Investing in the stock market is one of the best ways to build long-term wealth – CNBC

The “Charging Bull” statue at Bowling Green in New York’s Financial District.

Drew Angerer | Getty Images

Americans are feeling less comfortable about investing in the stock market long-term, even though it’s one of the best ways to get ahead.

In 2021, 28% of Americans said that real estate was their preferred way to invest over a period of 10 years or more, according to a Bankrate survey. About one-quarter said cash investments, such as savings accounts or CDs, are their top long-term investing method, and only 16% said that they’d pick the stock market, according to the financial website.

That’s a large swing away from comfort in investing in the stock market. Just a year earlier, the markets topped the list with some 28% of Americans selecting it as their favorite investment.

“To see that when the market has performed as well as it has over the last year, that was surprising,” said Greg McBride, chief financial analyst at Bankrate.

The pandemic may have impacted how investors are thinking about investing, and made more Americans aware of having cash on hand for emergencies.

“Unfortunately, investors tend to chase performance,” McBride said. “That’s often the pattern that we see. Building wealth over the long term really requires the opposite tact.”

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Why the stock market makes sense for lasting wealth

Investing in the stock market with discipline and patience over decades is generally the best way to build wealth, financial experts say.

“What we’ve seen in the long term, for long holding periods, is that returns in the stock market have generally outperformed other asset classes,” said Roger Ma, a certified financial planner at lifelaidout and author of “Work Your Money, Not Your Life. 

For many people, their first stock investments are through an employer-sponsored retirement plan such as a 401(k) plan. But, even for those that want to invest outside of those accounts, it’s relatively simple to get started through several online brokerages that offer no fees.

“It has never been easier or less expensive for individual investors to participate in the stock market, and in a diversified fashion,” McBride said.

Managing a retirement portfolio or other long-term stock investments can also be quite easy, said Ma.

“You don’t need to know what to invest in, when to buy it and when to sell it,” he said. “It could be as simple as …….