Real Estate Not Stocks Give the Greatest Long-Term Investment, Survey Shows

According to a recent Gallup poll, even though the majority of Americans have money stashed away in the stock market, they don't think it makes the greatest long-term investment. What then is it?

In its annual economic and personal finance study, the polling company discovered that 36% of respondents said that real estate was the greatest location to spend their money. Real estate is an ancient cornerstone of the American Dream. Stocks came in second, with 22% of respondents saying they were the greatest option for long-term gains.

The poll provides an insight into the rationale of the average investor, whose beliefs might be influenced more by the recent home price explosion than by the real long-term benefits of real estate investing as opposed to stock investing.

Indeed, real estate can be profitable; the S&P CoreLogic Case-Shiller house index shows that since 2000, the asset class has returned almost 215%. Nevertheless, in the same time frame, the S&P 500 has returned 287%.

Although the median house selling price at the end of 2022 was $479,500, which was a new high for real estate values, home prices are still much higher than they were before the pandemic, according to Gallup. In the meantime, fresh statistics indicated that last month's inflation decreased little, and on Wednesday the S&P 500 reached a record high.

According to a Gallup poll, over 62% of Americans claim to have some kind of stock market investment, which might include individual stocks, mutual funds, or funds held in a retirement savings account. Though it is one of the highest percentages of stock ownership since the organization began tracking the indicator in 1998, there hasn't been much of a difference from the poll conducted last year.

The results of Gallup's study were derived from a telephone poll conducted in April among around 1,000 adult Americans.

Gold Investments

A year ago, 25% of individuals surveyed believed that gold offered the highest long-term returns; this percentage has now dropped to roughly 18%.

Since gold is frequently seen as an inflation hedge, more investors have turned to the precious metal in recent years. In the long run, gold has shown to be worth its weight in gold, as seen by the almost seven-fold increase in the cost of an ounce of the precious metal since 2000.

Nevertheless, there are drawbacks to gold investing, such as the difficulty of withdrawing money when compared to the simplicity of selling stocks and other liquid assets. Unlike stocks, bonds, CDs, and other investments, gold does not offer dividends or interest payments.

It's interesting to note that Gallup found differences in opinions between the two parties about gold: 27% of Republicans and only 7% of Democrats think the metal is a wise long-term investment.

This might also come down to divergent perspectives on the state of the economy, with Republicans being more inclined than Democrats to have pessimistic opinions. For example, you could be more inclined to use gold as a hedge if you think that inflation would spike once again.

Which financial products, in the opinion of Gallup, don't pass muster as long-term investments? Maybe as a holdover from the years of weak returns during which the Federal Reserve maintained interest rates close to zero during the 2008 financial crisis, just 13% of those surveyed indicated they liked savings accounts or certificates of deposit (CDs). Furthermore, just 3% of respondents said they had a taste for cryptocurrencies, which are infamously unstable.

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