A significant portion of U.S. adults consider real estate and gold to be superior long-term investments, a view that clashes with the advice of financial professionals.

According to a Gallup report, approximately 37% of American adults surveyed believe real estate is the best investment for the long run. This number remains relatively consistent with the previous year’s 36%.

gold emerged as the second most favored option, capturing 23% of respondents’ preferences, marking a 5% increase from the prior year.

In contrast, only 16% expressed confidence in stocks or mutual funds as the optimal long-term investment, reflecting a 6% decrease compared to gallup’s 2024 findings.

The survey encompassed 1,006 adults and was conducted in early April.

The Allure of Tangible Assets

Financial advisors suggest this inclination is rooted more in current trends than sound financial principles. Certified financial planner Lee Baker, the founder, owner and president of Claris Financial Advisors in Atlanta, advises caution against succumbing to market hype.

Carolyn McClanahan, a CFP and founder of Life Planning Partners in Jacksonville, Florida, concurred, stating: “People are always chasing what’s hot, and that’s the stupidest thing you could do.”

Understanding the nuances of gold and real estate, and how to strategically integrate them into an investment portfolio, is crucial for investors.

“People are always chasing what’s hot, and that’s the stupidest thing you could do.”

Baker acknowledges the appeal of real estate and gold, attributing it to their tangible nature compared to stocks.

“You buy a house, you can see it, feel it, touch it. your investment in stocks perhaps doesn’t feel real,” said Baker.

While gold’s popularity has risen this year, the percentage of Gallup respondents who view it as the best long-term investment remains below the 2011 peak of 34%. During that period, investors sought the perceived safety of gold amidst high unemployment, a struggling housing market, and stock market volatility, according to Gallup.

Gold prices have been on an upward trajectory this spring. Spot gold prices reached an all-time high of over $3,500 per ounce in late April, compared to approximately $2,200 to $2,300 per ounce a year prior.

Real estate has also experienced heightened interest in recent years,driven by strong buyer demand and rising prices. The median sale price for an existing home in the U.S. in March was $403,700, according to Bankrate. This figure is lower than the record high of $426,900 recorded in June.

The Case for Stocks

Although real estate and gold can appreciate over time, financial experts generally agree that the stock market offers greater growth potential.

According to Morningstar Direct data,the annualized total return of S&P 500 stocks was 10.29% over the 30-year period ending in April. In comparison, the annualized total return for real estate was 8.78%, and for gold, 7.38%.

McClanahan also emphasizes that stocks provide diversification,spreading investments across numerous companies rather than concentrating them in a single asset like gold or real estate.