Real Estate Americans’ Favorite Long-Term Investment

When asked the best way to invest money not needed for more than 10 years, more Americans said “real estate” than any other option, albeit not by much., New York, said results of its fifth annual survey of long-term investing preferences showed 28% of U.S. adults preferred real estate, leading for the third consecutive year. This was followed by 23 percent who picked cash investments, 17 percent who favored the stock market, 15 percent who said gold and other precious metals and 4 percent who said bonds.

Mark Hamrick, senior economic analyst with Bankrate, noted stocks remain relatively unpopular despite recent high yields.

“The stock market has never placed higher than third, which is particularly surprising because the S&P 500 is up more than 50% since the question was first asked in July 2013 and 16% since last year’s poll,” Hamrick said. “These figures do not include dividends, which can add substantially to an investor’s return over time, especially when re-invested.”

Although yields on savings accounts have risen, Hamrick said, “the preferences for cash and real estate indicate that too many people are leaving money on the virtual table by failing to be sufficiently exposed to the stock market, where higher long-term returns are found. This is especially the case for younger investors, who are in the best position to weather the inevitable short-term market volatility.”

The survey said Republicans and households with annual incomes of $75,000 or more were the only demographic groups to select stocks as their preferred long-term investments. Baby Boomers and members of the Silent Generation (or Greatest Generation) were more likely to choose stocks than millennials and Gen Xers.

The Financial Security Index dipped slightly from June’s record level of 106.7, but at 105.3, it’s still the third-best reading since the Index debuted in December 2010. Four of the five components improved from 12 months ago (job security, comfort level with debt, net worth and overall financial situation). Americans are feeling slightly worse about their savings relative to last year.

The survey was conducted by Princeton Survey Research Associates International with a nationally representative sample of 1,002 adults living in the continental United States from July 6-9. The margin of sampling error for the complete set of weighted data is plus or minus 3.9 percentage points.