We are all so focused on the turmoil in the markets now – between Brexit and Trump they don’t seem to know which way is up … literally. But is that the only thing to be concerned about?
A Baby Boomer is someone born in the years following the Second World War, when those who returned from the war had lots of babies. This created a surge in population which was repeated when their children started having children, and so on.
The original Baby Boomer generation has now hit retirement, or is about to, and this generation typically has a lot of investments in the market, either in defined benefit pensions, ISAs or other savings. When they retire, they will want to either spend their savings, gift them to their family during their lifetime or, at the minimum, reduce the risk in their investments by moving away from equities. This means a great deal of money may be about to leave the investment markets and equities in particular.
This is a concern in the UK, and Zurich has recently announced an amendment to their platform to incorporate JISAs and junior retirement accounts to encourage wealth to remain in the markets and on their platform. However, this does not only affect the UK, it is also a global issue; America is bracing itself for healthcare costs to soar as Baby Boomers become seniors and the pressure increases.
There have been multiple baby booms since this first one, but the effects of this one are approaching fast and could see demand in, and therefore the price of, equities especially drop substantially. This is on our radar – if you have investments held elsewhere then make sure it is on their radar too!
If you want to know more about the science behind this kind of thing then look up ‘the Elliott Wave principle’, a theory from the 1930s that discusses repetitive patterns in the stock markets.
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Baby Boomer wave on the horizon
Jasmine is the Managing Director and a Chartered Senior Financial Planner at Redwood Financial. She helps clients manage and grow their wealth and protect their estate. Jasmine also provides expert advice in our FREE Redwood Webinars, where you can learn more about Wills, Trusts and Estate Planning.