Every year since 2011 the Gallup Poll canvasses Americans about their personal finances. The most recent survey was completed in April. The findings reveal how we collectively feel about the various types of investments we have access to, as well as some interesting demographic differences.

What do we think is the best investment? Real estate, ranked number one by 36% of respondents. Stocks and mutual funds came in second at 22% followed by gold (18%) and certificates of deposit (CDs)/savings accounts at 13%. Only 4% of survey participants ranked bonds as the top investment, possibly influenced by the awful fixed income losses we experienced in 2022. And despite all the hype about cryptocurrencies and the recent introduction of bitcoin ETFs, that particular asset class garnered only 3% of the votes for best investment.

Historically real estate has been the number one choice since 2014. But the other asset class preferences vary depending on household wealth and even political outlook. In particular, lower income households making less than $40K annually prefer gold over stocks, while the reverse is true for upper income families (those making over $100K). That’s not surprising since only 25% of the former cohort own stocks. Even more interesting, 28% of Republicans viewed gold as the overall best investment as compared to only 7% of Democrats. And that disparity has not only held since 2013 but has widened since 2020.

Some additional good news from my perspective is that equity ownership (particularly through mutual funds and ETFs) has climbed back to 62% this year after having declined to as low as 52% back in 2016. From a performance standpoint both real estate and equities have done well over the past four years, especially in the Bay Area. However over the longer term stocks have outperformed. According to Experian, the S&P 500 generated an average annual 8% return over the past thirty years as compared to real estate’s 5.4% return. So while investing in real estate has been beneficial, investing in equities – notwithstanding the differences in taxation and leverage between the two asset classes which could impact any individual’s net return – could be even better.

The best news for all of us is that we have a wide array of different types of investments available to us today, making it much easier to achieve appropriate risk/return diversification than it has been in times past. This may not be the golden age of investing, but it’s certainly a great time to be an investor.

Here’s a link to the survey: https://news.gallup.com/poll/645107/stocks-gold-down-americans-best-investment-ratings.aspx.