Looking back decades later, what would be the most likely reason to regret today's decision to invest in the Japanese stock market?

Okay, let's talk about this. If I were my future self decades from now, looking back on today's decision to invest in the Japanese stock market, what would most likely make me slap my thigh in regret?

In my view, the biggest regret might not be "losing money," but rather "missing out."

Looking Back Decades from Now: The Biggest Regret About Investing in Japanese Stocks Might Not Be Losing Money, But...

Imagine it's 2050. You brew a pot of tea and open your old investment records. You see that investment in Japanese stocks you made in 2024 and find it didn't lose money; it even gained a little, say 2%-3% annually.

Sounds okay, right? Didn't lose money.

But then, you click open the records for another market – say, the US, India, or some emerging market you didn't pay much attention to back then. You discover that market's index has multiplied 10 or 20 times over the past few decades.

At that moment, your heart sinks. That is the most regretful feeling. This regret, we call it "opportunity cost."

Simply put, for the sake of that 2%-3% annual "stability," you missed out on a golden era where another asset multiplied dozens of times. It's like going to a class reunion and discovering that classmate you overlooked back then became a huge success, while the "blue-chip stock" you chose turned out to be just average. That feeling is worse than outright losing money.

So, what would be the fundamental reasons for this kind of "missed opportunity"? I believe the main points are these:

1. "Japan Went Backwards": Structural Problems Unresolved, Just a Brief "Last Gasp Before the End"

We're optimistic about Japan today because we see some positive changes: emerging from deflation, corporate governance reforms, the stock market hitting new highs, etc. But looking back decades from now, these changes might prove to be merely "treating the symptoms, not the root cause."

The "Tight Curse" of an Aging Population: This is the most fundamental problem hanging over Japan. Where does the vitality for consumption and the drive for innovation come from in a society with fewer and fewer young people and more and more elderly? If there's no disruptive solution to this problem (like large-scale AI/robot labor replacement or a complete opening of immigration policy), the economy's long-term ceiling is fixed, making explosive growth very difficult. Decades later, we might find Japan's economy is like someone who works out hard but never changes their diet – struggling a lot but ending up essentially the same.
Reforms as a "Passing Fad": Under pressure from the government and exchanges, Japanese companies are now starting to focus on shareholder returns, buying back stock and increasing dividends. But how long will this kind of "passive" change last? Once the pressure eases, could they revert to the old seniority-based, insular corporate culture? If innovation and a spirit of risk-taking don't truly become ingrained in the corporate DNA, Japanese companies might still fail to produce world-changing giants like Google or Tesla, and thus fail to deliver outsized returns to investors.

2. "The Party's Over": The Short-Term Drivers of This Rally Fade Away

This current rally in Japanese stocks has had several strong "boosters." But these boosters have limited fuel.

The Yen Depreciation Dividend Runs Out: The sharp depreciation of the yen made the overseas earnings of export giants like Toyota and Sony look fantastic when converted back to yen. But this is like giving performance a "stimulant shot." Decades from now, exchange rates will inevitably fluctuate, possibly even entering an appreciation cycle. When this dividend disappears, the companies' true growth capabilities are exposed. If genuine growth is lacking, stock prices naturally won't rise.
The "Smart Money" Flees: The influx of capital from Warren Buffett and global investors brought huge amounts of incremental funds and confidence to the Japanese market. But capital chases profits. It can come today and leave tomorrow. If, over the decades, more attractive investment opportunities emerge elsewhere in the world (like a booming India or a technologically breakthrough US), this "smart money" will withdraw without hesitation to chase higher returns. At that point, the Japanese stock market could easily return to being neglected.

To Summarize

So, looking back decades from now, the biggest regret about investing in Japan today likely won't stem from a dramatic crash, but from a slow-boiling mediocrity, like a frog slowly boiling in water.

Your money didn't exactly vanish, but your wealth was left far behind by the times. You were stuck holding assets in a slow-growth economy, watching other places transform rapidly. That feeling is the most painful sting.

This isn't to say investing in Japan today is necessarily wrong. It reminds us that when making any long-term investment decision, we must ask ourselves one core question:

"Is the place I'm investing in going to be the most dynamic and wealth-generating place in the world over the next few decades?"

If the answer isn't a resounding "yes," then the old adage, "Don't put all your eggs in one basket," might be the best way to avoid this kind of regret.