A new Gallup survey shows that both high-income and lower-income Americans have “soured on stocks,” according to CNBC, which also reported that public interest in both stock and mutual fund investing has fallen to its lowest level since 2012, while real estate’s popularity has actually increased dramatically and it has remained a top investment choice since 2016.
“Only 21% of Americans think stocks or mutual funds are the best long-term investment - down six points from 2019”, wrote CNBC. “Real estate continues to rank first, while gold and savings accounts trail stocks”.
This development comes despite the stock market’s rally following its March 23rd low, with more than one third of Americans surveyed naming real estate as their top investment. Although ownership of stocks remains stable, confidence among those who are invested in the stock market has fallen, with only 30 percent of investors choosing stocks and mutual funds as the best investment - a number that has dropped more than seven points over the last year alone!
It’s also important to note that, even though we have experienced 10 years of record economic expansion and unprecedented stock market gains, the total percentage of Americans who own stocks and mutual funds has never again reached its all-time high of 63 percent, which was the average before the Great Recession. In addition, in the survey about 65 percent of high-income Americans said they thought investing $1,000 in the stock market would be a good investment move, compared to only 47 percent of middle and 39 percent of lower-income households.
Over the past 30 years, Gallup has revisited this question several times, to see how Americans feel about investing in the stock market and mutual funds, compared to real estate. Since then, Americans were most negative about investing in the stock market back in 1990, followed by a record (peak) level of positivity in 1999.
Always popular, real estate investing is currently getting a second look among many Americans, who are looking for ways to bolster their economic security as forecasts of the COVID-19 pandemic’s real economic impact continue to worsen.
“Real estate, at 35%, remains the most favored investment to Americans, as has been the case since 2013 when the housing market was on the rebound”, wrote Gallup.
In conclusion, although the appeal of investing in stocks may have waned as the longest-running bull market in U.S. history came to its recent end, the stock market will maintain its rank as the second-most-valued investment among Americans, many of whom are now looking increasingly to real estate investments that can pick up where the stock market left off and provide secure ongoing income, a hedge against inflation and protection from stock market volatility.
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