
Americans believe that real estate is the best long-term investment, according to a recent survey by Gallup. While many Americans have money invested in the stock market, the majority view real estate as the most lucrative option for long-term returns. In the survey, 36% of respondents chose real estate as the best place to invest their money, while stocks came in second with 22% of the vote.
This preference for real estate may be influenced by the recent surge in housing prices during the pandemic, rather than a consideration of the actual long-term returns of property ownership compared to stocks. However, it is worth noting that real estate has proven to be a profitable investment, with a return of approximately 215% since 2000, as indicated by the S&P CoreLogic Case-Shiller home index. In contrast, the S&P 500 has yielded a return of 287% over the same period.
Although real estate values have decreased slightly from their peak at the end of 2022, when the median home sale price reached $479,500, they still remain significantly higher than pre-pandemic levels. On the other hand, the S&P 500 reached a new record high recently, following the release of data showing a slight easing in inflation.
Gallup suggests that the strong performance of real estate and stocks in recent times likely explains their popularity among investors.
According to a recent survey conducted by Gallup, approximately 62% of Americans have investments in the stock market, which can include individual stocks, mutual funds, or retirement savings. This percentage remains relatively unchanged from the previous year but represents one of the highest rates of stock ownership since Gallup began tracking this measure in 1998.
Gallup arrived at this conclusion by conducting a telephone survey of about 1,000 adults residing throughout the United States in April.
In terms of gold as an investment, the survey found that 18% of respondents considered it to provide the best long-term returns. This figure is a decrease from the 25% recorded the previous year. Gold has become increasingly popular in recent years as an inflation hedge, attracting more investors. Over the long term, the price of gold has soared approximately seven times since 2000.
However, investing in gold does come with its drawbacks. It can be more challenging to liquidate compared to selling stocks and other liquid investments. Moreover, gold does not provide dividends or interest like stocks, bonds, or certificates of deposit (CDs).
Interestingly, Gallup discovered a partisan divide in attitudes towards gold. 27% of Republicans viewed gold as a good long-term investment, while only 7% of Democrats shared this view. This divide may stem from differing opinions about the economy, with Republicans more likely to hold negative views about the current economic situation. If one believes that inflation could rise again, they may be more inclined to turn to gold as a hedge.
According to Gallup’s findings, there are certain financial instruments that are not considered suitable for long-term investments. Only 13% of the participants in the survey expressed a preference for savings accounts or CDs, possibly due to the low returns experienced in the aftermath of the 2008 financial crisis when interest rates remained near zero. Additionally, only 3% of respondents showed an interest in cryptocurrency, which is well-known for its volatility.