John
12-13-2012, 06:17 PM
Boomers were born from 1946 to 1966. The maximum spending demographic are those aged 46 to 55. They are the big spenders. But when they are from 56 to 66 they are empty-nesters and big savers.
Clearly, boomers are way past the big spending phase since even the oldest boomers are above 50 years of age by 2016.
So we can assume that boomers collectively are well into their big saving mode now, which means house prices go down, vehicle driving goes down, airline flights go down, consumer spending across the board goes down and this continues on and on for the next 40 years at least till 2050 when boomers are 84-104 years old. It's going to make the depression look like a cakewalk.
In order to make up for their lack of preparedness, boomers resort to risky investments such as the stock market. They might even consider themselves great investors, great analysts of the market. The stock market might hold up surprisingly high, because boomers are getting no return on treasuries and bonds.
Perhaps the PE ratio goes up to 20x. Earnings on the S&P500 try to hold at $100. 20 x $100 = 2000 on the S&P 500.
Advice: go long the S&P500 from 700-1000, but don't risk being long above 1500.
Clearly, boomers are way past the big spending phase since even the oldest boomers are above 50 years of age by 2016.
So we can assume that boomers collectively are well into their big saving mode now, which means house prices go down, vehicle driving goes down, airline flights go down, consumer spending across the board goes down and this continues on and on for the next 40 years at least till 2050 when boomers are 84-104 years old. It's going to make the depression look like a cakewalk.
In order to make up for their lack of preparedness, boomers resort to risky investments such as the stock market. They might even consider themselves great investors, great analysts of the market. The stock market might hold up surprisingly high, because boomers are getting no return on treasuries and bonds.
Perhaps the PE ratio goes up to 20x. Earnings on the S&P500 try to hold at $100. 20 x $100 = 2000 on the S&P 500.
Advice: go long the S&P500 from 700-1000, but don't risk being long above 1500.