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Americans favor real estate and gold over stocks despite advisors’ warnings

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  • Real estate and gold are favored by Americans (37% and 23%, respectively) as top long-term investments, while stock market confidence declines.
  • Financial advisors warn against chasing trends, noting stocks historically outperform real estate and gold in long-term returns (10.29% vs. 8.78% and 7.38%).
  • ETFs and REITs offer smarter exposure to gold and real estate, providing diversification and liquidity without the hassles of physical ownership.

[UNITED STATES] A significant share of Americans continue to view real estate and gold as the most reliable long-term investments—an outlook that some financial advisors argue misses the mark.

Roughly 37% of U.S. adults named real estate as the top long-term investment in a recent Gallup survey, a figure nearly unchanged from last year’s 36%. Gold ranked second, with 23% selecting it as their preferred option, up five percentage points from 2024.

Analysts suggest that gold’s rising appeal is likely fueled by ongoing economic volatility, including persistent inflation and geopolitical tensions—factors that traditionally boost demand for "safe haven" assets. Meanwhile, real estate continues to attract attention for its perceived stability, even as high mortgage rates and affordability concerns challenge the housing market.

In contrast, only 16% of those surveyed identified stocks or mutual funds as the best long-term investment—down six percentage points from the previous year, according to Gallup, which surveyed 1,006 adults in early April.

Financial advisors caution that such preferences are often driven more by perception than financial fundamentals. “People get swept up in the hype,” said Lee Baker, a certified financial planner and president of Claris Financial Advisors in Atlanta. “That’s not always the smartest move.”

Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida, echoed the concern. “People are always chasing what’s hot, and that’s the stupidest thing you could do,” she said.

Why Real Estate and Gold Appeal to Investors

The appeal of real estate and gold may stem from their tangible nature, Baker noted. “A house is something you can touch and feel,” he said. “Stocks can seem abstract.”

Although gold gained popularity this year, its current favorability still falls short of the 34% peak seen in 2011, when investors turned to gold amid high unemployment and a fragile housing market, Gallup reported.

Gold often benefits when the U.S. dollar weakens or inflation expectations rise. However, its lack of yield—unlike interest-bearing bonds or dividend-paying stocks—can be a drawback for long-term investors. Still, gold prices have surged recently, climbing past $3,500 per ounce in late April, compared to around $2,200–$2,300 just a year earlier.

Real estate has also seen heightened interest in recent years amid surging demand and price growth. According to Bankrate, the median price for an existing U.S. home in March was $403,700—down from a record $426,900 last June.

But investing in real estate comes with significant ongoing costs—property taxes, maintenance, and transaction fees—that can erode returns. Moreover, real estate markets are highly localized, and performance can vary widely by region.

How These Investments Stack Up Over Time

Despite their popularity, both real estate and gold have historically underperformed the stock market over the long term. Data from Morningstar Direct shows the S&P 500 delivered a 10.29% annualized return over the past 30 years, compared to 8.78% for real estate and 7.38% for gold.

Stocks also offer broader diversification. “When you invest in stocks, you’re not buying one thing—you’re buying a piece of thousands of companies,” McClanahan said.

She added that unlike gold and real estate, which can be difficult to liquidate quickly, stocks and ETFs offer ease of access. “It can take months to sell a property,” she noted. “Selling physical gold involves markups and appraisals. But stocks? You can sell them in seconds.”

Smart Ways to Gain Exposure to Gold and Real Estate

For investors still drawn to real estate or gold, advisors recommend taking a more diversified approach.

Rather than buying property directly, consider real estate investment trusts (REITs) or real estate-focused mutual funds and ETFs. REITs are publicly traded companies that own income-generating properties like apartment complexes or office buildings. Investors typically earn returns through dividends.

Real estate mutual funds and ETFs offer exposure to multiple REITs, spreading out risk while maintaining access to the sector’s potential gains. “You get diversification without locking yourself into a single property,” McClanahan said.

Similarly, instead of holding physical gold, investors can use gold ETFs to track the metal’s performance without the burden of storage or insurance. “With ETFs, you benefit from gold’s returns without actually owning the physical asset,” McClanahan explained.


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