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NEW YORK – June 23, 2021 – According to a Bankrate.com report, real estate and cash investments have been at the top of the list of preferred investing methods for Americans for 10 years or more. Real estate again took first place, with 28% of Americans citing it as their preferred way of investing money not needed for a decade or longer, up from 26% last year. Amid record low interest rates and rising inflation, cash holdings like savings accounts or CDs come in second, jumping to their highest level since 2014, cited by 25% of Americans, up from 18% last year. For more information, click here:
https://www.bankrate.com/investing/survey-favorite-long-term-investment-2021/
For the first time since 2017, the stock market surpassed the real estate and cash market in third place, chosen by just 16%, despite topping the list in 2020, when it was cited by 28% of Americans. In addition, 13% named gold and other precious metals (up from 14% last year), 9% chose a cryptocurrency such as Bitcoin (up from 4% in 2019-2020 and 2% in 2018). and 4% chose bonds (unchanged from last year) as their preferred long-term investment for over ten years.
“Sentiment in the stock market has fluctuated back and forth over the past 5 years,” said Greg McBride, CFA, chief financial analyst at Bankrate.com, “but creating wealth over the long term means maintaining a commitment to conserving and investing consistently through inevitable ups and downs.”
The stock market was more popular with the highest income households (22% earning more than $ 75,000 versus 11% earning less than $ 30,000) and college graduates (23% versus 9% with no more than a high school diploma). A similar division was seen in cash investment (30% on incomes under $ 75,000 versus 14% on income over $ 75,000) and real estate (22% each: households with the lowest income, those with no higher than a high school diploma, versus 36% each: highest income households; college graduates).
While over a third of Americans (35%) report some level of comfort when investing in cryptocurrencies such as Bitcoin, 61% say they do not feel comfortable. Nearly half of millennials (49%; ages 25-40) are comfortable investing in cryptocurrency, compared with 37% of Gen X (ages 41-56) and 22% of baby boomers (ages 57-75).
Finally, inflation does not appear to have much of an impact on how Americans invest money for a decade or more, with 58% indicating that it will not affect how they invest.
Millennials (29%) were most likely to invest more aggressively due to higher inflation, compared to 19% of Gen X and 14% of baby boomers.
“The strong preference for cash is a paradox given record low interest rates and renewed concerns about inflation, and can be especially damaging if inflation exceeds the return on cash investment over an extended period of time,” added McBride. “While the pandemic has highlighted the need to have sufficient short-term savings, the cash investment does not pay off over a long period of time.”
This research was conducted on Bankrate over the phone by SSRS on its Omnibus polling platform. SSRS Omnibus is a nationwide, weekly bilingual telephone survey with two frames. Interviews were conducted from 25 to 30 May 2021 among a sample of 1008 respondents in English (972) and Spanish (36). Telephone interviews were conducted by landline (203) and mobile (805, including 514 without landline). The margin of error for all respondents is +/- 3.71% at the 95% confidence level. All SSRS Omnibus data are weighted to represent the target group.
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