The latest survey by New York-based Sophisticated Investor shows investor asset class confidence reflects the prospering state of the U.S. economy.
A survey of 2,000 Americans between the ages of 18 and 65+ examines the asset classes in which investors had the greatest confidence. Results showed that respondents are more confident in the U.S. dollar and the stock market than commodities and cryptocurrencies, despite both the prices of gold and bitcoin reaching record heights.
Currently, economic indicators all point to a flourishing U.S. economy: The U.S. gross domestic product has been strong, and both the U.S. Dollar Index and U.S. financial markets have been growing. Economic indicators are best reflected in which asset classes hold the most confidence for investors.
As shown in the findings, when asked as an investor which asset class they were most confident in at the moment, 23.4 percent of the 2,000 respondents indicated the “U.S. dollar.” Yet interestingly, when demographic filters were applied, that percentage skyrocketed to 36.9 percent of respondents between the ages of 18 to 24. Younger investors, appeared to be most confident in the U.S. dollar, with 27.9 percent of respondents between ages 18 and 44 selecting that response.
Yet — for older investors — stocks are still king. When demographic filters were applied to the survey results, 24.4 percent of respondents 45 and over selected stocks, making it the most popular response.
“These survey findings don’t surprise me in the least. The U.S. economy is booming — every economic indicator is pointing to that fact. Therefore, investor asset confidence will mirror a strong economy,” said Amine Rahal, CEO of Sophisticated Investor.
As an asset class, 20 percent of those surveyed designated that stocks made them most confident. Demographically, however, nearly a third of seniors 65+ 29.2 percent) selected this asset class, making it the first choice.
The fourth most popular response, coming in at 14.6 percent, was fixed income. It seems investors from all representative demographics were drawn to the smaller, but steady, gains provided by fixed income investments. (A smaller group (8.7 percent) selected “other alternative assets”, e.g., venture capital, hedge funds, wine and art.)
Perhaps most intriguing, were the last two indiciations from the survey: Commodities and cryptocurrencies ranked dead last, coming in at 7.4 percent and 4.6 percent, respectively, despite solid performance numbers from both classes as of late. These percentages seemed to be indicative of the overall confidence that investors have in the U.S. economy. Commodities such as gold are commonly seen as the investment of choice during an economic downturn, and cryptocurrencies are a relatively new and highly volatile asset class compared to the other options. Investors would be less apt to invest in something they weren’t as accustomed to when the U.S. economy was flourishing.