What can we learn by overlaying demographic data on top of a long-term chart of the stock market?
Demographics play a significant role in shaping the economy and financial markets in several ways. The composition of a population, including age, income, education level, and geographic distribution, can have profound effects on economic growth, consumption patterns, labor force dynamics, and investment trends. Here are some key ways in which demographics impact the economy and financial markets:
Labor Force and Productivity: The size and age distribution of the workforce directly influence economic productivity and potential growth. A young and growing population may contribute to a larger labor force and increased productivity, which can fuel economic expansion. Conversely, an aging population with a shrinking labor force might lead to reduced productivity and slower economic growth.
Consumption and Saving Patterns: Demographics influence consumer behavior and spending patterns. For example, younger populations often have higher consumption rates as they enter their peak spending years, while older populations tend to save more and reduce their spending. These trends can impact various industries, from retail to healthcare and leisure.
Housing Market: Demographic shifts can affect the demand for housing. As the population grows or migrates to certain regions, housing demand may increase, leading to higher property prices. Additionally, changes in household compositions, such as more people living alone or multigenerational households, can impact the types of housing demanded.
Social Security and Pensions: An aging population can put strain on social security systems and pension funds. With more retirees relative to the working-age population, there might be a higher dependency ratio, potentially leading to increased government spending and financial pressures on public budgets.
Investment Patterns: Demographics influence investment trends. For example, as the population ages, there may be increased demand for healthcare services, pharmaceuticals, and retirement-related products. Understanding demographic shifts can help investors identify sectors and companies likely to experience growth.
Interest Rates and Inflation: Demographic changes can affect interest rates and inflation. A large working-age population may lead to higher demand for credit, potentially resulting in higher interest rates. Conversely, an aging population with reduced demand for credit and increased savings might contribute to lower interest rates.
Long-term Economic Prospects: Demographics also play a role in shaping a country’s long-term economic prospects. For instance, a youthful and educated population may foster innovation and economic dynamism, while an aging population may face workforce shortages and challenges in maintaining economic growth.
Immigration and Globalization: Demographic factors influence migration patterns, which, in turn, can impact the economy and financial markets. Immigration can bring new skills and labor to a country, contributing to economic growth and diversifying consumer preferences.
Understanding demographic trends is crucial for policymakers, businesses, and investors to make informed decisions and prepare for future economic and market developments. By considering the potential impact of demographics, stakeholders can develop strategies that align with the changing needs and demands of the population….(read more)
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Demographics Say Bull Market Could Last Until 2035
The stock market has been experiencing an extended period of growth and prosperity, commonly referred to as a bull market. While market analysts and pundits continue to debate about the sustainability and longevity of this trend, some emerging demographic patterns suggest that this bull market could last until 2035.
Demographics, or the study of population characteristics, play a crucial role in determining market trends and patterns. As the global population continues to grow and age, several factors can positively influence the stock market’s performance in the coming years.
One key demographic trend that supports the idea of an extended bull market is the aging population in many developed countries. As people live longer and healthier lives, they often require increased healthcare services and products. This trend has fueled substantial growth in the healthcare sector and related industries. The demand for pharmaceuticals, medical devices, and other healthcare-related products is likely to continue and drive market returns for years to come.
Furthermore, the aging population also has a significant impact on the financial sector. As individuals retire and move from the accumulation phase to the distribution phase of their life cycle, they often seek reliable income streams and secure investments. This demand for income-generating assets, such as dividend-paying stocks and bonds, can contribute to sustained market growth.
In addition to the aging population, another demographic factor that could extend the bull market is the rise of the middle-class population across the globe. Developing countries, particularly in Asia and Africa, are experiencing rapid economic growth, leading to the emergence of a robust middle-class. This demographic segment often seeks investment opportunities to grow their wealth and secure their financial future. Their increasing participation in financial markets can provide a continuous influx of capital, driving market expansion.
Moreover, technology advancements and increased access to financial markets have allowed individuals, especially the younger generation, to enter the investment landscape more easily. The Millennial and Gen-Z demographics are witnessing a rise in income and wealth, enabling them to invest in stocks, exchange-traded funds (ETFs), and other financial instruments. As these younger investors enter the market and contribute to the overall demand, it can fuel sustained growth in asset prices.
Additionally, technological advancements have paved the way for innovative industries and business models. Disruptive technologies, such as artificial intelligence, cloud computing, and renewable energy, are reshaping various sectors and offering new investment opportunities. These emerging industries have the potential to deliver substantial returns and attract investor interest for years to come.
While these demographic trends suggest a potential bull market until 2035, it is important to note that no market projection is foolproof. Numerous unforeseen events or factors could disrupt or change the trajectory of the market. Therefore, investors should remain vigilant, diversify their portfolios, and closely monitor market conditions.
