That makes them 52-57. These folks are seeing retirement just down the road
That's why I think this market has some legs for another couple of years, if not a full decade. They have 10 more years of socking away money in their 401K/IRA before they hit that retirement age. And they have few alternatives that are as liquid as the stock market.
And the sad thing about all of this, is that were most other developing nations NOT so corrupt, people would be investing a portion of their investments in emerging markets funds. But since the risk is so high there, all of that money is staying here at home and exacerbating the valuation of domestic stocks.
Bottom line: There is just no where else on this planet where people have the liquidity and the market confidence
as they do in the the US.
After all, if $10,000 is all you've got in savings (much more than most Americans)you might be inclined to roll the dice and hope for a QUICK x5 or x10 result.
See? There you go with that "no savings" spiel that seems to pervade the bear psyche. It just isn't the case. One has only to look at money market accounts, 401Ks/IRAs, or even real estate investments (as my father has for monthly income).
All of these are savings/investments. Both have risk; cash savings being vulnerable to inflation, and investments being vulnerable to DEFLATION of their asset prices.
But one more point about the boomers. Since they don't have many other places in which to place their retirement money, they will continue investing it in the most liquid markets, namely stocks. Legally, people can put real estate in an IRA, but most managers don't know how to do it, so there isn't any impetus for those kinds of investments. They are pretty much held hostage to the stock market in order to make the kinds of returns they want.
So if they can't make any money in big caps, they may speculate with small caps where the influence of their money flow has a greater impact than trying to push 6 billion shares of MSFT uphill. |
