The Motley Fool’s 2025 Long-Term Investing Survey finds younger investors are gravitating toward higher-risk, alternative investments like crypto and real estate, while older generations favor time-tested investing strategies like index funds and dividend stocks.
Despite short-term concerns about market volatility, stubborn inflation, and rising tariff and trade tensions, most investors from Gen Z to baby boomers are taking a long-term, buy-and-hold investing approach – though the specific investments they choose vary pretty significantly by generation.
Across all ages, stocks remain the leading long-term investment of choice, but opinions on sectors, risk, and return expectations vary widely.
What do individual investors believe is the best long-term investment?
Investing in stocks is the most popular long-term investment strategy for all age groups, although enthusiasm for them varies. Just 23% of baby boomers selected stocks as their top long-term investment compared to 35% of both millennials and Gen X. But for boomers, that’s somewhat offset by a higher percentage of that generation selecting index funds as their preferred long-term investment than any other.
There are a few other notable splits among generations’ choice for the best option for a 10-plus-year investment:
- Baby boomers are more likely than any other generation to say annuities (12%), gold and precious metals (12%), and bonds (12%) are the best long-term investments.
- Gen Z and millennials are more likely to favor cryptocurrency (16% and 13%, respectively) and real estate (22% and 18%).
- Gen Z is slightly more bullish on private equity and alternative investments (4%), although interest is low across all age groups.
Investment | Gen Z | Millennials | Gen X | Baby boomers | All |
|---|---|---|---|---|---|
Stocks | 29% | 35% | 35% | 23% | 32% |
Real estate | 22% | 18% | 16% | 15% | 18% |
Index funds | 14% | 11% | 15% | 19% | 14% |
Cryptocurrency | 16% | 13% | 8% | 5% | 12% |
Bonds | 8% | 10% | 9% | 12% | 9% |
Gold/precious metals | 4% | 6% | 8% | 12% | 6% |
Annuities | 3% | 3% | 6% | 12% | 5% |
Private equity/alternative investments | 4% | 2% | 2% | 2% | 3% |
Other | 0% | 1% | 1% | 2% | 1% |
Why some investors don’t choose stocks as the best long-term investment
With the S&P 500 returning more than 10% on average per year to investors since the 1950s, it's hard to argue against stocks as a top long-term investing option. Still, 50% of respondents picked an investment other than stocks and index funds as their preferred choice. Here’s why:
- More than 1 in 3 Gen Z respondents who didn’t pick stocks as their preferred long-term investment said they are too risky. That’s despite 16% of all Gen Z respondents saying crypto – a historically volatile asset – is their preferred pick.
- Volatility concerns rise with age: Just 12% of Gen Zers cite it as a reason to avoid stocks compared to 37% of Gen X and 42% of baby boomers. Older generations in or near retirement may be more sensitive to volatility.
- Lack of understanding about stock investing is a key concern for Gen Z respondents but drops off among older investors.
Reason | Gen Z | Millennials | Gen X | Baby boomers | All |
|---|---|---|---|---|---|
Too risky | 36% | 31% | 26% | 30% | 31% |
Too volatile | 12% | 24% | 37% | 42% | 26% |
Returns aren't high enough | 15% | 12% | 13% | 11% | 13% |
Prefer tangible assets | 9% | 12% | 11% | 7% | 10% |
Don't have the money | 11% | 11% | 7% | 2% | 9% |
Don't understand stock investing | 15% | 6% | 5% | 7% | 9% |
Other | 2% | 2% | 2% | 2% | 2% |
Which types of stocks do investors favor for long-term returns?
Growth stocks are the stock type of choice across all generations, led by baby boomers (56%) and Gen Z (46%). Millennials (29%) and Gen X (33%) are more interested in dividend stocks compared to other generations.
Index funds and ETFs received relatively little interest among other stock investments despite their appeal in being a low-cost way to access diversification and thematic investing.
Small-cap stocks received the least interest as a top long-term investment across the board. Investors may view their risk as too high for their potential reward.
Types of stocks believed best for long-term investing
Type | Gen Z | Millennials | Gen X | Baby boomers | All |
|---|---|---|---|---|---|
Growth stocks | 46% | 39% | 36% | 56% | 41% |
Dividend-paying stocks | 19% | 29% | 33% | 28% | 28% |
Value stocks | 20% | 17% | 13% | 0% | 15% |
Not sure | 6% | 5% | 11% | 7% | 8% |
Index funds/ETFs | 4% | 8% | 6% | 3% | 6% |
Small-cap stocks | 5% | 2% | 1% | 6% | 3% |
Sector of stocks believed best for long-term investing
Tech stocks are the favorite sector for long-term investing across all age groups surveyed by The Motley Fool, particularly among Gen X (40%) and baby boomers (36%). Overall, 33% of respondents said technology is the best sector for a 10-plus-year investing time frame, and no other sector or industry was picked by more than 13% of respondents.
