To: Sig who wrote (58206 ) 8/14/1998 10:12:00 AM From: Mohan Marette Respond to
<---OT----><-----It's a supply & demand kinda thing---->Supply, Demand & The Stock Market SUSIE GHARIB: What goes up may have a reason for it. So says tonight's commentator, Irving R. Levine, Dean of International Studies at Lynn University and former NBC News Economics correspondent. In the years ahead, the basic economic law of supply & demand could prove to be the stock market's best friend. Lower supply and higher demand would tend to push prices up. The supply of stocks is reduced by the frequent tendency of corporations to buy back their own stocks. In some cases, mergers also reduce supply. But more important is what could happen on the demand side. The nation's 76 million baby boomers are reaching the age of 50 at the rate of one every 8 1/2 seconds. As boomers age, they are investing more for retirement. Boomers have been contributing to the $18 billion and more flowing into mutual funds in some months. Also, Congress may act on legislation to enable investment of some of Social Security's billions in stocks. And consider the outlook for greater Japanese investment. By some estimates, the Japanese hold more than $5 trillion in savings. New rules pending in Japan would facilitate individual investment in U.S. stocks. Of course, many other factors influence stock prices. Earnings, inflation, interest rates, investor psychology, to name a few. But the prospect for increased demand raises enticing possibilities for the market's future. I am Irving R. Levine.
