Americans Love Real Estate and Gold for Long-Term Investing—But Are They Right?

When it comes to long-term investing, many Americans are betting big on real estate and gold. But financial experts say that might not be the wisest strategy.

According to a recent Gallup survey, 37% of Americans consider real estate to be the best long-term investment, followed by 23% who chose gold. Meanwhile, only 16% picked stocks or mutual funds, despite the market’s strong historical returns.

So, why the disconnect? And what should smart investors actually be doing with their money?

Let’s break it down.

The Popular Picks: Real Estate and Gold

Real estate and gold have something in common they’re tangible. You can see them, touch them, even live in them (in the case of property). That sense of physical ownership is comforting, especially when markets get shaky.

“You buy a house, you can see it, feel it, touch it. Your investment in stocks perhaps doesn’t feel real,” said Lee Baker, CFP and founder of Claris Financial Advisors.

And there’s no denying these assets have gained traction:

• Gold prices soared to over $3,500/oz in April, up from $2,200–$2,300 a year ago.
• Real estate prices, while cooling slightly, remain elevated. The median home price in the U.S. stood at $403,700 in March, down just a bit from the $426,900 peak last summer.

To many Americans, these assets feel like safe bets. But financial advisors are urging caution and perspective.

💡 What the Pros Are Saying: Don’t Chase the Hype

Financial advisors argue that the current enthusiasm around real estate and gold is driven more by emotion than economics.

“People are always chasing what’s hot, and that’s the stupidest thing you could do,” said Carolyn McClanahan, CFP and founder of Life Planning Partners.

This kind of investing based on buzz rather than fundamentals can leave you vulnerable when the hype fades and the markets correct.

📈 The Case for Stocks: Historical Performance Wins

It’s easy to forget in times of uncertainty, but the stock market has historically outperformed both real estate and gold over the long haul.

According to Morningstar Direct data for the 30-year period ending April 2025:

• S&P 500 (stocks): 10.29% annualized return
• Real Estate: 8.78% annualized return
• Gold: 7.38% annualized return

That difference may seem small year-to-year, but it compounds dramatically over time.

Stocks also offer built-in diversification when you invest in a broad index, you’re not putting all your eggs in one basket. You’re investing in thousands of companies across many industries, not one single asset like a home or a gold bar.

🧱💰 Why People Still Love Real Estate and Gold

Even with lower historical returns, real estate and gold remain popular for emotional and psychological reasons:

• They feel “safe”: You can physically own them.
• They’re viewed as hedges against inflation.
• They’ve historically performed well in times of economic uncertainty.

Gold especially tends to attract attention during global crises or market volatility. During the 2008 recession and the early 2010s, gold soared as investors looked for safety outside the traditional financial system.

Real estate, on the other hand, has the added bonus of utility. You can live in it, rent it, or leverage it making it a more dynamic asset than gold.

🤔 So, Should You Ditch Real Estate and Gold?

Not at all. Experts aren’t saying to avoid these assets they’re saying you need to put them in context.

Here’s how to incorporate real estate and gold into your portfolio wisely, without going all in:

🏢 Real Estate the Smart Way: REITs and ETFs

Buying and managing physical property comes with a lot of baggage—literally and financially. You’ll need to:

• Handle property maintenance
• Cover taxes and insurance
• Take on risk if the market crashes

Instead, consider Real Estate Investment Trusts (REITs) or real estate-focused ETFs. These let you invest in real estate markets without becoming a landlord.

REITs are publicly traded companies that invest in income-producing real estate, like office buildings, apartment complexes, or shopping centers. You can buy shares just like a stock—and you’ll often receive dividends in return.

“You’re exposed to real estate without concentrating into a single property,” McClanahan says. “And it will help diversify your portfolio.”

Even better: some mutual funds and ETFs include multiple REITs, offering even broader exposure.

Investing in Gold (Without a Safe)

If you’re set on adding gold to your portfolio, skip the vault. Storing physical gold is expensive, inconvenient, and prone to theft.

Instead, opt for gold ETFs, which allow you to track the price of gold without physically owning it. These funds are:

• Easier to buy and sell
• More liquid
• Less expensive to store or insure

“With the ETF, you get the value of gold but you don’t actually own it,” McClanahan says. And that’s a good thing.

💼 Final Word: Diversify With Intention

Real estate and gold aren’t bad. In fact, they’re proven stores of value that offer meaningful benefits. But they shouldn’t dominate your long-term strategy.

For most investors, stocks still represent the best path to long-term growth thanks to higher returns, better liquidity, and built-in diversification.

So before you go all-in on the next “safe” investment, pause and ask yourself: Is this a well-researched plan, or just a reaction to fear or headlines?

Smart investing isn’t about chasing what’s hot it’s about building a strategy that will last through any market.