It's better to be young!
So, yes, demographics matter to equity market returns, as the Japanese have come to realise. The biggest equity buyers are the middle-aged (the 40-49 year olds in particular), and it is no coincidence that the great equity bull market has coincided with the baby boomers going through their middle ages............................
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The biggest equity buyers (the 40-49 year olds) are being outnumbered by the biggest bond buyers (the 60-69 year olds), pushing bond valuations up and equity valuations down. Importantly, that trend is likely to continue until at least the mid-2020s, which raises another question and one that I won’t attempt to answer in this paper. How much of the recent strength in various bond markets should actually be attributed to QE and how much is due to demographic factors? Nobody really knows the answer to that question, but I suspect that the significance of central bank policy has been overestimated.
Niels C. Jensen, From the Absolute Return Letter, one of the best
This is very true, only young people buy stock's but if deposits pay zero, the 60 to 69 would still do deposits???
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