Real Estate is the Top Long-Term Asset, According to Survey

September 12, 2019 | Alternative Investments recently took a survey of over 2000 investors between the ages of 35 and 65.

Real estate is the top asset class for the long-term, according to a recent survey. Roughly 22% of respondents to the Sophisticated Investor survey deemed it so. Even more interesting is that 25% of those respondents between 45 and 54 favored real estate over other alternatives.

Stocks Still Fund Retirement

Just 18% of those investors that responded chose traditional stocks and bonds as the safest way to fund their retirement.

That is a sign that the hangover from the credit crisis and internet bubble that decimated many IRAs and 401Ks in the upper end of the survey demographic range still lingers. If you are 50 years old today you have endured two massive declines in the stock market while trying to build your nest egg and the memory apparently has stock for many of them.

Bank Savings accounts were selected almost as often as stocks and bonds in the survey. With bank savings accounts paying around 1% or less right now I find this answer surprising. Being too risk-averse can do as much if not more damage to your hopes of a comfortable retirement.  An additional 9% chose Treasury Securities and 11% chose fixed annuities. However, both assets offer too small yields to allow for sufficient returns over time.

Real Estate Confounds Some Analysts

The choice of real estate is a bit puzzling. Most investors fail to allocate much capital to Real Estate Investment Trusts. Most major brokerage firms suggested allocations are laughing light on these alternatives to stocks.

REITs remain the best way to gain exposure to commercial real estate markets. However, most retirement accounts maintain little exposure to these assets right now.


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