Just wait till the Baby Boomers start pulling out of the market for (ha ha ha) "retirement."
Oh, that's right. You think this current little hiccup the economy is having is a "crisis."
Ho ho ho!!!!! Oh, that's rich!
Keep contributing to those 401k's kiddies!
I agree with you regarding the coming further implosion in 401Ks as baby boomers "retire" (if they can), although I'm not sure what alternatives there are for normal people. Any ideas?
ReplyDeleteCaptain - I think your analysis is correct, but the issue is when will this start hurting the market, to what degree and how quick any such correction will be.
ReplyDeleteI'm suggesting that this will be a gradual correction, since not all boomers retire at the same time and that their shifts from equities to bonds are gradual as they age.
Let me also suggest while the US and many developed nations have boomers working through their systems, that's not necessarily true in the rapidly growning low cost countries such as India, the former Soviet Union, Vietnam, China, countries. As the citizens' wealth rapidly increases, they too will seek investment opportunities (if allowed).
Keep in mind too that many of the independently wealthy often remain full invested in equities - largely because they look at wealth beyond their generation.
As for contributing to those 401Ks, what better options are there?
Anon,
ReplyDeleteI concur. It's not like they're all going to switch to fixed income tomorrow, but it will still put a lengthy downward pressure on stock prices.
I'm just thinking Gen X is going to have such a bad taste in its mouth with housing prices collapsing and stock prices collapsing (not to mention none of them seem able to have money left over to invest) you will not see a return to those lofty valuations.
Though, I could be wrong, American's love bubbles. How else can you not work and buy everything you want?