- Even more people say that real estate is a better long-term investment than gold and stocks.
- Real estate is less dominant than a year ago, while confidence in gold has increased
- Belief that stocks and mutual funds are best is at its lowest level in a decade
WASHINGTON, DC — More and more Americans continue to name real estate than stocks, gold, savings accounts/CDs, or bonds when asked which is the best long-term investment.
The 34% of Americans choosing real estate this year is down sharply from last year’s record 45%, but is comparable to the typical proportion choosing real estate from 2016 to 2020, before prices of real estate prices are skyrocketing during the pandemic. Rising interest rates over the past year have cooled the real estate market, dampening consumer exuberance about real estate as an investment.
At the same time, the perception that gold is best has almost doubled, from 15% in 2022 to 26% today. As a result, gold overtook stocks to take second place.
While U.S. stock indexes have failed to gain traction over the past year, fewer Americans (18%) than in 2022 (24%) view stocks or mutual funds as the best investment. Current preference for stocks is at the low end of the 17% to 27% range of Americans choosing them since 2011.
The percentages of Americans citing savings accounts/CDs and bonds as best are up slightly from recent years, but remain low compared to other investments.
Gallup has measured Americans’ perceptions of which of these five options is the best investment every year since 2011 as part of its Personal Economy and Finance Survey, conducted annually in April. Before that, Gallup offered a version without gold as an option, but changed the question after gold became a popular option with consumers during the 2007-2009 recession and the subprime mortgage crisis that accompanied it .
The last survey was conducted from April 3 to 25.
Cryptocurrency, a major player in investment ratings
Each of the past two years, Gallup asked a random half-sample of respondents another version of the question that included cryptocurrency as well as the usual five options. Last year, 8% of Americans chose cryptocurrency, putting it ahead of bonds. But today, after the collapse of cryptocurrency exchange FTX last fall and the price of Bitcoin continuing to fall by half from its 2021 peak, only 4% of Americans say cryptocurrency is the best.
With cryptocurrency on the list of options for best investment, Americans are slightly less likely to cite stocks/mutual funds and savings accounts/CDs than when cryptocurrency is not in the list. blend. Regardless, real estate is the clear leader, followed by gold and stocks, then savings accounts/CDs and bonds.
The belief that cryptocurrency is the best investment has declined at least slightly among most subgroups of Americans, but it has declined particularly among young and middle-aged adults. The percentage of adults aged 18 to 49 choosing cryptocurrency has dropped eight percentage points from 13% in 2022 to 5% today, while there is no statistical change among 50 and over, now at 4%.
Shareholder confidence in stocks as a better investment is moderate
The percentage of U.S. shareholders citing stocks as the best long-term investment considering the five traditional options has varied over the past decade between 24% (in 2012) and 37% (in 2019). Today, the 25% who share this view are at the low end of that range, following three declines in the past four years. Currently, more shareholders choose real estate (36%) over stocks, while an equal proportion (24%) choose gold.
Historically, few non-shareholders have named stocks as the best investment, although that has changed amid the stock market’s recovery from the 2020 downturn. This year, non-shareholders have returned to their generally skeptical view of stocks, with only 10% believing them to be the best.
Unlike the correlation between owning stocks and believing it is the best investment, Americans’ view that real estate is the best investment is not linked to homeownership. Renters (33%) are statistically as likely as homeowners (36%) to say it’s the best.
Americans’ perceptions of the value of different long-term investments vary from year to year based on short-term changes in the performance of those investments. When real estate or stock prices are high, their popularity as a better investment increases, and the opposite is true when those prices are depressed. Gold tends to be the beneficiary when confidence levels in real estate and stocks are declining. This usually happens during times of economic recession or uncertainty, as happened around the time of the Great Recession, and it still happens today.
Given the consistently low percentages who choose bonds, cash, or CDs, these options appear to be safe havens for money rather than ways to grow wealth.
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