In conclusion, demographics play a significant role in shaping the trajectory of the stock market. The aging population, rise of the middle-class, increased accessibility to financial markets, and technological advancements are all positive indicators supporting the notion that the bull market could last until 2035. However, it is crucial to approach market predictions with caution and make informed investment decisions. As with any investment, thorough research, risk assessment, and a long-term perspective should guide investment strategies to navigate the ever-changing market landscape.
If you want to know how to position during those sideways orange boxes, take a look at gold during those time frames. A case could be made that you should be in either stocks or gold for years at a time.
total same garbage in 2000 2007 we not in a bear market no 2022 jan we are not in a bear market no we are in a 1989 japan market , get your cash ut now you will not see a new high for 30 years
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Are we experiencing what you said over a shorter time scale? The best place to invest would have been in late 1974, but the bull run did not start until 1982. That's 6 years. Will it be shorter than 6 years? Where are we relative in that 6 years? End?
It's definitely an interesting perspective to be aware of. There are a few key differences between generations, however.
First, a significant portion of wealth among Baby Boomers came in the form of housing appreciation. One could argue that this piled back onto itself through Boomers helping their children buy houses. Now, housing affordability is just below the limits of income. A very different situation from that experienced by Boomers.
Second, population growth throughout the world was climbing much faster between 1980 and 2000 than it is today. Other countries are already experiencing population decline. Last I checked, we are still the beneficiary of immigration, allowing us a very modest 0.6% growth as opposed to the rough 1.5% annual growth of the 90's. To put this in perspective, in 2035, projections indicate a 20 million increase in US population from today. However, this population growth will be offset by the rest of the Boomers aging out of the economy.
There are other factors, of course. Such as the possibility of increased taxes to fix the structural issues within the Social Security system that must be addressed by 2033, among others.
How do you account for the 70s stagflation debt/gdp vs todays stagflation debt/gdp? so is the money supply subsidizing todays' markets?
All this "baby" talk is very distracting. Just "boomer" would suffice.
Fed is still increasing liquidity. That's the stock markets driver.
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What about the fact that the millennials have much less purchasing power than their parents/grandparents? It took a single bread winner to buy a home now takes two.
So the generation between Boomers and Millennials, X had no effect on the markets whatsoever when they were between 25-54? I would like you to do another video and show it.
This is a great video ,I learn a lot watching your videos and it has been helpful to me. Building a steady income is quite difficult for newbies…Thanks to Mrs.Jane Mazzone for improving my portfolio. Keep up with the good videos.
Excellent work! Great analysis of main street and wall street, using both qualitative and quantitative data. Thank you Chris and Kathy for your weekly postings!
This is the best analysis for the bull market
Excellent research and presentation. Thank you.
Another consideration is with skyrocketing obesity rate, a following spike to the mortality rate will soon be expedited. I'm going to overweight (ahem) Healthcare.
I would expect it about time for a significant (10%) pullback before Aug is over…..then bulls resume their climb
Why is yield curve inverted then? Soon debt to will exceed our gdp output. This is an extravagant presentation but not convincing.
Lots of things different this time around.
The best investment one can do right now is investing on Forex trading though stocks are good but ever since I swapped to Forex, I've seen so much difference
Thank u very much.
one things you failed to take into consideration is AI. How many jobs will become obsolete?
I don’t put much weight into historical analogies in the stock market.
The great story of inflation!
Maybe, but no one can predict what's going to happen, especially that far out, making this prognostication pointless.
I think what is missing from this equation, is that in 50-80's you can actually buy a house and have a family. These days even making 250-300k, neither house nor family is affordable anymore. Not even gonna mention the retirement. Peak earnings simply pays rent and 2 holidays a year max, thats all and most people never make even 6 figures. This analysis missed insane asset inflation over past 40 years.
Really interesting analysis, Chris. Been a long-time watcher but this is my first time commenting. 🙂 I'm curious as to why isn't Gen X taken into consideration? Especially when that generation entered its own peak productivity period (ages between 36-54, starting from 2001 to 2016). Digging deeper (and I'm just postulating right here), that it's because Gen X has a lower population count when compared to Boomers and Millennials, hence their impact on the overall economy/stock market is not that consequential. Would that be the case? Love to hear your take on this.
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Is this a repeat of the video from 3 yrs ago ?
Don’t forget the debt is at all time historic peak. Trillions of DEBT in the system.
Your analysis is very interesting, but it would have been far more convincing if you would had incorporated the contribution to the economy of the population every year considering the age pyramid at that time. If, for every year, you would plot the expenses of every population category multiplied by the number of population in that category at that time against the SP500. I would love to see that analysis.