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Non-Tech : Invest / LTD

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To: MoneyPenny who wrote (5840)	12/4/1998 10:28:00 PM
From: drsvelte	Read Replies (2) of 14427

Hi Sharon! You and I are the same age and we were the first (and one of the biggest) wave of the BB. But our (when I say "our" I am speaking for the cohort)earnings will likely peak when we hit 60 or so. So the flow of funds into our investments will likely stabilize. I suspect also that many of our cohort will reallocate assets to more fixed-income instruments as they move toward retirement years. So beginning around 2006-2009 (I'm speculating) the flows into the equity markets will decelerate as the leading edge of boomers start to retire and the following waves get smaller and smaller. Thus, the velocity of money into equities will decline. Right now though, there is tremendous inertia of money flow into the stock market. We make fun of the "buy on the dipsters" -- but the money is there and it will continue to pour in UNTIL a shock hits. What and when (or if) will that be -- major earnings disappointments, recognition of globally induced economic slowdown, etc? In a nutshell, we have too much worldwide capacity to produce STUFF. If we cannot gradually absorb that capacity, or if there is a failure in a market that dramatically reduces demand, well, see LT!

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