 Americans believe real estate, gold are the best long-terminvestments. They?e wrong, advisors say |
Source |
American Shipper |
Post Date |
05/14/2025 |
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? More than a third of surveyed Americans viewreal estate as the best long-term investment, according to a new report byGallup, a global analytics and advisory firm.
? Others are more bullish on gold as along-term investment, the report found.
? Here? what advisors have to say.
SomeAmericans believe real estate and gold are the best long-term investments.Advisors think that? misguided.
About37% of surveyed U.S. adults view real estate as the best investment for thelong haul, according to a new report byGallup, a global analytics and advisory firm. That figure is roughly unchanged from36% last year.
Goldwas the second-most-popular choice, with 23% of surveyed respondents. That?five points higher than last year.
Tocompare, just 16% put their faith in stocks or mutual funds as the bestlong-term investment ?a decline of six percentage points from 2024′s report,Gallup found.
Thefirm polled 1,006 adults in early April.
Financialadvisors caution that this preference is likely more about buzz thanfundamentals. Be careful about getting caught up in the hype, said certifiedfinancial planner Lee Baker, the founder, owner and president of ClarisFinancial Advisors in Atlanta.
CarolynMcClanahan, a CFP and founder of Life Planning Partners in Jacksonville,Florida, agreed: ?eople are always chasing what? hot, and that? thestupidest thing you could do.?
Here?what investors need to know about gold and real estate, and how to incorporatethem in your portfolio.
Why gold and real estate are alluring
Bakerunderstands why people like the idea of real estate and gold: Both are tangibleobjects versus stocks.
?oubuy a house, you can see it, feel it, touch it. Your investment in stocksperhaps doesn? feel real,?said Baker, a member of CNBC? FinancialAdvisor Council.
Whilethe preference for gold grew this year, the share of Gallup respondents whothink it? the best long-term investment is still below the record high of 34%in 2011. Back then, gold investors sought refuge amid high unemployment, acrippled housing market and volatile stocks, Gallup noted.
Goldprices have been tring upward this spring. Spot gold prices hit an all-time high ofabove $3,500 per ounce in late April. One year ago, prices were about $2,200 to$2,300 an ounce.
Realestate has also drawn more interest in recent years amid high demand frombuyers and accelerating prices. The median sale price for an existing home inthe U.S. in March was $403,700, according to Bankrate. That is down fromthe record high of $426,900 in June.
Why stocks are the better bet
Whilereal estate and gold are two assets that can appreciate in value over time, thestock market will generally grow at a much higher rate, experts say.
Theannualized total return of S&P 500 stocks is 10.29% over the 30-year perioding in April, per Morningstar Direct data. Over the same time frame, theannualized total return for real estate is 8.78% and for gold, 7.38%.
McClanahanalso points out that unlike gold and real estate, stocks are diversifiedassets, meaning you?e spreading out your cash versus concentrating it into oneinvestment.
?henyou talk about stocks, you?e not talking about one big asset,?she said.?ou?e talking about thousands and thousands of companies that do differentthings.?McClanahan is also a member of the CNBCFA Council.
Whilethe tangibility of gold and real estate may provide a sense of comfort, it alsomakes them illiquid, or difficult to cash out, McClanahan said.
How to include gold, real estate into yourportfolio
Ifyou are among the Americans that want exposure to real estate or gold,there are different ways to do it wisely, experts say.
Forreal estate, financial advisors say investors might look into real estate investment trusts, also known asREITs, or consider investments that bundle real estate stocks, likeexchange-traded funds.
AnREIT is a publicly traded company that invests in different types ofincome-producing residential or commercial real estate, such as apartments oroffice buildings.
Inmany cases, you can buy shares of publicly traded REITs like you would a stock,or shares of a REIT mutual fund or exchange-traded fund. REIT investorstypically make money through divid payments.
Realestate mutual funds and exchange-traded funds will typically invest in multipleREITs and in the real estate market broadly. It? even more diversified thaninvesting in a single REIT.
Eitherway, you?e exposed to real estate without concentrating into a singleproperty, and it will help diversify your portfolio, McClanahan said.
Similarto gold ?instead of stocking up on gold bullions, consider investing in gold through ETFs.
Thatway you avoid having to deal with finding a place to store or hide physicalgold, you wash off the stress of it getting stolen or making sure it? coveredby your home insurance policy, experts say.
?iththe ETF, you actually get the value of the return of gold, but you don?actually own it,?McClanahan said.
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