Thursday, February 16, 2012

Bull Market as 55-64 Age Group Doubles?



Financial Planning Article by Tom Steinhert-Threlkeld

Quote by Bill Dwyer of LPL Financial....

"In 1988, there were roughly 22 million Americans between the ages of 55 and 64. Those are the years when the amount of retirement funds in a household expand by 46 percent, Dwyer said.

By 2008, that was up to 33 million Americans and this will peak at 43 million in 2020. That means the numbers of Americans in the key age bracket will be twice as large as in 1988. And … these individuals will have three to four times the assets under their control than their parents did."

As the number of investors in this 55-64 "pre-retirement" age group grows in number, sooner or later, history teaches that a large portion of their funds go into equities.  When demand increases, usually prices rise as well. 

As I have stated previously, it is impossible to tell when sentiment changes from it's present pessimistic bent, but when it does, it is likely markets will be surprisingly strong.  It's looking a bit like the late 1970's, absent the inflation and high interest rates.

This information/opinion is for educational purposes and for the sake of discussion. It is not a sales presentation and not a recommendation or personal investment advice. Opinions provided are exclusively those of Wayne Strout and those quoted, and are not the opinions by any financial institution. All investing involves significant risk of loss and there is no proven method to eliminate that risk. No investment should be made without a complete due diligence process, fundamental analysis and a discussion with your personal financial advisor.

Europe? Maybe price of gasoline/diesel is more important?



Informative articles in Morningstar Advisor about Europe:

http://www.morningstar.com/advisor/morningstar-advisor-magazine.htm

How Europe is Making Its Crisis Worse

Impact on US Economy Will Be Minimal















Bottom line:

Bonds that were once thought as "safe" turned out not to be so safe.  And, with 14% of US GDP related to exports, and 22% of that to Europe--Exports to Europe are 3.1% of US GDP.  A 6% decline in sales to Europe would only be a 0.2 % change in US GDP.

While the market seems focused on Europe--watch out for inflating prices, particularly oil and gasoline.  A big rise in gasoline prices is thought by many to be the spark that led to the 2008 decline. People are better prepared today, but it could have a major impact on economic growth in 2012.

This information/opinion is for educational purposes and for the sake of discussion. It is not a sales presentation and not a recommendation or personal investment advice. Opinions provided are exclusively those of Wayne Strout and those quoted, and are not the opinions by any financial institution. All investing involves significant risk of loss and there is no proven method to eliminate that risk. No investment should be made without a complete due diligence process, fundamental analysis and a discussion with your personal financial advisor