Survey: Real Estate And Cash Top Americans’ List Of Preferred Investments Over Next 10 Years

Beth McCandry

According to a new study by Bankrate, real estate is Americans’ preferred investment choice over the long term. Real estate has been the first choice in five of the last seven years and most recently took the crown in Bankrate’s 2019 survey.

The survey shows that 28 percent of Americans prefer real estate to invest money that won’t be needed for 10 years or more. That’s an increase of 26 percent last year when stocks got the top honors.

Americans also had a real preference for cash in this year’s poll. Cash (including savings accounts and CDs) has performed the highest since 2014, with 25 percent of respondents citing it. Surprisingly, the surge in popularity comes as interest rates are at record lows and offer little potential for returns.

Meanwhile, only 16 percent of Americans picked stocks, up from 28 percent last year.

“The strong preference for cash is ironic in the face of record high interest rates and renewed inflation concerns, and could be especially damaging if inflation continues to outpace cash returns,” said Greg McBride, CFA, chief financial analyst, Bankrate. “The pandemic has made it clear the need to have sufficient savings in the short term, but investments do not pay off over long periods of time.”

Bankrate surveyed 1,008 American adults about their investment preferences May 25-30. The following are the main results of the survey.

The central theses:

Real estate is the most popular long-term investment

Real estate tops the poll of America’s preferred investments over the next decade with 28 percent of the vote. The results marked a return to the top spot for real estate, which last held the position in the 2019 Bankrate survey.

In second place was cash or similar investments such as CDs or savings accounts, which received 25 percent of the vote. The stock exchange completed the top 3 with 16 percent.

Stocks have fallen out of favor with respondents since last year when they ranked first for 28 percent of Americans, despite a year of rising stock prices and little downside volatility. This year’s value was the worst value for stocks in the survey since 2016. From 2013 to 2017, despite a raging bull market for stocks, the stock market ranked well behind real estate and cash in third place.

“The mood on the stock market has fluctuated over the past five years, but building wealth over the long term means holding on and investing consistently through the inevitable ups and downs,” says McBride.

Gold and other precious metals were the first choice for 13 percent of Americans, down slightly from 14 percent last year and in the same range since 2013.

Cryptocurrencies like Bitcoin grew in popularity and were selected by 9 percent of respondents, up from 4 percent in 2019 and 2020 and just 2 percent in 2018.

Bonds were the choice of just 4 percent of Americans, in line with last year’s results and among the lowest scores in nine years of the Bankrate poll.

About 4 percent of Americans named an investment other than this, while another 2 percent said they didn’t know or refused to respond.

Americans are still uncomfortable buying cryptocurrencies

While cryptocurrencies like Bitcoin have shown remarkable gains in the survey in recent years, most Americans are still uncomfortable investing in them. Around 61 percent say that they feel “not too comfortable” (28 percent) or “not at all well” (33 percent) when they invest in it.

About 35 percent of Americans say they are comfortable investing in crypto. Around 9 percent feel “very comfortable” when they own it, another 26 percent are “rather comfortable”. Around 4 percent say they have never heard of Bitcoin or cryptocurrencies.

Comfort levels decrease with age, with 51 percent of younger millennials (ages 25-31) investing “some” or “very comfortably” in crypto, compared to just 16 percent of those 67 or older.

Inflation doesn’t affect how Americans invest

Bankrate asked Americans, “How will inflation concerns change the way you invest money you wouldn’t need in 10 years?” The results suggest that inflation doesn’t have a big impact on how Americans spend their money over the long term invest:

  • About 58 percent say inflation won’t change their investment habits.
  • Around 20 percent say they would invest more aggressively.
  • Surprisingly, another 20 percent say they would invest less aggressively.
  • About 2 percent of the respondents did not know or refused to answer.

At 29 percent, millennials were most likely to invest more aggressively due to higher inflation. Generation X and the baby boomers came in at 19 percent and 14 percent, respectively, while only 6 percent of the silent generation said so.

Investment preference varies greatly according to age

So which age groups preferred which investments over the next ten years? The Bankrate results provide information about who liked each type of investment most and least.

  • property was the most preferred long-term investment by younger millennials at 33 percent, while it was least preferred by baby boomers at 27 percent.
  • cash register was most preferred by older millennials (ages 32-40) at 31 percent, compared with 25 percent of Generation X and 21 percent of younger millennials and baby boomers.
  • The Stock market was most preferred by younger millennials and under 30s, with 20 percent guessing it. Meanwhile, Gen X stocks were the least favored, at 11 percent.
  • Preference for Cryptocurrency younger, with 14 percent of younger millennials and those under 30 saying this is the best way to invest. Only 9 percent of older millennials and Generation X mentioned crypto and only 5 percent of baby boomers.

Investment preferences vary widely according to income and education

Americans’ investment preferences over 10 years or more vary widely based on household income and level of education.

  • property Popularity ranged from 22 percent for the lowest-income households and those with high school degrees or less to 36 percent of the highest-income households and college graduates.
  • Investments were cited more than twice as often (30 percent) in households with an income of less than $ 75,000 as in households with an income of $ 75,000 or more (14 percent).
  • The Stock market was preferred by the highest income households ($ 75,000 or more) at 22 percent, or about twice as much as the lowest income households ($ 30,000 or less) at 11 percent.
  • The preference for Cryptocurrency, about 8 to 9 percent, was consistent across households regardless of educational level.

methodology

This study was conducted for Bankrate via telephone interview by SSRS. The interviews were conducted from May 25-30, 2021 with a sample of 1,008 adults. The data are weighted and intended to be representative of all adults in the United States and are therefore subject to statistical errors typically associated with sample-based information.