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Politics : Formerly About Applied Materials
AMAT 256.40+1.2%3:59 PM EST
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To: michael97123 who wrote (47104)5/22/2001 4:19:18 PM
From: Ian@SI  Read Replies (2) of 70976
 
Mike,

I'd suggest that there are 2 types of people:

1. Those that wish to HAVE a few million dollars; and,
2. Those that wish to SPEND several million dollars.

My guess is that those ...who are in over their heads and they will need their 401k money to supplement their social security... are primarily in group 2; and probably don't have sufficient holdings collectively to cause the North American markets to come crashing down to their knees.

And the "great unwashed" probably aren't big equity investors neither.

I just don't see people who've spent their entire lives building a nest egg suddenly reaching a certain age; or retirement; or whatever, then deciding that they must completely change their character and spend everything now.
It just isn't going to happen. Yes, some might, but most won't.

If I remember demographics correctly, the baby boomers are primarily a US / Canada phenomenon. US equity prices are supported, in part, by the deficit. i.e. More than $30B US dollars are spent globally on imports in excess of the value of US$ exports. Each month. That money has to go somewhere. And a good "chunk" of it comes right back into the US as an equity investment. Until the world sees US companies as an unattractive investment, I suspect that growth in equity valuations are relatively safe.

IMHO,
Ian.
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