Real estate now places second in America’s heart, assuming America’s heart is chiefly interested in the best way to invest money over the long term.

Stocks are now Americans’ favorite way to invest long term, according to a Bankrate survey of 1,007 American adults from June 29 to July 5. Market research firm SSRS conducted the survey on Bankrate’s behalf via phone interviews.

The annual survey, first reported by Yahoo Finance, asked respondents the best way to invest money that you wouldn’t need for more than 10 years. Nearly 28 percent chose stocks, up from 20 percent who chose stocks in 2019. Just over a quarter, 26 percent, chose real estate, down from 31 percent in 2019.

“Despite stocks falling by more than one-third in just over a month at the outset of the pandemic, more Americans point to the stock market as the best place to invest money long-term,” said Greg McBride, Bankrate’s chief financial analyst, in a statement.

“The swift rebounds this spring and following a 20 percent decline at the end of 2018 have convinced more investors of the market’s long-term merits.”

Stocks previously beat out real estate as Americans’ preferred long-term investment in 2018. According to Bankrate’s report that year, real estate had been at the top for four years before that.

In this year’s survey, cash, savings accounts and CDs came in at a somewhat distant third, 18 percent — the lowest level in eight years of polling, according to McBride.

“While cash is the best place to park money for the short term, it is a very poor long-term investment,” he said. “Whether it is falling interest rates or better returns elsewhere, more Americans are getting that message, with fewer citing cash as the best long-term investment than at any time in the past eight years.”

Some 42 percent of respondents said the pandemic would affect their investment approach, either making them less aggressive (26 percent) or more aggressive (16 percent). But the majority, 57 percent, said the pandemic won’t affect their long-term strategy.

Preference for stocks over real estate differed markedly by age group. Older millennials (ages 31 to 39) showed the second-highest preference for stocks: 33 percent, compared to 19 percent for real estate. Younger millennials (ages 24 to 30) went the other way: 30 percent preferred real estate while 22 percent preferred stocks.

The oldest group, the Silent Generation, preferred the stock market at the highest rate (43 percent) and real estate at the lowest (17 percent), while boomers preferred real estate (31 percent) to stocks (26 percent). Generation X liked both equally well at 26 percent each, though they were also the most likely to prefer cash as a long-term investment (22 percent).

“While the stock market can be a great creator of wealth, it’s important to remember that savvy investors assemble a diversified collection of stocks (such as the S&P 500) and hold their investments through good times and bad. That’s how to approach the market’s long-term return,” the Bankrate report said.

“The market’s volatility, which we witnessed in early 2020, can scare many investors out of the market just when they should be holding tight or maybe even buying more. However, the price of those higher returns is enduring the market’s inevitable volatility.”

Email Andrea V. Brambila.
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