The S&P 500 keeps hitting record highs, making many investors fear they’ve “missed the right time to buy.”
However, for long-term investors using NISA, the truth is that “it’s still not too late.”
This article clearly explains the S&P 500’s future outlook and potential risks, and shows why starting now may be the smartest move for long-term wealth growth.
What Is the S&P 500?
The S&P 500 is a stock index composed of the 500 largest U.S. publicly traded companies by market capitalization. It represents the overall U.S. economy and includes many of the world’s most influential corporations.
The index is heavily weighted toward tech companies, including Apple, Microsoft, NVIDIA, and Amazon. Therefore, investing in the S&P 500 essentially means diversifying your investment across the world’s most dominant and innovative firms.
| Item | Description |
|---|---|
| Index Name | S&P 500 |
| Number of Constituents | Approximately 500 |
| Main Sectors | IT, Finance, Healthcare, Consumer Goods |
| Example Funds | eMAXIS Slim U.S. Equity (S&P 500), SBI・V・S&P 500 Index Fund |
The S&P 500 has historically shown a consistent upward trend as the U.S. economy grows. It is considered an ideal index for long-term investment strategies.
Has the S&P 500 Risen Too Much?
Over the past decade, the S&P 500 has tripled in value. This growth was driven by the rapid expansion of tech companies, loose monetary policy, and record corporate earnings. However, valuations are currently above historical averages, raising concerns that the market may be overheated.
| Indicator | 2025 (Current) | Historical Average |
|---|---|---|
| PER (Price-to-Earnings Ratio) | About 24x | About 16x |
| PBR (Price-to-Book Ratio) | About 4.3x | About 2.8x |
| Dividend Yield | About 1.4% | About 2.0% |
While many analysts describe the market as expensive, the S&P 500 has historically continued to rise over time despite such warnings. The key takeaway is to focus on long-term growth rather than short-term fluctuations.
Is It Too Late to Buy the S&P 500 with NISA?
The answer is no, it’s not too late. In fact, taking advantage of NISA’s tax-free benefits can significantly enhance long-term returns. NISA is designed for steady, long-term investing, making it perfectly suited to an asset like the S&P 500 that has a proven record of growth and stability.
| Investment Start Year | 10-Year Annual Return | 20-Year Annual Return |
|---|---|---|
| 2000 | +3.1% | +6.5% |
| 2010 | +11.2% | +8.9% |
| 2015 | +10.0% | – |
| Average | Approx. 8% | Approx. 9% |
Data shows that holding the S&P 500 for more than 15 years rarely results in losses. By investing regularly, you can reduce the impact of short-term volatility and benefit from dollar-cost averaging.
| Investment Method | Advantages | Cautions |
|---|---|---|
| Lump-Sum | Potential for quick profits | High risk if timing is poor |
| Regular Investment | Averages purchase cost | May take time to see results |
| Long-Term Holding | Maximizes compound interest | Requires patience during downturns |
Risks and Precautions
Although the S&P 500 offers strong growth potential, investors must be aware of certain key risks, including currency fluctuations and sector concentration.
| Main Risk | Description |
|---|---|
| Currency Risk | Yen appreciation can reduce the value of dollar-denominated assets |
| Interest Rate Risk | Fed rate hikes may depress stock prices |
| Sector Concentration | Heavy dependence on tech sector performance |
| Geopolitical Risk | U.S.-China tensions and election uncertainty |
Example: Exchange Rate Risk
If you invest when the USD/JPY rate is 150 and it later falls to 140, the yen’s appreciation would cause about a 7% loss in value. While such fluctuations tend to balance out over the long term, they can impact short-term performance.
Reducing Sector Concentration Risk
To lower risk, consider diversifying with global or emerging-market index funds alongside the S&P 500. Diversification helps cushion portfolio volatility.
Future Outlook for the S&P 500
Although the market may experience short-term corrections, the long-term trend remains upward. Key drivers of future growth include artificial intelligence, renewable energy, and healthcare innovation.
| Year | Expected Annual Return | Growth Drivers |
|---|---|---|
| 2025 | +5–7% | Stable interest rates, stronger earnings |
| 2030 | +6–8% | Growth in AI, renewable energy, healthcare |
| 2040+ | +7–9% | Population and technological expansion |
The U.S. economy’s competitiveness and innovation capacity remain unmatched globally, sustaining profit growth across multiple sectors. The S&P 500’s rise represents a new phase of economic evolution, not the end of a cycle.
How to Start Investing in the S&P 500
Investing in the S&P 500 through a NISA account is simple and accessible to anyone. Follow these practical steps to begin.
| Step | Description | Key Point |
|---|---|---|
| 1 | Open a securities account | Choose a NISA-eligible account |
| 2 | Select a mutual fund | Focus on funds with low fees |
| 3 | Set up regular contributions | Automate monthly investments |
| 4 | Review periodically | Adjust based on market conditions |
Recommended S&P 500 Funds
| Fund Name | Expense Ratio | Key Features |
|---|---|---|
| eMAXIS Slim U.S. Equity (S&P 500) | 0.093% | Very low-cost, ideal for long-term holding |
| SBI・V・S&P 500 | 0.0938% | Uses Vanguard ETF as underlying asset |
| Rakuten S&P 500 Index Fund | 0.094% | Easy to use, popular among beginners |
The key is consistency—even investing 10,000 yen (about $70) per month can lead to substantial wealth after 20 years due to the power of compounding.
| Investment Period | Monthly Amount | Estimated Return (6% p.a.) | Future Value |
|---|---|---|---|
| 10 years | ¥10,000 | +6% | ¥1.64 million |
| 20 years | ¥10,000 | +6% | ¥4.64 million |
| 30 years | ¥10,000 | +6% | ¥10 million+ |
Conclusion
Even if the S&P 500 appears to be at a high level now, it remains one of the most reliable and growth-oriented investment options in the world. By leveraging the tax-free advantage of NISA, investors can build wealth efficiently over the long term.
The most important factor is not “when to buy” but “how long you stay invested.”
Avoid reacting emotionally to short-term market movements—time and compound growth are your greatest allies.
Stay patient, stay consistent, and your disciplined investing will pave the way to long-term financial stability.
