29 December 1989: The Nikkei hits its all-time bubble peak
Japan's Nikkei 225 closed at 38,915.87 on the last trading day of the decade, capping an epic real estate and stock bubble. The grounds of the Imperial Palace were said to be worth more than all of California. The index then fell by about 80 percent over the following two decades and did not reclaim its 1989 peak until 2024, some 34 years later.
The lesson: Even a great economy's stock market can take decades to recover from overpaying.
What it meant for investors
$1,000 in Nikkei 225 at the start of 1990 → $1,316 today, vs $19,429 in the S&P 500.
We start the clock at the start of 1990, the first year in our price data after the event. That is 1.3 times the money, but $18,113 less than a plain index fund made over the same years.
What Nikkei 225 teaches: Even a large developed market can fail to reach its old peak for a generation, which is why buying at bubble valuations is dangerous for patient investors too.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 1990 | $38,000 | $1,316 | $19,429 |
| 1995 | $19,700 | $2,538 | $14,783 |
| 2000 | $19,000 | $2,632 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought Nikkei 225? Every starting year and the full story →
More Nikkei 225 history
- 29 January 2016: The Bank of Japan goes negative
- 11 March 2011: Japan's earthquake and tsunami
- 22 September 1985: The Plaza Accord takes down the dollar
- 17 November 1997: A major Japanese bank collapses
- 24 November 1997: Yamaichi Securities collapses
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
Play Sixty-40