Only about five percent of Americans own gold. At least that’s the number according to recent estimates by the US Gold Bureau. This is an incredibly small percentage compared to real estate or stocks ownership numbers, which most analysts believe to be upwards of 50%. This fact in and of itself shouldn’t surprise us as gold has really only come into the limelight in the last few years. Back when it was $300 per ounce, you couldn’t give the stuff away. When it hit $1900, demand had never been higher. There’s one fact however that is truly alarming considering the very low percentage of the population that owns gold: it is actually perceived as the best investment available today.
For the second year in a row, more Americans chose gold as “the best long-term investment” than any other asset class. Twice now, Gallop surveys have found that American’s generally believe gold to be a better long-term investment than real estate, stocks, bonds, mutual funds and even savings accounts and CDs. In fact, the results are not even close. Of the respondents recently surveyed, 28% picked gold as the best investment placing it miles ahead of real estate, which came in second at only 20%.
So what does this mean for the future of gold demand and prices? For decades now, real estate has been the cornerstone of personal wealth in this country. Undying demand helped drive and support high prices year after year. Now we find ourselves in a situation in which only 20% of Americans believe real estate is the place to be while more than twice as many actually own property.
Let’s compare that to gold. If only five percent of Americans own the stuff while nearly six times that many believe it to be the best investment, there is very little argument to be made that we won’t continue to see massive investment inflows into the gold market in the coming years. It’s simple math.
Though gold has had a rough few months we can’t forget one simple fact: it’s taken the better part of a decade to change Americans’ perceptions of the importance of gold. That change is not going to disappear overnight. Placing a long-term bet against real estate 20 years ago would have been a dangerous game, in part because of the power of public perceptions. Likewise, betting against what is now the best long-term investment as perceived by the American public may be equally unwise. Take a look for yourself: The numbers don’t lie.
April 9-12th 2012 – Gallup Pole
“Which of the following do you think is the best long-term investment?”
Real Estate 20%
Stocks/Mutual Funds 19%
Savings Accounts/CDs 19%
Other/No Opinion 6%
Mike Getlin is Executive Vice President of Merit Financial, home to America's fastest growing physical gold IRA company. Please send comments or questions to firstname.lastname@example.org.