Market Movements and Generational Mindsets

An article in CFA Institute shares the opinion of Fundstrat Global Advisors co-founder Thomas Lee, CFA, that “major economic shifts occur in tandem with generational milestones.” “Generations drive markets way more than we appreciate,” Lee told an audience at the CFA Institute Equity Research and Valuation Conference last year, noting the following correlations: The demographic peak year of the Greatest Generation was 1930, just after the beginning of the Great Depression. The generation that followed… Read More

Bull Market Can Be Bolstered by Retirement Account Inflow

According to a new book by an MIT economist argues that the efficient market hypothesis is “incomplete and inadequate” when it comes to valuations, says an article appearing last month in Barron’s. In his book, titled Adaptive Market, Financial Evolution at the Speed of Thought, behavioral finance authority Andrew Lo argues that market forces other than investor buying and selling behavior (based on corporate earnings profits) — such as increased demand from retirement funds– can… Read More

Sonders: Don’t Discount The Millennials

Charles Schwab’s Liz Ann Sonders says that, contrary to what some believe, the aging of the Baby Boomer generation doesn’t mean doom for the stock market. Sonders tells Morningstar that the Millennial generation that follows the Boomers is actually larger in terms of numbers, and that its members for the most part weren’t scarred by the “double bubble” period of the last dozen years, tend to be bigger risk takers, and have 401k plans in… Read More

Demographics, Growth, and Stock & Bond Returns

We recently highlighted data about the changing demographic make-up of the U.S., and the issue of what that means for the economy and stock market. Now, a new study shows that it may mean quite a bit — if history repeats itself. The study — “Demographic Changes, Financial Markets, and the Economy” — was performed by Rob Arnott and Denis Chaves of Research Affiliates. Looking at historical data from 175 or so countries (with a… Read More

U.S. to Get Younger — and Older — over Next Decade

In his latest MarketWatch column, Mark Hulbert takes a look at some interesting demographic trends and predictions that could impact stock market moves over the next decade. “For years now, there has been a drumbeat from economists about the increasing proportion of the U.S. population that is in or approaching retirement,” Hulbert writes. And that is indeed a powerful demographic trend. “But the increasing proportion of the population in the below-15 cohort is a powerful… Read More

How the World Might Look in 2050

How will the economic world look in 40 years or so? A new report from banking giant HSBC, entitled “The World in 2050”, takes aim at that question, and comes up with some intriguing answers. According to London’s Telegraph, the report — which is based largely on the theoretical work of Harvard professor Robert Barro — says the U.S. and China will be far ahead of the rest of the world, with Turkey, Egypt, Malaysia,… Read More