Right now, boomers are preparing for retirement. Most are earning in their peak years or near their peak income levels. They are pumping more money than ever into the market to pay for their retirements.
The ratio of people pulling money out of the market to fund their retirements in comparison with the people putting money into the market to save for their future retirements is better than it will be for at least the next three generations, most likely more.
In the next five to fifteen years, the ratio of people paying into the market to save for their retirements in comparison to the people taking out of the market to pay for their retirements is going to change drastically. The draw on the market will increases drastically over the savings rate to finance retirement. This will be a historical first for the stock market.
2007-10-13 08:13:27 · 5 answers · asked by poet1b 4 in Business & Finance ➔ Investing
The stock market is a reflection of our economy. The stock market will forever go up and down but as it alway has it will continue to go up more times than it will go down. There have always been and will always be historic firsts.
2007-10-13 10:35:46 · answer #1 · answered by Richard Jackel 3 · 0⤊ 0⤋
Leading edge boomers are starting to retire now my little brother did in August at 58 but most of us don't plan to draw down our investments anytime soon. Some will get pensions or have a working spouse or work at another job that has lower stress so we don't need to spend down assets.
While we might take out some the younger generation and younger boomers will be saving like crazy because they will see how good it is to have money so they can retire too. Younger boomers are as young as 45 just hitting peak saving years.
2007-10-13 15:21:35 · answer #2 · answered by shipwreck 7 · 0⤊ 0⤋
In all probability (fingers crossed!) it will have little to no impact...the market is you & I, and it is driven largely by our expectations (tempered, hopefully, with a common sense response to the available information). We ALREADY know the boomers are going to retire, so any impact should already be "priced in"...
My personal expectation is that rather than having a negative impact, a tsunami of retiring boomers will drive the market (at least the Dow) UP....Most of them are smart enough to realize they have not saved enough to live off the income if they put their money in "safe" vehicles like bonds, so they will invest heavily in stocks. But most stocks will be thought too "dangerous", so they bulk of the money will go into the 30 stocks that comprise the Dow Jone Industrial Index. The Dow will go up. I'm guessing 40,000 or so by 2025
(Check back with me in 15 years, I'll buy you a beer if I'm waaay out in left field!)...
2007-10-13 15:44:30 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The baby boomers investment in the market is already at the minimum by now. They've been rotating out of the market and into fixed income investments as they get closer to retirement. As the boomers pass away that money will be inherited by a younger generation who have more time to invest. Some of it will be spent and much of it will go back into the equity markets to start the cycle all over again. The markets are more likely to go up than down in the future as money comes out of fixed incme investments looking for places to invest it. Its the bond markets that could take a hit.
2007-10-13 17:27:21 · answer #4 · answered by jeff410 7 · 1⤊ 1⤋
You have neglected to consider the effect of other countries. Companies traded on the U.S. stock markets (NYSE, Nasdaq, etc.) do business all over the world. China has four times the U.S. population. If they invest in the stock of the companies that employ them, that will have an effect on U.S. stock prices.
2007-10-13 16:07:36 · answer #5 · answered by StephenWeinstein 7 · 0⤊ 0⤋