A lot has changed in the past year. People’s perception of work, family gatherings, and healthcare have all been shifted. Compared to a year ago, almost all of us look at the world a little differently.
But when it comes to investments, it seems that even COVID-19 and the rocky year of 2020 can’t shake our faith in real estate.
In the Spring of 2020, we wrote an article about people’s preferences in investments. Using data that was collected early in the year (pre-COVID-19 pandemic), we discussed how real estate was high on the list for America’s favorite investment. Sitting at #2, just behind stocks, real estate was cited by 26% of respondents as their favorite investing option. It was just two percentage points behind the leader.
But over the past year, so much has changed. So much has shifted in how we work, shop, and live; surely our favorite investments would have changed as well.
According to a recent survey from the Sophisticated Investor, not much as really changed in terms of people’s favorite investments.
Real estate and stocks remain high on the list. In fact, the only thing that has changed, according to this survey at least, is that they have switched spots; stocks are now #2 and the favorite is real estate!
Note: It’s a Survey, Not a Study of Returns
It’s worth noting that this article is based on a survey, a survey that looked at people’s opinions, not actual data or financial returns. So the results don’t tell us what is the best investment, nor do they tell us which is the safest option or the option that will bring the highest returns. It merely tells us what people prefer.
Still, this can provide valuable insight into your investment selections.
Survey Results in Total
While the survey divided people into different groups by age, we’ll start by looking at the results a whole. Overall, the survey interviewed roughly 5,000 people and asked a simple question: what investment do you think will do best in 2021?
Respondents were given seven options to choose from:
- Real estate
- Stocks and/or bonds
- Precious metals (Gold and silver)
- Savings accounts
- Cryptocurrencies like Bitcoin and Ethereum
- Fixed annuities
- U.S. Treasury-issued securities
First Place: Real Estate Believed to be the Top 2021 Investment By Over a Quarter of Respondents
In the overall results, real estate was selected by 27.33% of all respondents, placing it in a narrow first place over over stocks and bonds, which was selected by 25.2% of all respondents. These were the only two selected by over 20% of respondents.
Gold and silver did well, being selected by just over 18% of all respondents, while nothing else went far over 10%. Savings accounts did okay (10.74%), while cryptocurrencies did not break 9%. Fixed annuities and U.S. Treasury securities were both around 5%.
Investment Property: A Look at the Generations
When you break down the information into different generations, you begin to see some interesting differences between the people of various ages.
For this younger set of investors, real estate seems to be right in the middle; it’s not high on their list, but it’s not at the bottom either. Of all the people who listed real estate as their top choice, 21.9% were from this age bracket. But this was actually the largest group of all people selecting real estate.
However, of all people choosing cryptocurrency to perform the best in 2021, almost 31% were ages 25-35, the largest group selecting this option. This group also seems to prefer savings accounts in the bank, as they were over 28% of the group choosing this option.
This group also seems to prefer cryptocurrencies and place real estate somewhere in the middle. This seems fairly typical, and fits with the expectations of a tech-savvy, tech-comfortable generation.
This age group made up the largest set of people selecting fixed annuities, but overall their preference for one investment option over another seems to be widespread. They made up right around 20 to 25% of all the different investment options. For real estate, they were actually 19.24% of the group, representing the smallest portion of people selecting this option.
55 to 64 year-olds shared many of the same stats as 45-54. They made up 20.47% of all people selecting real estate, which was good for 2nd place in this category. Overall, they seemed to have diverse thinking in regards to investments, as they never rose above 15% but never fell below 25% for all investment categories.
65 and Over
The only investment that this group seems to not like is cryptocurrencies, as they were only about 10% of all people selecting this type of investment as the top performer in 2021. Fixed annuities seemed to be more to their liking, as they made up about 23% of all people choosing this category.
Overall, it seems interesting that while some forms of investments are loved by some groups, real estate performs fairly well among all age sets. Of all the people selecting real estate to perform the best in 2021, all groups were right around 20%. The lowest was 45-55 year olds, who made up 19.24% of all people choosing real estate, while the highest was actually 25 to 34 year olds, who made up 21.29%.
Women, it seems, prefer real estate while men tend to favor stocks and bonds. Almost 16% of all respondents were women selecting real estate as the top-performing investment in 2021, while only 11% of all respondents were men selecting real estate.
Increase Your Chances of Success with Investment Property
Real estate, like all investments, can be risky. Success is never guaranteed, but you can increase your chances of financial success with an affordable loan on your investment-property purchase.
Contact our team today to learn more about the real estate loans for investments or your own personal home!