Maybe that seems to be the gist of a recent survey from Gallup, in which Americans picked real estate as the cream of the the long-term-investment crop. Their other choices were gold, stock and mutual funds; savings accounts and CDs; or bonds. Some 30% of those polled picked real estate, versus 24% each for gold and stocks, while 14% gave savings accounts/CDs the nod and just 6% said bonds were the way to go. The bond drag is not too surprising considering how investors have been fleeing funds like the Pimco Total Return Fund PTTRX .
Bonds have also been a consistent nonfavored option in the Gallup poll. This marked the first year gold was included as an option in the Gallup survey of 1,026 adults aged 18 and older. Real estate also earned top billing among investors in the same survey a year ago, with stocks trailing slightly. As the market wades through what many hope is a sixth bull year, some have grown nervous about how long the run can go. Indeed, Gallup said recent volatility in the stock market may have tarnished stocks’ image as the best long-term investment option, according to the survey, conducted April 3-6 and published April 17. Gallup said rising house prices are just one reason Americans are putting their bucks back into houses. In 2002, during the real-estate boom that came ahead of the mortgage crisis — and before gold was offered as an option in the poll — half of respondents gave real estate the best-investment nod. Sales trends for new homes are at low levels, while prices have run up more than 13% over the past year. But do investors really know what they’re talking about? Mitchell Tuchman, writing for MarketWatch, was recently beating the drum of that good old balanced portfolio cause.
He used these numbers, which show 20-year annualized returns of a variety of asset classes through 2012, to back his case: REITs: 11.2% Gold: 8.4% S&P 500: 8.2% Bonds: 6.3% Homes: 2.7%
Tuchman maintained that investors need a well-built portfolio that contains real estate and gold, but in small amounts, and should hold U.S. stocks and bonds balanced against a saver’s time horizon, plus a dollop of fixed income to dampen the occasional reversal. On the downside, they can’t invest for themselves without fumbling, nor is Wall Street doing a very good job. Meanwhile, back to the survey, which also shows that, lower down the food chain, an average American’s idea of the best investment option changes. That real-estate-as-top-pick view largely applies to upper-income Americans, living in households with incomes of $75,000 and over. Gallup found that 31% of those in the lower-income bracket — living on less than $30,000 — believe gold is the best investment option, followed by real estate, at 28%, and stocks, at 13%. Gold GCM4 +0.27% turned into a pretty lousy investment for many last year, though it is picking up a bit this year. In between, those on incomes of $30,000 to $74,999 give gold, stocks and real estate equal billing at 26%. And unlike those in the upper-income bracket, those in this group affordsavings accounts/CDs a bigger chunk of their vote — 16% and 17%, respectively, versus 7% for the $75K-and-up crowd. Young Americans — those between 18 and 29 years old — give real estate, gold and stocks nearly equal favor, at 25%, 21% and 24%, respectively. But 23% also say savings accounts/CDs are the best investment choice.