Class & Asset Class
Every year, Gallup asks people the most important question in American life –
boxers or briefs stocks, bonds, land or gold? This seems like a good question to ask, particularly if you’re a contrarian grump and would love to get your hands on what everybody hates. Due to the simple fact of supply and demand, I would say that whatever Americans believe is a “sure investment” is likely cruising for a bruising. So one headline is that Americans have lost their fear of the housing market (via Barry Ritholtz):
More interestingly, rich and poor Americans appear to have systematic differences in the way they view these asset classes. The upper class are big fans of real estate, whereas the poor are the most enamored of gold. Not coincidentally, the wealthy view gold as the worst asset class. We should be unsurprised that the wealthy have much more realistic views about asset preservation than the poor, that seems expected.
I would love to see whether there are systematic partisan differences in this. I’d suspect, based on Fox News commercials, that Republicans are particularly interested in shiny precious metals. There don’t seem to be any investments with a particular Democratic valence. However, there are some cross-cutting tendencies at play here – wealthy gold-haters are also much more likely to be Republicans. So there might not be any partisan patterns to investment decisions. But if there were, that would be quite interesting. In polls, people’s espoused opinions about the economy have strong partisan patterns – for example, today Republicans expect much more inflation than do Democrats. But if it actually flows through to their investment decision, that would be a costly signal of partisanship – letting mood affiliation overwhelm rational financial judgment. Now that would be interesting.