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The story
The thread kicks off with a NISA (Japan’s tax-free investing program) investor who puts ¥70,000 a month into a NASDAQ100 index fund but feels tempted, wondering if switching to individual stocks would grow their money faster. Some posters insist mutual fund management fees are negligibly small, while others counter that small amounts add up over time. Things heat up further when someone claims “every individual investor who made it to the ¥10 billion tier got there through individual stocks,” which draws immediate pushback that this is just survivorship bias. Specific picks like bank stocks and high-dividend names such as Toyota and Honda get floated too, and NISA posters end up split over whether sticking with index funds or taking a swing at individual stocks pays off better.
What people said
If a fee that tiny — the size of a rice grain — feels like a burden to you, you shouldn't be investing in the first place
Every little bit adds up though (lit. "dust piles into a mountain")
Anyone who won't even bother saving on fees has no business investing
If you want to build enough wealth to FIRE, you've gotta take the individual-stock challenge!
FIRE is a pipe dream unless you can pick out a future 10x stock from a sea of countless options and have the nerves to ride out a crash without flinching
Leveraged Nasdaq funds or crypto still have better odds than that
All-Country, S&P500, and Nasdaq funds have pretty different risk profiles though…
It's too late once they've already rallied
Comparing sectors, this year's top gainers year-to-date are:
#1 bank stocks, #2 AI semiconductor stocks
Banks pay bigger dividends than AI semis too, so on total return they're in a class of their own
They're also more stable long-term, which makes them easier to just hold onto
Even on ¥1 million, the fee works out to less than ¥1 a day
If that feels like a burden, don't invest at all
Paying that fee still beats the risk you'd take on with individual stocks
Though anyone who got in back in 2000 was underwater for a brutal 14 years
There's no way the average person could keep holding through a slump like that
I'd cash out at some point and switch to something else
Winners and losers drag each other down, making it a sluggish pile of junk that barely earns you anything
Every individual investor who's ever hit the ¥10 billion tier got there through individual stocks
Nobody's ever done it with mutual funds — which alone tells you they're not worth bothering with
Survivorship bias
Even institutional investors can't beat the index long-term, let alone individual ones — and the people who actually FIRE are the ones throwing around billions on short positions and leverage
For someone playing investor with about ¥1 million, FIREing off individual stocks only happens to the rare few who got into something like NVIDIA before anyone else noticed it
¥1,000,000 × 0.2% ÷ 365 days ≈ ¥5.5/day
For ¥10 million, that's about ¥20,000 a year
With individual stocks you also owe tax on realized gains, you know
We're talking about individual stocks inside a NISA account here
Honda's still sitting at 4% even now
What mutual fund fees cost you isn't just that flat amount lost
That money would've kept compounding if it had stayed invested instead
Over a long enough horizon, it adds up to a serious loss
That said, once fees get down to something like 0.05%, the way All-Country funds have, I honestly stop caring
Compared to the time it'd take to build your own diversified portfolio of individual stocks, that's basically nothing
Anyone comparing it to rock-paper-scissors clearly has zero real experience
Timing when to cash out is the hard part
Now it's up to ¥2.6 million
But doing it inside a NISA account seems dumb to me
Depends how you look at it
If the gains are tax-free anyway, swinging for high risk, high reward isn't necessarily the wrong call
The second you can't freely switch between holdings, individual stocks — which require actively buying and selling — just aren't suited for a NISA account
That's actually the advanced NISA play
The whole point of NISA is the tax exemption
Making a low-return mutual fund tax-free only saves you a small amount in tax
But with high returns, the tax savings scale up too — that's how you really get the most out of NISA
This year's contribution room still has space, and the proceeds from selling would fit within it
You mean it's close to maturity? Or is this an old-system NISA account?
Old general NISA
That's the real correct answer
The people who did that and bought NIKE stock are in rough shape right now though
So did you actually manage to buy up stocks during the Ueda Shock and the tariff shock?
Background and Key Points of This Discussion
NISA (Nippon Individual Savings Account) is a new tax-exempt investment program launched in 2024 that exempts gains and dividends earned within an annual limit of up to ¥3.6 million and a lifetime limit of ¥18 million. That means arguing over taxes on gains realized inside the account misses the point — and some posters in the thread did call that out. Meanwhile, the claim that “every individual investor who reached the ¥10 billion tier got there through individual stocks,” offered as proof that “individual stocks are more profitable,” is a textbook case of survivorship bias: only the winners are visible, while the far larger number of people who tried the same approach and failed never show up in anyone’s tally. It’s also easy to overlook that mutual fund management fees, even at a modest annual rate of 0.05–0.2%, can compound into a meaningful difference over a long holding period, while individual stocks carry their own transaction-timing costs and different tax treatment. Whether to put NISA’s tax-free allowance toward higher-risk individual stocks or a stability-focused index fund ultimately comes down to each investor’s personal risk tolerance rather than anything inherent to the program itself — and that’s exactly where the thread’s disagreement came from.
*This article is excerpted and summarized from the 5ch “Nandemo Jikkyo G” (general live-chat board) thread “[Sad News] I’m a NISA Investor and I’m Tempted to Try Individual Stocks.”
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