Best Long Term Investment?

Apr 28, 2014 by

What's the allure?

What’s the allure?

Gallup’s been conducting an annual survey of American adults including this question:

Which of the following do you think is the best long-term investment?

  1. Real Estate
  2. Stocks/Mutual Funds
  3. Gold
  4. Savings Accounts/CDs
  5. Bonds
  6. Other/No Opinion

Here are the results for the past four surveys (results from the latest were just released) plus post-meltdown April 2009:

Best Long Term Investment

A few of  my own, always pithy, observations:

  • First, what is the deal with gold? The survey didn’t include gold as an option in 2009, but in 2011 gold was the preferred long term investment choice, by a wide margin, with nearly 35% of the respondents choosing the yellow metal as the best long term investment. On the coat tails of the financial meltdown, I have to believe even more would have picked gold in April 2009. Folks, gold is a chemical element, number 79 in the periodic table, symbol Au. It generates no income, can’t grow, and has no entertainment value. What do you think explains Americans’ love of gold? (Consider this an invitation to submit a guest post!)
  • In a great example of humans’ tendency to shoot themselves in the feet when it comes to investment decisions, equities were preferred by only 15% in April 2009. But as stocks have steadily gained value, so have they regained favor with Americans. Many more believe stocks a better long-term investment today, with the S&P 500 at 1,865 than thought the same in April 2009 when the S&P Index was around 850. Evidently the S&P 500’s 120% gain over the past five years has restored some investors’ faith in Wall Street.
  • Despite the considerable rebound in housing prices, 30% of 2014’s respondents chose real estate—the top choice—as the best long term investment.

What’s YOUR Choice for the Best Long Term Investment?

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  • Travis Pizel

    The only problem with real estate is that you have to maintain it…..stocks you can (hopefully) watch grow, but not have to go fix a furnace, or a leaky roof. 🙂

    • Very true, real estate can take a toll. Professional property management is an option, but it’s not cheap.

  • MoneySmartGuides

    It looks like whatever it “hot” at the moment is what most feel is the best long-term investment. I chose stocks because they are the only investment that earns a decent rate of return over the long haul. Historically, real estate and gold return just a tad more than inflation. Many are delusional about real estate because of what happened over the past 20 years.

  • Stocks can really suck over the short term, which is why many people did not vote for equities, but over the long term, which was stated in the poll, they pretty much can’t be beat.

    • I predict stocks will be beat over the long term going forward. Of course I won’t live long enough to gloat. 🙂

  • It looks like I’m with the majority on stocks. I would add that I am mostly talking about index funds. I have everything from individual stocks to mutual funds, but for long-term, index funds all the way. I love real estate, but all things considered, index funds are much better in so many ways.

  • To be honest, I’m not sure what to pick, but I guess for the long term stock is the way to go… At least if you keep buying stocks and your company pays dividends you can at least ‘enjoy’ that money.
    I think with gold… 2009 was the year when real estate prices went down as well as equities, so most people didn’t think it would be profitable invest in them and chose gold instead. Over time though, they find out gold isn’t that profitable actually… I think.

  • I think gold is popular because its easy to obtain and understand. I think the moral of this story is a diverse portfolio is key. If you invested everything in gold, you have experienced some unhappy days.

    • I agree Leonard, diversity is key. I think if you’d invested everything in any of the choices given in the survey you’d have experienced some unhappy days, right?

  • squirrelers

    Whatever is popular at the time, people seem to find to be a good investment. Popular as in doing well. When gold was reaching really high levels of price per ounce, it seems like it was viewed favorably….then not as much later. Equities were scary for people post-2008, but as values have gone up, it appears that they’re back in favor.

    Maybe we should take the opposite view in terms of short-term prospects when it comes to trends?

  • I personally love stocks because there is no maintenance with them. And when you own dividend stocks they just drip money into your account without any expense. Real estate always has a cost involved in maintaining but at least you have a roof over your head. Gold is great, I personally like it, but do not like the fact that it does not throw off any income. Just sits there and you can’t live in a gold bar.

    • Some take the stock investing approach with real estate. They’re called “slumlords.” 🙂

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