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How the baby boomers have blown up the stock market
03-25-2015, 01:36 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Posts: 1,719
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How the baby boomers have blown up the stock market
Not sure I agree with all of his conclusions, but the core principle sounds somewhat plausible - stocks are higher because of demand. When the Boomers really start to retire en masse, we may see a flatline (or decline) in the stock market indices.
Jesse Felder's Tumblr — How the baby boomers have blown up the stock...
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03-25-2015, 01:57 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Pffttt. Blowing up the stock market is just a sideshow. If you want to know what we've really been up to, Google "it's all the baby boomers fault"...
Edit - Hasn't this market theory been hashed, rehashed, and beaten to death over the past couple of decades?
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Numbers is hard
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03-25-2015, 02:04 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Dec 2014
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It is an interesting conclusion, given all the recent articles about how the Boomers have not saved enough. So we Boomers haven’t saved enough, but we have artificially driven up stock prices?
However, I have wondered a similar thing: What will happen to stock prices as Boomers liquidate assets to live in retirement? My unscientific response is: At least some Boomers had DB plans. With DB plans basically extinct for new workers in the private sector, I suspect (hope for?) a much higher participation rate.
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03-25-2015, 02:08 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Dec 2014
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WOW! 226,000 results. I guess I need to start reading to see what else I screwed up.
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If your not living on the edge, you're taking up too much space.
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03-25-2015, 02:11 PM
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#5
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Thinks s/he gets paid by the post
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Quote:
Originally Posted by CardsFan
It is an interesting conclusion, given all the recent articles about how the Boomers have not saved enough. So we Boomers haven’t saved enough, but we have artificially driven up stock prices?
However, I have wondered a similar thing: What will happen to stock prices as Boomers liquidate assets to live in retirement? My unscientific response is: At least some Boomers had DB plans. With DB plans basically extinct for new workers in the private sector, I suspect (hope for?) a much higher participation rate.
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Here's a flip-side way of looking at DB plans. It's quite possible that DB plans will continue supporting the stock market, simply because they have to keep their assets invested so they can grow and make current/future payments to plan participants. Plan participants, in turn, don't have any way to pull their DB stake out of the markets, since they have no independent claim to the DB plan assets (with the only exception being the option to take a lump-sum payment).
Additionally, while Gen X may be smaller than the Boomer generation, Gen X doesn't carry nearly the same load of student loan debt that subsequent generations do. Gen X is also entering its peak earning years, which may provide some additional support to the markets. The real time bomb may be Gen Y and Millenials (are they the same thing?)
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He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
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03-25-2015, 02:51 PM
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#6
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Full time employment: Posting here.
Join Date: Nov 2008
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Remember when all the baby boomers were going to sell their big suburban homes and all move to lofts in the inner cities? You wouldn't be able to give a 3,000 square foot house away for free!
Didn't happen. Isn't going to happen. That's about the same way I see the boomers and the stock market. Boomers all selling their stock at once and crashing the market is about the same concern as selling all their mcmansions at the same time.
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03-25-2015, 02:58 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
we may see a flatline (or decline) in the stock market indices.
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Phooey. For every boomer that sells a share of stock there is a boomer or son-of-a-boomer that is standing in line to purchase it.
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03-25-2015, 03:24 PM
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#8
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Recycles dryer sheets
Join Date: Nov 2013
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I am technically a gen- xer but will retire with the baby boomers so doesn't apply to me but if the stock market drops because of boomers retiring then that reasoning implies there must be lots of good jobs coming available as we retire .This isn't happening.
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03-25-2015, 03:40 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by CardsFan
WOW! 226,000 results. I guess I need to start reading to see what else I screwed up.
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+1
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03-25-2015, 05:56 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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If one really believed that the future is 50% lower, that would be an argument for market timing or maybe call it tactical asset allocation. I'm not saying MT is the right path, but that would seem to be the logical next step if one believed this demographic/equity valuation model was near correct.
There are many ways to a lower market like (1) way up and then a severe break some years from now, (2) steadily down starting from today, (3) 1 step per year up and 2 steps per year down, etc. etc.
Probably this sort of idea as in the article is akin to enjoying a scary horror movie. Personally I don't like horror movies.
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03-25-2015, 06:32 PM
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#11
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Nothing new here. I have been reading about people making this prediction for at least 5 years.
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03-25-2015, 07:15 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by Chuckanut
Nothing new here. I have been reading about people making this prediction for at least 5 years.
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Jeremy Siegel discussed this (the "age wave") in my 2002 edition of Stocks for the Long Run. It was an old topic back then. Don't know what his latest edition of that book says but he felt back then there were some possible mitigating circumstances.
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03-26-2015, 07:35 AM
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#13
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Full time employment: Posting here.
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Quote:
Originally Posted by mickeyd
Phooey. For every boomer that sells a share of stock there is a boomer or son-of-a-boomer that is standing in line to purchase it.
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With what? All the tip money they're making at Starbucks?
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03-26-2015, 07:42 AM
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#14
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Quote:
Originally Posted by kombat
With what? All the tip money they're making at Starbucks?
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My son works at Starbucks. He gets to buy Starbucks shares at a discount and does contribute enough in his 401k to get the full match.
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03-26-2015, 07:48 AM
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#15
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Quote:
Originally Posted by Chuckanut
Nothing new here. I have been reading about people making this prediction for at least 5 years.
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WADR....Why did I just waste four minutes of my life on a sunny, warm Florida day to read this thread?
Doom and gloom of all sizes and shapes never seem to materialize.
Going to the beach now.
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03-26-2015, 07:49 AM
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#16
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Thinks s/he gets paid by the post
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More importantly, do you get free coffee?
__________________
He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
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03-26-2015, 08:20 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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A few months ago the 401K/IRAs were going to break the country with all that money not paying taxes; now, there's an average balance of only $18K. Which is it?
IIRC we just had a notable stock 'blow up' about 6 years ago. Just a memory now, isn't it.
But wait! Didn't those boomers withdraw all their IRAs to keep spending through their unemployment?
Ok, NOW I'm going to the beach.
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03-26-2015, 08:28 AM
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#18
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The boomers will, inevitably, die. The world as they knew it will go poof. Nothing can exist without a boomer in it.
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03-26-2015, 08:45 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by marko
WADR....Why did I just waste four minutes of my life on a sunny, warm Florida day to read this thread?
Doom and gloom of all sizes and shapes never seem to materialize.
Going to the beach now.
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LOL!!!!
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03-26-2015, 08:47 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Inheritances! Those boomers may end up leaving a lot behind in the form of money passed to the next generation which will turn around and madly spend it.
But then again..... maybe they didn't really save enough to leave juicy inheritances.
Not too worried here......
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