Americans See Real Estate As A Better Investment Than Stock Market Or Gold

Since the very beginning of money as a means for wealth accumulation, people became interested in, well, accumulation. The tools allowing doing that are numerous and have been dramatically changing during the course of history if to say least. In this article, we’re trying to look at the cost fluctuations historically based on verified data collected from numerous sources to define, how exactly tools of wealth accumulation range today. Or should be, depending on their profitability – if to exclude all other factors like personal preferences, politics, or popularity in people’s minds.

What is the best investment right now?

We have spent a lot of time preparing the table below.

* The price at the start of monitoring can begin in various years; some span over 100 years back from today, some start only 4-5 decades back to the past.

** We personally do not recommend investing in existing speculative intangible assets. We like things we can touch ;)

This table gives you a more or less informative insight into the cost of each of the most applied options for investing in the US. How you should read it:

• First, you see the name of a type of investment asset, which price fluctuations we’re exploring in the chart
• Then goes its cost in three points: at the very beginning of its trade, in 2011, and in 2021
• Then goes the mathematical comparison of the rise (+) or fall (-) of the asset’s cost through time; this is given in two dimensions: a) how the price has grown or fallen for the entire period of the asset on the market and b) how it changed for the past ten years.

We also provide you the general inflation rates, for the years 1914, 2011, and 2021, just for reference: 1%, 2.96%, and 4.81%. That is, to preserve your money each year, you have to invest in any asset, which gives you profitability more than the rate of inflation.

As you can see with your own eyes, all commodities and assets tend to grow in price over time – all but three: the savings account, which really stopped being a tool for money accumulation today; natural gas; and US Dollar. They have fallen overall, while other assets have grown.

When you look at the picture of the past ten years, it is completely different from general. For your convenience, we have ranged all assets by their profitability for the past 10 years in the last column to give you a clear understanding of which asset is good for investing and which’s not.

We can draw the following conclusions from the table:

• Real estate stocks 2021 are one of the best in adding to the cost. Real estate has added +155.5% (inflation-adjusted) and 181.5% (not minding inflation) for the past decade. In the all-time chart, they demonstrate amazing +1,768.4% growth, which shan’t go unnoticed by you if you’re looking for a reliable market of investments.
• To estimate the real estate vs stocks values, look at the Dow Jones, S&P 500, and Nikkei. They add value in all cuts – for the entire period and for the past 10 years, adding at least +238.2% (and at most +291.9%). Compare it to what we have just written about the real estate cost and see for yourself that they are both profitable.
• What has added the most to the price in both time slices is the palladium, giving the income to its investors of +5,003.6% for all time and +344.3% for the past decade.

Surely, you should have noticed that we’ve included one more super-income asset to the table. That’s Bitcoin. It might feel insane that it has added +238,927% for the past 10 years. But it is the only asset in the chart that has been created in the computer era, not existing before it. We do not recommend you put money into its highly speculative asset since it hasn’t shown its real value yet (if it has any at all) – people have to “stop playing” with it to know for sure. What’s on the market today around the Bitcoin is (if to evaluate it cold-headedly) hysteria a sort of this: “Look at this shiny thing I have! I can do it and you can too! Let’s play with it as a cat plays with a mouse!…” But what they forget to tell everyone is that cat eats or abandons a torn mouse corpse when it will have played enough. So come back to our reviewed article in 7-10 years – we’ll add a new column to the chart to expose how the assets are doing and if Bitcoin exists by that time.

Is gold a good long-term investment?

Now, to define what the better long-term investment is, we should again look at the table. Many people think of gold when they want to invest in something tangible (and shiny ;) ). However, it is not the most popular asset so far.

According to one of the latest investor and potential investor surveys, it became clear that gold is chosen as the primary asset by only 18% of them. The first place is taken by real estate (41%), second – by stocks (26%), third by the gold, fourth by savings accounts (9%), bonds were chosen by 3%, and other or no instruments were chosen by 3%.

We are genuinely surprised by the choice of savings accounts by 9% of investors since such an instrument only brings 0.10% annual profit in 2021 (which doesn’t even cover inflation). These must be very conservative people.

As you can see, gold is not an option if you’re looking for a short-term or mid-long-term investment option: it gave up in the price by -9.3% in the past decade (although, generally, for 100+ years of monitoring, it has added +339%). So you should only seriously consider gold if you’re investing for 30-50-70 years. In that case, yes, it is a conservatively good investment.

Is real estate a good investment right now?

What you really should be focusing on today is real estate. Considering real money (not inflation-adjusted), it has been adding on average 18% annually, having grown by +181% for the past decade. That is – your house of $200,000 bought in 2011 is now worth $362,000. And you do nothing to make it grow!

Moreover – if you’re a landlord, owning a rental property, you also collect rental incomes by letting it, which can be your main or auxiliary job.

No wonder, 41% of investors found it as their major interest in investing. If to think about it, it is one of only a few “good” assets on the market for an average person to deal with:

• It grows over time without any effort on your side
• It is tangible, so, in most cases, it comes with “physical shipment” unlike stocks, futures, options, and other derivatives
• It is available to be bought by everybody (using own money or bank financing)
• It does not require tiresome hands-on operating like stock market assets would, which you can buy and sell within a minute and have to constantly monitor to play on their cost fluctuations in order to secure winnings and evade losses.

Physical precious metals stand close to it. However, they can also be intangible if you own them without physical shipment, which is not so good for just everybody.

The downsides of owning real estate are:

• It does not necessarily appreciate over time if it’s located in a decadent neighborhood
• It has the cost of maintenance as it dilapidates over time
• It requires you to pay annual taxes for its ownership, which can be a ‘dead weight’ if you don’t earn from it
• It is not sold instantly, as its liquidity is not the quickest in either case.

Conclusion

When you choose where to invest your money, you have to start with the research. Although you can rely on the provided table, it is mostly general, to give you an insight into very long-term profitability, which might not be the case for you.

What is understood for sure is that today, the real investment options, which go way farther than saving you from inflation, are copper, real estate, or palladium.