Americans choose cash over real estate

by Diana Aqra30 Jul 2013

A new study has found that more Americans prefer cash investments than real estate in a 10-year investment horizon.

One-in-four Americans preferred cash investments while only 23% preferred real estate when investing in a period no longer than 10 years, according to a study by Bankrate.com. Roughly one-in-six preferred investments in precious metals, 14% preferred stocks, and only 8% in bonds.

Cash investments generally include money market accounts and certificates of deposit, or CDs, which have five-to-ten year investment horizons and relatively low yields, a release about the study by Princeton Survey Research Associates said. They study interviewed more than 1,000 adults in the US.

Yields for a US $10,000 initial investment in an average money-market account was only  .11% per month while  an average five-year CD would gain about.78% per month, according to the release.

“Real estate is not only very cash-intensive, but often illiquid,” said Greg McBride, CFA and a Bankrate.com’s senior financial analyst.  “Americans not saving enough is well documented, but hunkering down in cash investments and settling for low returns will only magnify the problem of not having a sufficient nest egg to meet longer-range financial goals such as retirement,” he said.

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