Gold Still Americans' Top Pick Among Long-Term Investments

A recent Gallup poll reveals that gold leads four other types of investments in Americans' perceptions of which type of investment is the best long-term investments. Gold leads with 28% and is followed by real estate with 20%. The poll also showed that gold did better with older, middle income Republicans.

by Lydia Saad
April 27, 2012
Gallup

PRINCETON, NJ -- Gold leads four other types of investments in Americans' perceptions of which is "the best long-term investment," although the 28% choosing it today is down slightly from 34% in August. Traditional savings accounts or CDs have gained in support over this time, rising to tie stocks/mutual funds and real estate as the next-most-valued investments. Bonds rank a distant fifth.

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Gold does particularly well among men, adults 35 years and older, those without a college degree, middle-income Americans, and Republicans. Women, younger adults, lower-income Americans, and Democrats are more likely than others to name savings accounts/CDs as the best investment.

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The new findings are from Gallup's April 9-12 update of its annual Economy and Personal Finance poll. The question was asked of a random half-sample of respondents. The other half-sample was asked a longer-term Gallup trend question that does not include gold in the "best long-term investment" choices. That question finds real estate at the top, with 31% of Americans choosing it, followed closely by stocks/mutual funds (26%) and savings accounts or CDs (24%), and then bonds (14%).

These results are similar to those found a year ago, but reflect a decline in support for savings accounts/CDs since 2009, when these peaked at 34%. Longer term, the perceived value of real estate fell sharply between 2002 and 2007, and subsequently dipped slightly further.

Confidence in stocks/mutual funds increased between 2002 and 2007, but then plummeted in 2008 and 2009 before partly recovering since then.

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Bottom Line

Investing in gold has gained in popularity in recent years as low interest rates have made traditional savings instruments less attractive, and instability in the stock and real estate markets has undermined the mass appeal of those options. Meanwhile, the rising trajectory of the price of gold over the past several years apparently offers more of the returns and stability investors seek. Although gold prices dipped in the last quarter of 2011 after hitting an all-time high of $1,924 per ounce in September, and have yet to fully recover, more Americans continue to consider gold the best long-term investment among the major options available to consumers.

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