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U.S. investors see stock funds as best long-term investment

Investor
America   Retired and non-retired investors have broadly similar perceptions

Stock funds dominate investors' perceptions of the best long-term investment they can have, according to the latest Wells Fargo/Gallup Investor and Retirement Optimism survey.


Fifty-four percent of investors choose stock funds - defined as index funds, mutual funds and ETFs - as the best investment option for the long haul.

Real estate investments aside from a primary home receive the next-most mentions, at 19%, followed by individual stocks (11%), gold (6%) and savings accounts or CDs (6%). Bonds rank last at 4%.

Retired and non-retired investors have broadly similar perceptions of what makes the best long-term investment, defined in the survey as a time horizon of 10 years or more. Stock funds top both groups' lists, while savings accounts, gold and bonds rank at the bottom.

However, the groups have different views about the growth potential of individual stocks and real estate.

By 17% to 8%, retirees are more likely than nonretirees to name individual stocks as the best long-term investment.

By 22% to 13%, nonretirees put more emphasis than retirees on real estate investments.

Investors with more than $100,000 in their investment portfolio are more likely than those with less than $100,000 to believe stock funds are the best investment, by 58% to 46%.

Those in the lower asset group (14%) are more likely than those in the higher asset group (3%) to believe savings accounts or CDs are best.

These results are from the second-quarter Wells Fargo/Gallup Investor and Retirement Optimism Index survey, conducted by web using the Gallup Panel from May 7-14, 2018.

The poll is based on U.S. adults with $10,000 or more invested in stocks, bonds or mutual funds, either within or outside a retirement savings account.

The combined 65% of investors choosing either stock funds or individual stocks in the May survey corresponds with stocks' dominance in investors' portfolios. Eighty-six percent of those surveyed report having money invested in stock funds and 61% in individual stocks.

The only other financial product investors report using as widely is savings accounts or CDs, with 80% saying they have one of these.

 

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