubble that popped 25years ago. From the 1989 top to the 2009 bottom, Japanese stocks lost 83% of their value. Even despite recent gains, a $1 million Japanese equity investment made in 1989 would be worth $500,000 today compared to $6 million if invested in U.S. stocks (S&P 500).
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