A couple of weeks ago, one of my long-time followers, Calvin, emailed me the following: “I have been a follower of yours since the ’90s and I’m a firm believer of demographic trending. Just recently I came across a different twist on this trending in an article written by Alejandra Grindal. She follows the demographic M-Y ratio, which is the proportion of middle-aged individuals (M) to young people (Y). “She makes a bold assumption that middle-aged individuals, as they approach retirement, will divert more towards retirement savings and thus into the stock market via 401Ks, IRAs. I believe, Harry, that you hold the opposite view. Care to comment?” When I saw this, I shook my head in irritation. Not at Calvin. His question is an important one and I thank him for asking it. But at people like Grindal… You see, she’s making the classic argument I get from analysts and economists who apply demographic trends without fully understanding them. “Aging Baby Boomers are going to drive up the stock market as they save for retirement and invest more money in the stocks,” they say. I say: “REALLY!?”
Posted on: Thu, 05 Sep 2013 20:35:06 +0000
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