What effect will America’s aging population have on investment?
W.Snodsworth asked:
With so many people getting older what effects will this have on the markets? Are withdraws for medical purposes going to have na effect? Will this generation of elderly leave as much for their children as previous generations? Will the aged pull stock / mutual fund investments if economists see a long term downturn in the economy? Are these people losing their retirement savings to the markets as we speak? What are the positive aspects for the markets with so many people over the age of fifty in America?
With so many people getting older what effects will this have on the markets? Are withdraws for medical purposes going to have na effect? Will this generation of elderly leave as much for their children as previous generations? Will the aged pull stock / mutual fund investments if economists see a long term downturn in the economy? Are these people losing their retirement savings to the markets as we speak? What are the positive aspects for the markets with so many people over the age of fifty in America?
Thoughts on this would be greatly appreciated.
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May 28th, 2009 at 5:46 am
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An excellent question . It is hard to see one point of development as there are many things happening as you mentioned. The baby boomers are making some difference to life in America already. Retirement pensions I think will be the next issue . It will be a surprise like the mortgage banking surprise is today .
May 30th, 2009 at 8:14 pm
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Actually when people sale stocks, investments, etc it adds to the economy. That is why the tax cuts worked because when you only have to pay 15% to cash out investment, that is when people will sell to avoid high capital gains. As far as investment, invest in products older people will need….as we are living longer….
June 2nd, 2009 at 2:37 am
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Are withdraws for medical purposes going to have na effect? in a few cases yes, however overall this shouldn’t worry you. while people will need an increased amount of medical help I dont expect this to significantly influence the movement of stocks.
Will this generation of elderly leave as much for their children as previous generations? all of your questions are great, this is perhaps one of the best. the answer, sadly enough is no. the avg. family has 1 1/2 months of savings, if the avg baby boomer investor has 20x that much the will only have 2 1/2 years of savings. by the time they go 10ft under they will leave a pretty unexciting will.
Will the aged pull stock / mutual fund investments if economists see a long term downturn in the economy? not more than u or I would; perhaps a little less. As people grow older they tend to become more conservative (investing wise) so if they hold, say, JNJ they may not sell no matter what.
Are these people losing their retirement savings to the markets as we speak? if they are invested (as I would suspect at least 80% of them are) in regular stocks and funds than the answer is yes.
What are the positive aspects for the markets with so many people over the age of fifty in America? the pharma stocks will get a big boost, and about 15-20 years after the pharma bubble the nursing home companies will experience one.
With so many people getting older what effects will this have on the markets? people will pull their money out to live on, however this will be gradual. I expect that stocks should function close to normally while the baby boomers age.
remember the upside of the baby boom is that they had kids and those kids are entering the workforce right about now. more working people means more consumers.