Why Most Americans Are Investing in Real Estate, Not Stocks

August 17, 2015

Original story here: http://www.cheatsheet.com/money-career/why-most-americans-are-investing-in-real-estate-not-stocks.html/

Why Most Americans Are Investing in Real Estate, Not Stocks

David McNew/Getty Images

If you’ve been hesitant to dip your toe in the water when it comes to investing in stocks , you’re not alone. A recent Bankrate survey found that just 17% of Americans agreed that stocks are the best way to invest money that won’t be needed for at least 10 years. The two most preferred means of investing were cash (23%) and real estate (27%). Men were more likely to choose real estate as their preferred investment method while women were more likely to turn toward the safety of cash investments such as savings accounts and CDs.

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Additional research findings:

Source: Thinkstock

Among those who favored stock investing , gold and other precious metals ranked fourth on the list, garnering a 14% vote. Bonds came in last , with a vote of 5%.
When survey respondents were asked how they felt about their job security compared to 12 months ago, 22% reported feeling more secure and 14% reported feeling less secure during this time period. These numbers are down from 29% and 9% in June.
Consumers are feeling less confident in their ability to save for a rainy day. Roughly 29% of respondents reported being less comfortable with their savings level compared to 12 months ago, while 18% say they are more comfortable.

Why do Americans prefer real estate?

Bankrate says many Americans remain fearful of the stock market’s short-term volatility, and would rather give up higher long-term returns than take the risk. They mention that although the S&P 500 has risen 27% over the past two years, Americans are just three percentage points more likely to turn to stocks now than they were two years ago.

“Most Americans are still not embracing the stock market for long-term investment horizons . Many still fear short-term volatility more than they desire the higher long-term returns,” said Greg McBride, CFA, Bankrate.com’s chief financial analyst.

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