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Old 08-23-2011, 04:34 AM
 
29,903 posts, read 34,951,892 times
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This has been discussed in various forums before and has been around for quite some time as theoretical projection. It is now becoming time to find out if it will be reality.

Boomer Retirement May Weigh On Stocks For Two Decades: Report

Quote:
The next quarter century or so could be a tough one for the stock market, researchers at the Federal Reserve Bank of San Francisco warn.

In a paper released by the institution Monday, two of its staffers said the retirement of the Baby Boom generation stands to strip away from equities a key source of support. The ongoing wave of retirees won’t crater the market, but they may well be “a factor holding down equity valuations over the next two decades,” writes Zheng Liu and Mark Spiegel write.

As they see it, what the Baby Boomers have given to the market is something like what they will be taking away. Allowing for the “theoretical ambiguities,” the economists noted “U.S. equity values have been closely related to demographic trends in the past half century” across several key metrics. “In the context of the impending retirement of baby boomers over the next two decades, this correlation portends poorly for equity values,” Liu and Spiegel write.
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Old 08-23-2011, 04:47 AM
 
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Plausible.
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Old 08-23-2011, 05:42 AM
 
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Ill guess and say it wont be a factor at all. Baby boomers still need equities to maintain the longevity of their portfolios if they are counting on maximum income.

Baby boomer children will be inheriting a fair amount of wealth from their parents as well.

The big wild card is wealth in emerging nations will more than likely take up any slack .

There are more millionaires in asia now than europe.
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Old 08-23-2011, 02:33 PM
 
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Here's what I think. People are going to look for guarantees. So major money is going to go into Annuities and out of the market. People are going to want lifetime income guarantees.
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Old 08-23-2011, 02:36 PM
 
Location: Los Angeles area
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Quote:
Originally Posted by Caltovegas View Post
Here's what I think. People are going to look for guarantees. So major money is going to go into Annuities and out of the market. People are going to want lifetime income guarantees.
That makes a lot of sense, but don't the insurance companies selling the annuities just plow that money back into investments of various kinds? So (if I am correct) there would be less net transfer "out of the market" than it would first appear.
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Old 08-23-2011, 03:19 PM
 
Location: SW MO
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This and many other discussions makes me very glad we're out of the market for good. We do fine with what we have (pensions and SS) and that's good enough for us. As they supposedly say down under, "No worries, Mate!"
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Old 08-23-2011, 03:20 PM
 
Location: Florida
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There is no absolute out of the market, all investments are reflective of the market, that includes
annuities, as they do not stick the investors money in their mattress, they invest it.
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Old 08-23-2011, 03:22 PM
 
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Yes but Insurance companies are limited on risk with guaranteed products.
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Old 08-23-2011, 04:10 PM
 
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now they are not limited. . in fact in variable annuities you pick the risks you want to take and pick the actual funds you want your money in. many are the same exact funds available to the public directly.
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Old 08-23-2011, 05:25 PM
 
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Quote:
Originally Posted by Caltovegas View Post
Here's what I think. People are going to look for guarantees. So major money is going to go into Annuities and out of the market. People are going to want lifetime income guarantees.
Interesting. We've been talking with financial planners and have had consistent advice that we should get rid of them. In fact we had already decided we wanted to roll them into something else.
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