Sunday, January 07, 2007

Wait Till the Baby Boomers Retire

It is a not commonly pointed out fact that America is not the only country with Baby Boomers. Practically the entire developed world has a plurality of 50+ somethings that are on the verge of retirement...or in the case of Italy, they've already retired about a decade ago.

What also isn't commonly pointed out is that these Baby Boomers will start retiring pretty much now, and if they haven't already, they'll be switching their investments from risky stocks, to less risky bonds.

This selling will put downward pressure on equity prices leaving future stock prices in the hands of future generations to make those companies more profitable than ever so that their stock prices continue to increase.

But, being forever the cynic, when I look at the French students protesting to my Gen X breatheren opining whether Britney Spears is wearing panties, somehow I don't think this



will continue.
at

4 comments:

  1. Anonymous4:08 AM

    They can try and sell, who will buy. Generally it is those over 45 who are no longer paying mortgages or their offspring's tuition that invest their excess income. My situation; one child left to go through university and six years on my mortgage. Will I keep buying into a market that keeps trending down?

    ReplyDelete
  2. Anonymous12:20 PM

    "They can try and sell, who will buy."

    That is why true capitalists are internationalist also because they do not like any barrier for free trade. It is so stupid that congres intervene foreign investment to buy bussiness in USA like dubai and Chines unico incident.

    When you sell your house, you want more buyers than less. When you limited yourself to a very few buyers, you suffer. Simple rule of supply and demand is nature of market ecomomy or capitalism.

    National socialism (NAZI)is worst form of economy only second to communism. Unfortunately, some people in USA are looking for nazi economy like those in Union, or nationalist elements.

    Well, it is good for me since this creates low stock price for me to buy in. Eventually, globolization is unstopable trend. My holding will appreciate greatly when all market are open to foreign investors.

    ReplyDelete
  3. Anonymous4:02 PM

    I wouldn't worry about falling equities too much about 80% of volume is done by institutions.

    Those being pensions funds et al.

    Public Service Unions and Teachers pension funds represent some 14 trillion dollars in North America.

    Equity Markets are about 13 Trillion whilst Bond Markets are about 25 Trillion.

    So folks the moral of the story is continue to expand social services and all will be well. Hire a bureaucrat save a Market. UGH.

    ReplyDelete
  4. Captain Capitalism4:38 PM

    Be curious on your take on this;

    http://captaincapitalism.blogspot.com/2006/09/when-you-abandon-fundamental-value.html

    ReplyDelete