Real estate and gold vs. stocks: Best long-term investment
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Some Americans believe real estate and gold are the best long-term investments. Advisors think that’s misguided.
About 37% of surveyed U.S. adults view real estate as the best investment for the long haul, according to a new report by Gallup, a global analytics and advisory firm. That figure is roughly unchanged from 36% last year.
Gold was the second-most-popular choice, with 23% of surveyed respondents. That’s five points higher than last year.
To compare, just 16% put their faith in stocks or mutual funds as the best long-term investment — a decline of six percentage points from 2024’s report, Gallup found.
The firm polled 1,006 adults in early April.
Financial advisors caution that this preference is likely more about buzz than fundamentals. Be careful about getting caught up in the hype, said certified financial planner Lee Baker, the founder, owner and president of Claris Financial Advisors in Atlanta.
Carolyn McClanahan, a CFP and founder of Life Planning Partners in Jacksonville, Florida, agreed: “People are always chasing what’s hot, and that’s the stupidest thing you could do.”
Here’s what investors need to know about gold and real estate, and how to incorporate them in your portfolio.
Why gold and real estate are alluring
Baker understands why people like the idea of real estate and gold: Both are tangible objects versus stocks.
“You buy a house, you can see it, feel it, touch it. Your investment in stocks perhaps doesn’t feel real,” said Baker, a member of CNBC’s Financial Advisor Council.
While the preference for gold grew this year, the share of Gallup respondents who think it’s the best long-term investment is still below the record high of 34% in 2011. Back then, gold investors sought refuge amid high unemployment, a crippled housing market and volatile stocks, Gallup noted.
Gold prices have been trending upward this spring. Spot gold prices hit an all-time high of above $3,500 per ounce in late April. One year ago, prices were about $2,200 to $2,300 an ounce.
Real estate has also drawn more interest in recent years amid high demand from buyers and accelerating prices. The median sale price for an existing home in the U.S. in March was $403,700, according to Bankrate. That is down from the record high of $426,900 in June.
Why stocks are the better bet
While real estate and gold are two assets that can appreciate in value over time, the stock market will generally grow at a much higher rate, experts say.
The annualized total return of S&P 500 stocks is 10.29% over the 30-year period ending in April, per Morningstar Direct data. Over the same time frame, the annualized total return for real estate is 8.78% and for gold, 7.38%.
McClanahan also points out that unlike gold and real estate, stocks are diversified assets, meaning you’re spreading out your cash versus concentrating it into one investment.
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