LOS ANGELES - A new Bankrate survey found that Americans now favor the stock market over real estate for money they won’t need for at least 10 years.
The survey, conducted Jan. 17-19, found that 27% of respondents chose stocks as their top investment, up slightly from 26% in 2022. Meanwhile, real estate fell to 24%, down from 29% in 2022, marking a shift in investment preferences after years of a booming housing market.
By the numbers:
Here’s how survey respondents ranked their top long-term investment choices:
The shift away from real estate comes as mortgage rates remain elevated and home prices continue rising, making real estate a less accessible option for many investors.
What they’re saying:
Despite strong market performance, many Americans still hesitate to invest in stocks. The survey found that among those who did not pick the stock market, the top concerns were:
“Volatility and intimidation are the top reasons cited for those not choosing the stock market,” said McBride. “Fortunately, a solution exists – broad stock market index funds diversify risk over hundreds or even thousands of stocks, reducing the impact of volatility on any one stock or sector.”
The backstory:
Cryptocurrency remains a niche investment, with only 6% of Americans naming it as their top long-term investment choice.
According to the survey, 78% of Americans said they are not comfortable investing in cryptocurrency, a slight increase from 75% in 2022.
The survey found that younger generations are more open to investing in crypto than older ones:
The generational gap highlights how younger investors are more willing to explore digital assets, but overall, cryptocurrency still struggles to gain mainstream trust as a reliable investment.
The survey also found stark differences in investment choices based on income and education levels:
What’s next:
Experts say the survey reflects a growing confidence in the stock market, which delivered more than 20% returns in both 2023 and 2024. However, volatility remains a major concern, and many Americans still prefer real estate, cash, or other alternatives.
“What is surprising is the strong preference for cash among so many long-term investors,” said Greg McBride, CFA, Bankrate’s chief financial analyst. “While cash is entirely appropriate for short-term horizons, it is the worst choice over time horizons of a decade or more as inflation chews up much or all of an investor’s return.”
As investment preferences evolve, the stock market’s lead could continue to grow – especially as mortgage rates and home prices remain high, making real estate less accessible.
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