Friday, 16th of October 2009 at 08:56:20 AMAccording to a post at Bankrate.com by Sheyna Steiner, Americans still feel their home is a good long term investment. However, the scary part is that nearly half (48%) are worried about losing their home or the ability to afford it. An exert of the article follows:
American families are stricken by fear about finances, but not enough to change their savings behavior, according to Bankrate’s new survey. And although the markets have shaken their faith in certain bedrock financial principles, the American dream of homeownership remains alive and well. Bankrate commissioned Princeton Survey Research Associates International to gauge the attitudes of Americans about finances and family life and discovered several surprises.
Among the findings:
* About nine out of 10 (92%) survey respondents believe that a home is a good investment for the future. But nearly half (48%) of Americans worry about losing their home or being unable to afford the home they live in.
* Americans are split about whether stocks and mutual funds are good long-term investments. Four out of 10 Americans (39 percent) don’t believe the stock market offers the best chance for long-term returns, while another 12 percent don’t know how they feel about stocks. But 49 percent do have faith in the market.
A study to be published this fall in the Journal of Portfolio Management compares the average return of real estate investments with U.S. stocks and other asset classes. The authors found that in the last three decades, the average annual return on residential real estate was 5.92 percent versus 12.33 percent for the stock market, as measured by the Standard & Poor’s 500.
“Over time, the stock market is more liquid with a higher rate of return, but in the short term much more volatile,” says Jack Clark Francis, professor of finance and economics at Baruch College and a co-author of the study called “Contrasting Real Estate with Comparable Investments, 1978-2008.”
Read the full post
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