The Bank for International Settlements (BIS) - the central bankers' central bank - published a report in August 2017 exploring the impact that changing demographics will have on economies around the world over the next couple of decades. Their findings are thought provoking. The BIS Working Paper argues that the demographic developments that have taken place over the last 35 years have driven falling real interest rates, inflation and wages and rising inequality within countries.
The BIS forecasts that these demographic changes are now about to reverse. The labour supply shock has likely ended. World population growth is on the slide, from a healthy +2% per annum to below +1% pa, while population growth in the advanced economies will tip into negative territory by 2040. The working age population is also trending lower.
The impact on stock markets could be dramatic. Baby Boomers are by far the largest cohort of owners of equities in the US. As this cohort of the population reaches retirement age, net buyers of equities will turn into net sellers. Where will the demand come from to replace the wealthiest segment of American society as they sell down their assets to fund their retirement?
At Secure Investments, I advise individual clients on their pension and non-pension fund investment portfolios. To learn more about my Active Asset Allocator and Gold Trader investment strategies, please get in touch at firstname.lastname@example.org or 086 821 5911. If you are reading this via LinkedIn, why not visit Secure Investments and subscribe to get exclusive content for free. No spam, ever. Just great stuff.
The information contained herein should not be taken as an offer of investment advice or encourage the purchase or sale of of any particular security or investment. It is provided for information purposes only. Secure Investments and its content providers makes no representation or warranty of any kind with respect to the services described, analysis or information obtained arising from use of the pages on this website. Information provided is obtained from sources deemed to be reliable and is provided solely on a best efforts basis. Secure Investments and its content providers do not guarantee the completeness or accuracy of such information and do not accept any liability for any loss or damage arising out of negligence or otherwise as a result of use or reliance on this information, whether authorised or not. The use of the website is at the user's sole risk. Not all recommendations are necessarily suitable for all investors and investment policy must be tailored to suit the circumstances of the individual. We recommend that readers consult their professional adviser before acting on any advice or recommendation on this website. The value of any investment may fall as well as rise and you may not recover the full amount originally invested. Past performance or simulated performance is no guarantee of future investment returns. The value of your investment may be subject to exchange rate fluctuations which may have a positive or adverse effect on the price or income or the securities.