Japan’s Long Wait for a New Peak
Japan’s stock market has finally crossed the peak it touched back in 1990. It took an incredible 35 years for this to happen. If we look at the journey from 1950 to 2025, that’s a 75-year period. During this time, Japan’s overall growth rate, or CAGR, has been around 8.8% (see the image below).
On the surface, this looks like a strong number, especially for an economy where interest rates have been close to zero for decades. But behind this number lies a story that shows how unpredictable and uneven market journeys can be.
The Two Phases of Japan’s Market Growth
Japan’s market story can be divided into two very different phases. The first phase, from 1950 to 1990, was a period of rapid growth (see the image below).
During these forty years, Japan’s market grew at an impressive rate of about 16.7% CAGR. But after 1990, things changed. In the next thirty-five years, the growth slowed drastically to just 0.9% CAGR. This means that for more than three decades, Japanese investors saw almost no returns from their markets.
The Lost Generations of Investors
Imagine someone who entered the job market in 1990 at the age of 22 or 23. That person would have seen markets falling or staying flat for the next 20 years. For an entire generation, equity investments felt useless. Many people in Japan lost faith in the stock market. The equity culture almost disappeared from the country. Only in the last decade or so have Japanese markets started to show signs of recovery, slowly rebuilding confidence among investors.
A Contrast with India’s Market Story
Now, if we compare this with India, the difference is clear. In India, markets have a habit of moving up every few years. Every five to ten years, new highs are made, and investors usually see growth in their portfolios. This regular rise in market value keeps investor confidence strong and encourages people to stay invested for the long term. It also reflects the overall growth energy of the Indian economy, which continues to expand steadily.
A Lesson for the Future
Japan’s example is a reminder that no market grows forever at the same speed. There can be long periods of stagnation even after years of strong growth. For Indian investors, this is a thought worth reflecting on. Could India one day face a similar slowdown after years of rapid growth? It’s a possibility we cannot ignore. While the present looks bright, staying cautious and realistic is equally important when thinking about the future of our markets.
Conclusion
Japan’s 35-year wait is a lesson in patience, perspective, and humility for investors worldwide. It reminds us that markets may not always move the way we expect, but those who stay disciplined and keep faith in the long term are the ones who ultimately benefit.
