Your article today reignited a thought about us all getting older. I am a 1957 boomer and a contrarian. So with all this success of the stock market, I see gloom coming. This is especially true when I think of my generation retiring (more importantly, those slightly older than me). Who is going to buy all these shares? My broker says we’ll cross that bridge in ten years, selling before the wave hits. Haven’t other people thought the same thing?” — Steve H

Yes, and it could be a (huge) problem. But as I’ve suggested, 500 million emerging middle-class Asian and Latin American investors could begin to take up the slack.

Also, the “selling wave” will not hit all at once — most people don’t want to “Die Broke,” and so would rather live off income than sell. (Is it possible Yahoo might not only one day make a profit, but even pay a dividend? I frankly doubt it, but others will. Especially once all us voting seniors force Congress to end the double-taxation of dividends.) Too, if they hold on, they avoid capital gains tax. But yes, there would be some selling, and some shifting of assets from stocks to bonds. No question.

Finally, if technology continues to race along, as is likely . . . and we don’t spoil it with shooting wars or trade wars or labor/management wars (and it isn’t spoiled by a plague of natural or manmade environmental disasters) . . . then productivity and prosperity will rise markedly, and THAT could rescue us.

Say cars get 100 miles to the gallon instead of 20 by then, as is very possible. Suddenly, other things being equal, what we spend on gas goes down 80%. That lessens the need to sell stocks to pay Exxon. Certainly the need to sell stocks to pay for long distance phone calls to the grandkids has plummeted in the last 50 years, and will plummet further. The cost of today’s elder-care drugs will be much lower, once patents expire. And so on. (Except, of course, by then we won’t be satisfied with today’s medications — we’ll want tomorrow’s, pricier ones.)

Still and all . . . yes: it’s absolutely an issue. Demographics giveth (as they are these days), and demographics taketh away. Save your money. And not all in stocks selling at 80 times earnings or 25 times sales, either.


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