Investors in the Japanese and U.S. stock markets may end up nursing the same hangover in 2014, but for now they probably won’t let a little lull spoil the party.
Now that the Nikkei 225 has cooled a bit, questions are arising over whether the index’s nearly 70 percent surge over the past year has gotten overdone.
The simple answer is that while Japanese equities could be in for a brief pause, the buy-the-dip mentality remains firmly in place.
“When you’re up 60 percent in seven months you’re going to have a bit of a pullback, that’s to be expected,” Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank, said in an interview. “Most U.S. investors are underexposed to Japan. That’s a big, big risk.”
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