It is ironic that just as the stock market hits 3-year highs after a surge from March 2009 lows,  Americans are unloading stocks.

A new Gallup poll shows that “the percentage of Americans saying they hold individual stocks, stock mutual funds, or stocks in their 401(k) or IRA fell to 54% in April — the lowest level since Gallup began monitoring stock ownership annually in 1999.”

Upper class Americans, those who make more than $75,000 a year, have a stock ownership rate of 87%. The poor and middle class probably do not have the money to hold shares. Their median incomes have been under pressure for a decade and high unemployment rates probably  have undermined the discretionary income of these people.

The second irony of the poll is that 33% of American believe that real estate is the best long-term investment out of a list which includes stocks, savings accounts and bonds. This opinion obviously comes during a period  in which many home prices are down by 50% in the last four years.  Experts say prices may fall another 10%.

There are scores of possible explanations of the poll results. One is that Americans are smart. They understand that a stock market which has more than doubled in a short time is nearly too good to be true. The DJIA would be well above its all-time high if it only rose another 15%. It would not take much in terms of a slowdown in consumer spending, high oil prices, or another shock to the financial system to pull indices down from unprecedented heights.

Real estate, however, has moved to levels similar to those in 2002 and 2003. Another drop of 10% would put prices back were they were in the mid-1990s. Mortgage rates are still near all-time lows. New home building is stagnate. Unemployment rates have begun improving. Housing may not be a good investment over the next year. But, those who buy and hold homes may do very well over the next ten or twenty years.

The poll shows above all else that Americans are contrarian, and, if they are right, stocks will fall and real estate will rise. With one near a peak and another near a trough, that is not such a bad guess.

Methodology: Results for this Gallup poll are based on telephone interviews conducted April 7-11, 2011, with a random sample of 1,077 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

Douglas A. McIntyre

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