Attitudes toward investments are very strongly correlated to how they are performing at the time. Gold was preferred in 2011 and real estate in 2002. So what do investors like best today?
With home prices largely improved, Americans are more likely to name real estate the best long-term investment option, placing it ahead of gold and stocks, according to a new Gallup poll.
Attitudes toward investments are very strongly correlated to how they are performing at the time. In 2011, when gold was at its highest market price, 34% had named the commodity the best long-term investment. Now, just 24% named gold, while 30% said real estate is the best option.
Meanwhile, when real estate and the stock market tanked back in 2008, savings accounts were the most popular long-term investment, according to respondents at the time. Back in 2002, during the real estate boom, half of Americans told Gallup that real estate was the best investment choice.
“With housing prices improving across the country, Americans are regaining faith that real estate is the best choice for long-term investments,” according to Gallup. “But home ownership is also associated with views of real estate as an attractive investment opportunity. This leaves groups with lower home ownership rates, like lower-income and younger Americans, still looking elsewhere for investment options.”
Upper-income Americans—those earning $75,000 and more—are much more likely than other income groups to consider real estate a good long-term investment. Just 28% of those making less than $30,000, and 26% of those making between $30,000 and $74,999 consider real estate the best option. In comparison, 38% of Americans making at least $75,000 named real estate.
These attitudes make sense when you consider homeownership in America. Of those considered upper-income, 87% own their home, compared to 66% of middle-income and
Lower-income Americans are the least likely to consider stocks/mutual funds the best investment (13%), while, once again, their upper-income counterparts are much more positive about stocks (30%). Just 16% of lower-income Americans own stocks, while 57% of middle-income and 82% of upper-income Americans own stocks.
Similar to other recent studies, Gallup found that younger adults are much more fiscally conservative than their older counterparts. Americans between the ages of 18 and 29 are far more likely to say savings accounts/CDs are the best investment than those 30 years and older.
“Younger Americans could favor savings accounts because they've largely become financially independent adults during a time of volatile housing and stock markets,” according to the Gallup report.
Millennials are almost evenly split between real estate, gold, stocks/mutual funds, and savings accounts/CDs, while older Americans place more weight in real estate and far less in savings accounts/CDs.
“What Americans view as the best choice for investing reflects myriad factors and is influenced by how the investment is currently performing and respondents' biases toward where they are invested,” Gallup concluded.