The coronavirus economic shock has left Americans downbeat about stock market investing, even after the major market rebound off March lows, according to a new survey from Gallup.
Only 21% of Americans think stocks or mutual funds are the best long-term investment — down six points from 2019 — which is the lowest percentage recorded by Gallup since 2012.
The drop occurred among both high-income and low-income Americans, with a decline of nine points each from last year's survey, while the percentage of middle-income respondents who chose stocks or mutual funds did not change.
The results are from Gallup's annual Economy and Finance survey, conducted April 1–14 among 1,017 U.S. adults.
Along with stocks and mutual funds, other options in the survey included real estate, bonds, gold and savings accounts or CDs, and real estate remains the most popular investment choice.
The stock market has rallied more than 25% since the March 23 low and was in rally mode during the survey period.
Thirty-five percent of Americans say real estate is the most favored long-term investment, which has been the case since 2013. Over one-third of Americans have named real estate as the top investment since 2016.
Ownership of stocks is stable, according to the survey, at 55% of Americans, which has been the case since 2018. But confidence among stock owners fell, with only 30% picking stocks and mutual funds as the best investment — down from 37% in 2019. And even after a decade of economic expansion and record stock market gains, the percentage of Americans that own stocks has not reached its 63% peak from before the Great Recession. A low was reached of 52% in 2013.
Despite the drop, stocks and mutual funds remain the second most preferred long-term investment. Savings accounts or CDs (17%) and gold (16%) followed. Bonds lagged at roughly 8%.
Gold was the highest-rated investment in 2011 and 2012 after the Great Recession shot down stock and housing markets.
In the survey, 65% of high-income households said investing $1,000 in the stock market is a good idea, but fewer middle-income households (47%) and low-income households (39%) agreed. Over half of stock owners believe the investment to be worthwhile, while the sentiment among non-investors hovered closer to a third.
Overall, Americans are as likely to say that stocks are a good (48%) or bad idea (49%), and that has not budged since Gallup last asked this question in 2014. Gallup has returned periodically to this question over the past three decades and found that Americans were most negative about the investing outlook in 1990, but it reached a record level of 58% being positive on stocks in 1999.
Forecasts of the COVID-19 pandemic's economic impact are growing worse even as businesses in some Southern states are allowed to open as early as Friday — which drew criticism from both businesses and government officials.
Unemployment claims reached nearly 26 million on Thursday, according to data released by the Labor Department. An April survey by YPO found that 11% of global CEOs fear their business won't survive the pandemic, while roughly two-thirds expect revenue to still be lower a year from now and see a longer recovery period rather than sharp, quick economic rebound.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.