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These investing options aren’t exactly created equally, either. Some are considered safer, others higher-earning yet volatile.
Which one is the overall best kind of investment, though?
What the research says
Analytics company Gallup published a poll on Thursday about what investment sectors Americans consider the best long-term options for their money. Across the 1,013 American survey respondents, real estate tops the list, but some interesting trends abound.
- 34% said that real estate was the best long-term investment in 2023. While it tops the list, real estate has seen a decline of 11 percentage points since last year’s survey.
- The percentage of people who think that stocks and mutual funds are the best investment also declined. Where 24% of Americans last year said that these sectors provided the best long-term investments, only 18% feel this way in 2023.
- Stock’s decline of six points over last year has put it underneath gold, which 26% of respondents feel is the best investment right now.
- Similarly, bonds, savings accounts and certificates of deposit (CDs) have risen in popularity since last year.
What it means
While real estate and stocks hold a cumulative 52% of Americans’ confidence as the best long-term investment choices, this year’s results suggest a decline in confidence in these sectors.
Given the economic environment right now, which sees mortgage rates trending around 6.5% and a dearth of inventory in the housing market, it might be surprising to see real estate rank highest on the list. However, real estate has continuously topped the list since 2013. While 2021 and 2022 saw the popularity of real estate investing boom as a result of a heating housing market, this year’s 34% figure puts it back on its pre-pandemic average trend of between 30 and 35%.
Americans' confidence in stocks have taken a hit as well, dipping below gold as investors' second most favorable option as a long-term investment for the first time since 2015. This is not terribly surprising, given that since the last time the poll was conducted in 2022, the stock market has seen its fair share of volatility
, making it a less appealing option than before.
Indeed, real estate and stocks, perhaps the most volatile investment classes of the bunch in the main survey, are the only two in decline since last year’s poll. (The poll did include a half-sampling of cryptocurrency questions, and only saw 4% of respondents deeming it the best long-term buy.) Overall, Americans appear to be gravitating heavily toward less-volatile, slower-growing sectors.
Gallup notes that gold had emerged in the survey as one of the most popular long-term investments between 2007 and 2009, around the Great Recession. It makes sense to see it, alongside bonds and CDs, re-emerging as favorites now, given recession fears and high inflation. Savings accounts, too, have gained traction as a top investment, especially as the Federal Reserve's rate hikes have allowed banks to offer some savory APYs.