Healthcare, real estate, and AI stocks are slightly more positive among Gen Z when it comes to long-term investing compared to other generations.
The variety of views on the best stock market sectors and industries for long-term investing suggests that most investors might opt for a diversified portfolio.
Sector/industry | Gen Z | Millennials | Gen X | Baby boomers | All |
|---|---|---|---|---|---|
Technology | 25% | 32% | 40% | 36% | 33% |
Healthcare | 16% | 12% | 11% | 7% | 13% |
Real estate | 14% | 10% | 9% | 8% | 11% |
Energy & utilities | 8% | 8% | 9% | 14% | 9% |
AI | 10% | 8% | 8% | 9% | 9% |
Not sure | 6% | 7% | 11% | 15% | 9% |
Financials | 9% | 9% | 4% | 4% | 7% |
Cryptocurrency-related stocks | 6% | 8% | 4% | 5% | 6% |
Consumer (staples and discretionary) | 3% | 3% | 3% | 2% | 3% |
Industrials | 1% | 2% | 1% | 1% | 2% |
What returns do long-term investors expect?
Of investors surveyed by The Motley Fool, 74% believe returns above 8% are reasonable for long-term investing, while 37% expect more than an 11% annual return. As a benchmark, the S&P 500 has returned more than 10% annually on average since 1957.
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Investor return expectations are largely similar across generations: 40% of Gen Z respondents and 39% of both millennials and baby boomers expect their long-term investments to net 11% or more each year. Gen Xers are slightly more optimistic, with 47% believing their long-term investments will return more than 11% annually.
Return | Gen Z | Millennials | Gen X | Baby boomers | All |
|---|---|---|---|---|---|
Less than 5% | 4% | 3% | 2% | 1% | 3% |
5% to 7% | 19% | 21% | 16% | 18% | 18% |
8% to 10% | 37% | 37% | 35% | 42% | 37% |
11% to 13% | 19% | 20% | 21% | 19% | 20% |
More than 14% | 18% | 15% | 18% | 14% | 17% |
Not sure | 3% | 5% | 8% | 7% | 5% |
The top challenges for long-term investors
Staying patient during market volatility is the No. 1 challenge for long-term investors surveyed by The Motley Fool (31%), although obstacles vary by generation. Here’s how they break down:
- Patience during market volatility is more difficult for baby boomers (42%) than for younger generations, particularly Gen Z (22%). Older investors are more sensitive to market volatility because they have shorter time horizons for their investments.
- Lack of money to invest is a larger issue for millennials (16%) and Gen X (17%) than it is for other generations.
- Needing access to money in the short term is the top challenge (17%) for Gen Z, more than for all other generations.
- Timing the market is a top challenge to long-term investing for just a sliver of baby boomers (5%) compared to more than 10% of all other generations.
Challenge | Gen Z | Millennials | Gen X | Baby boomers | All |
|---|---|---|---|---|---|
Staying patient during market volatility | 22% | 30% | 37% | 42% | 31% |
Not having enough money to invest | 14% | 16% | 17% | 12% | 15% |
Trying to time the market | 16% | 17% | 11% | 5% | 14% |
Managing risk | 9% | 11% | 9% | 19% | 10% |
Not knowing what to invest in | 13% | 9% | 10% | 11% | 10% |
Needing access to invested money sooner | 17% | 9% | 7% | 2% | 10% |
Sticking with a plan and not tinkering | 9% | 8% | 9% | 8% | 8% |
Other | 0% | 1% | 1% | 1% | 1% |
Read: The Motley Fool’s Market Volatility Toolkit
Investing smarter for the long run
Long-term investing preferences vary by age, and so do expectations around risk, returns, and preferred sectors. Gen Zers seek growth, while boomers are more focused on dividends and avoiding volatility. Regardless of age, it’s clear that patience and riding out market swings are key to overcoming the most-cited long-term investing challenges.
To align strategy with goals, consider tools that simplify diversified investing, like long-term ETFs and automated investments, which can shift otherwise stressful decisions about timing the market and picking individual stocks out of your hands and into those of trusted asset managers.
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