Use Demographics To Front-Run Your Children

We caught an interesting nugget in Tobias Levkovich’s latest marketing presentation for Citi:

Basically, U.S. demographic trends argue for a multi-decade bull run. That’s because the number of people entering the prime savings age of 35 – 39 years will increase well into the future.

While this age bracket is indeed set to dip in the near-term, any stock market correction could be a buying opportunity given the longer-term picture.


Thus buying stocks in 2010 – 2011 might be a way that investors can effectively front-run (legally, of course) the younger generations of today, who we already know will become equity buyers once they hit their wealth accumulation phase.

The beauty of demographics is that once a trend is in place, it’s pretty dependable since we already know how many young people are around today. Just ask China and its one-child policy disaster.

Yet what’s missing from the analysis is a consideration of how today’s retirees may switch out of stocks and into bonds as they exit their wealth accumulation mode and spend for their retirement. Regardless, we have a feeling that the chart above is on to something.

Note that we haven’t presented Mr. Levkovich’s argument here, this was just one small piece of information as part of a recent marketing handout.

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