We conducted a study asking 2,000 US respondents which asset class they had the most confidence in. We used Google Surveys and targeted males and females between the ages of 18 to 65+ from coast to coast. We asked the following question with several possible responses:
As an investor, which asset class are you the most confident in right now?
- The US Dollar
- Real Estate
- Fixed Income
- Other Alternative Assets
- Commodities (Gold, Oil, etc.)
- Cryptocurrencies (Bitcoin, Ethereum, etc.)
Young Investors Are Most Confident In The US Dollar As An Asset Class
When asked which asset class they had the most confidence in at the moment, 23.4% of respondents stated the “US dollar”. Yet, some very interesting results occur when demographic filters are applied. The percentage skyrockets to an astounding 36.9%, specifically for males and females between the ages of 18 to 24. In general, younger investors seem to have the most confidence in the US dollar as an asset class, with 27.9% of respondents between 18 and 44 years old choosing that answer.
However, compelling additional insight is provided when demographic filters are applied to the survey results for respondents 45 and over. For older investors, stocks seem to provide the most confidence as an asset class with 24.4%, making that the most popular response. Likewise for the 45 and older demographic, real estate was the second highest response, at 22.6%, followed by the US dollar at 19%.
This drastic variance in asset confidence between younger and older demographics regarding the US dollar could simply be explained by the actual investor profile. Younger investors are more likely to delve into the volatile currency market with short-term bets, than older investors who are more mindful where their retirement savings are being placed.
Real Estate Provides The Most Confidence As An Asset Class for 55 to 64 Year-Olds
In general, real estate is one of the oldest and most popular asset classes. Looking at the second largest response, this is proven to be true.
The second largest group of respondents at 21.4%, stated that real estate was the asset class they were most confident in right now. This is unsurprising given that both young and old investors alike, are aware of the benefits of real estate investment.
Curiously, this percentage increases even further when demographic filters are applied for individuals between the ages of 55 and 64 years old, to 22%. Thus, that makes real estate the most popular response for individuals within this specific demographic.
Stocks Provide The Most Confidence For Investors 65+
Investing in stocks is an excellent means of increasing net worth. As an asset class, 20% of respondents indicated that they had the most confidence in stocks – therefore, making it the third most popular response.
However, compelling results occur when demographic filters are applied specifically to 65+-year-olds. Interestingly, 29.2% of seniors stated that they had the most confidence in stocks – that is nearly a third of all respondents in this demographic. Factoring the percentage increase, it seems stocks provide the most confidence as an asset class for people 65+. This could be best explained, considering the majority of individuals 65+ have IRAs, which encompass a number of financial products including stocks.
Fixed Income Investments Are Fourth With All Demographics
With all demographics surveyed, fixed income investments were the fourth most popular response at 14.6%.
Investors across the board seem to be attracted to the lower, by steady gains that fixed income investments provide, compared to other asset classes. Government and corporate bonds the best-known type of fixed income security, but exchange-traded funds (ETFs) and mutual funds are also included in this category.
Other Alternative Assets Are The Go-To Option For Some Investors
A smaller, albeit still important group, 8.7%, indicated that they were most confident with other alternative assets.
Alternative assets are classified as alternative investments that aren’t positioned in the conventional investment category. Examples of alternative assets include hedge funds, venture capital, rare coins, wine, and art, amongst others.
Commodities and Cryptocurrencies Ranked Dead Last Despite Performing Well
An intriguing component of the survey results is the last two responses. Commodities (gold, oil, etc.) and cryptocurrencies (Bitcoin, Ethereum) ranked dead last at 7.4% and 4.6%, respectively, despite the fact that both assets have been performing well as of late.
At the time of publication, the price of gold is $1.4K per ounce, and Bitcoin is breaking $11k per coin. Perhaps the best explanation for these two asset classes ranking rock bottom is investor confidence in the US economy as a whole. All economic indicators are pointing to a strong economy. Considering that investors turn to commodities such as gold, as a safe-haven during an economic downturn, the low ranking in the survey isn’t surprising.
Apropos of cryptocurrencies, this asset class is still young compared to all others in the survey, coupled with its highly volatile nature. Seeing as the US economy is doing well, investors seem less inclined to put their money into an asset class that may be less familiar to some.
Suffice it to say, the US economy is very healthy at present. The US Dollar index is on the rise, the growth in US GDP has generally been strong, and employment data and wage growth is as healthy as it has ever been. Not to mention, US financial markets have steadily been on the rise. These economic indicators are best reflected in the asset classes which hold the most confidence amongst investors. All these components are contributing to investors being extremely confident in the US economy.
Details About The Study And RMS Score