I was thinking about the the stock market. Now I know NOTHING about the stock market. (That’s not true, but pretend I don’t that way you won’t do anything stupid with what you read below.) But I know a lot about the boomers.
This is a chart of the US birth rate since 1930:
The baby boom peaked around 1956 and pretty much leveled off until 1960 then dropped off. Essentially the “boom” part of the baby boom was over by 1957. It’s that first group, the people born from 1945 to 1956 who lead the wave and affect culture for the rest of us.
I was born in 1963, and the boomers have been ruining things my whole life.
Sexual revolution? Missed it. STDs and the Aids panic pretty much killed that just when things were getting interesting.
Drinking age of 18? Texas raised it to 19 six days before I turned 18.
College degree? Boomer fueled degree inflation made my BA worth about what a HS diploma was in the 50s.
So after a lifetime of watching the boomer generation mess things up, I’ve become a little pessimistic about things vis à vie boomers.
They were the hippies in the sixties.
They were the disco seventies.
They were the “greed is good” eighties.
They were the .com investors that bubbled their way into the .bomb of the late nineties.
They gave us the housing bubble that’s collapsing now.
And they all turn 65 over the next decade.
The unprecedented run up in the value of the stock market over the last several decades pretty much coincides with the boomers having enough money to start investing. What was previously a fairly steady, relatively low growth investment vehicle whose value was based on dividends suddenly had a LOT of money chasing after it. (Kinda like oil these days) Now, the stock market is driven by speculation and irrational valuations.
What happens to the stock market when all those boomers retire and pull all their money out of the market?
What happens to your 401K? (Won’t matter anyway, congress will tax it to pay for the boomers retirement. If you think they’re not already eying that huge chunk of money earning tax free interest then you’re delusional.)
At least the boomers will kill off the idea of Social Security and “retirement” in general. (A bad idea in the first place.)
They’re also funding an explosion in medical research to stave off old age, so I guess the boomer cloud may have a silver lining after all. (But I’m not betting on it.)