Stocks, real estate, crypto: Which is the best investment?

Portfolio diversification is one of the key tenets of investing. Multiple studies have shown over the years that spreading your assets across different investment types and styles enables you to best navigate the markets’ ups and downs. The idea is that if one asset type or investment style is not in favor at a particular time, another type likely will be, thus balancing out your returns.

For example, stocks have been hot recently, but they but may be slowing down. Meanwhile, bonds have been a mixed bag, cryptocurrency has been surging, and gold has been strong, although we remain in a real-estate winter. Thus, a diversified portfolio would serve you well right now.

However, looking ahead, what do Americans see as the best long-term investment? A new poll from Gallup has the answers.

Real estate and stocks rank at the top

This week, Gallup released its annual Economy and Personal Finance survey, which polled Americans from April 1-22 about what they see as the best long-term investment among stocks, bonds, real estate, cryptocurrency, gold and savings accounts.

Despite its problems over the past few years, real estate remained the top choice, selected by 36% of participants as the best long-term investment. The real-estate market has slowed to a crawl for a variety of reasons on both the commercial and residential sides, with two of the biggest reasons being high interest rates and soaring prices. Real estate has only recently shown signs of recovery, but uncertainty is still high.

Perhaps investors are hoping that the market has hit bottom. Nonetheless, that 36% share is down from 38% a year ago and the lowest percentage since 2020.

Stocks came in second with 22% of the vote. Confidence in the stock market has risen since last year, when just 15% of those polled by Gallup favored stocks. Stocks are more favored by upper-income Americans (31%) than those with lower incomes (14%). Middle-income earnings are in the middle at 21%. Stocks are in the midst of a bull market, and while things could go sideways if the economy slows, there is likely hope that lower interest rates will spur more growth.

Gold came in third in the poll, with 18% favoring it as a long-term investment. The gold market has been strong in recent years, as the yellow metal’s price has climbed about 15% year to date and about 20% over the past year as of May 16, although it has flattened out over the past month. Some analysts believe the outlook for gold is that the market should remain robust through 2024 and into 2025. However, the 18% share of Americans seeing gold as the best long-term investment is down from 25% in 2023.

Cryptocurrency and bonds lose ground

Savings accounts, including CDs, came in at 13%. While these accounts don’t offer much upside, they are safe investments that are preferred by lower-income (20%) and middle-income (15%) Americans, compared to just 7% of upper-income earners.

The bond market has been a mixed bag, with money market funds and short-term bonds doing well in this high-interest-rate environment, while longer-term bonds have struggled. Only 4% of Americans in the poll called bonds the best long-term investment, as more conservative investors seem to prefer the relative safety of savings accounts in a higher-interest environment.

Cryptocurrency was only added to the survey two years ago, as it is a relatively new asset class. Only 3% in the survey called it the best long-term investment, which is not surprising given its volatility over the years and the fact that not as many Americans are as familiar with it compared to the other options.

That said, in last year’s survey, 4% of Americans selected cryptocurrency as the best long-term investment, and two years ago, crypto’s share in the poll was at 8%. The decline this year is a little surprising, given the resurgence of nitcoin and other crypto investments over the past year, but perhaps some expect it to fall back after the big run.

This survey is illuminating as a snapshot of what Americans are thinking about investments, but as stated at the outset, the best strategy is a diversified portfolio that features all or several of these asset classes.