What if you bought Nikkei 225 in 1990?
Countries · Japan. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play1.3× · S&P 500 same money: $19,429
$1,000 in Nikkei 225 at the start of 1990 would be worth about $1,316 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
Japan's Nikkei 225 is the textbook warning sign for anyone who thinks stocks always come back quickly. At the end of 1989 it peaked near 39,000, at the height of a bubble in which Tokyo land was said to be worth more than all of California and Japanese firms were buying Rockefeller Center and Hollywood studios. Buying at the start of 1990 meant buying almost exactly the top.
What followed was not a crash so much as a slow deflation lasting two decades. Banks hid bad loans, so-called zombie companies were kept alive, prices and wages stagnated, and the index slipped below 8,000 in the aftermath of 2008. Recovery began with Abenomics in 2012-13, which combined aggressive monetary easing with corporate governance reforms that pushed companies to care about shareholders. A weak yen, buybacks and Warren Buffett's purchases of the big trading houses added momentum, and in early 2024 the Nikkei finally surpassed its 1989 high, some 34 years later.
The lesson: 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.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 1990 | $38,000 | $1,316 | $19,429 | 1.3× |
| 1995 | $19,700 | $2,538 | $14,783 | 2.5× |
| 2000 | $19,000 | $2,632 | $4,626 | 2.6× |
| 2003 | $8,600 | $5,814 | $7,727 | 5.8× |
| 2005 | $11,500 | $4,348 | $5,763 | 4.3× |
| 2007 | $17,000 | $2,941 | $4,789 | 2.9× |
| 2008 | $15,000 | $3,333 | $4,626 | 3.3× |
| 2010 | $10,600 | $4,717 | $6,071 | 4.7× |
| 2012 | $8,500 | $5,882 | $5,312 | 5.9× |
| 2015 | $17,400 | $2,874 | $3,301 | 2.9× |
| 2018 | $23,500 | $2,128 | $2,519 | 2.1× |
| 2020 | $23,600 | $2,119 | $2,092 | 2.1× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2012, turning $1,000 into $5,882. The S&P 500 from that same year: $5,312.
On this day
- 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
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Nikkei 225 is one of 258 positions on the wheel — including the ones that went to zero.
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