Which investment typically provides the lowest return over the long term?

The investment that typically provides the lowest return over the long term is cash equivalents. Cash equivalents, such as money market accounts, Treasury bills, and other short-term securities, are considered to be low-risk investments. They offer high liquidity and safety for investors looking to preserve their capital.

However, this safety comes at a cost, as cash equivalents generally provide lower returns compared to other asset classes like stocks, bonds, or real estate. While cash equivalents can be an integral part of a diversified portfolio, especially in serving as a secure place to hold funds in the short term or during volatile market conditions, they do not tend to keep pace with inflation over the long run. As a result, the purchasing power of the money in cash equivalents can diminish over time.

In contrast, stocks, bonds, and real estate have more potential for higher returns due to the growth potential of the markets they represent. Therefore, while cash equivalents are suitable for conservative investors, they typically yield the lowest return when considered over extended periods.