Time to Invest in Japan?


Jim Jubak Image Jim Jubak Founder and Editor, JubakPicks.com

After a long bear market and last year’s devastating earthquake, Japan’s economy and market are rising fast. Here are some names to know if you want to buy in, writes MoneyShow’s Jim Jubak, also of Jubak’s Picks.

Does your stock portfolio have enough exposure to Japan?

When’s the last time you heard that question? Your answer is probably measured in decades.

The Japanese stock market, as measured by the Nikkei-225, hit an all-time high—intraday—of 38,957.44 on December 29, 1989. The subsequent low after the bursting of the Japanese asset bubble came on March 10, 2009, at 7,054.98.

The percentage drop is stunning—82%—but it’s the duration that is mind-boggling. This bear market went on and on for more than 20 years.

But something unusual—very unusual—happened to Japanese stocks with the end of 2011.

In the aftermath of the March earthquake and tsunami, the Nikkei retreated to 8,605, its lowest level since 2009. Worries about the effects of the destruction on the Japanese economy and the fallout from the Euro debt crisis pressured the index still lower, to a bottom on November 25, 2011 at 8,160.

And then the index began moving up. On March 27, the Nikkei-225 broke 10,000 yen, climbing to 10,255.15. That’s still 74% below the 1989 high. But it’s the direction that counts.

You’re certainly entitled to ask how long the trend will point up.