You read that correctly, get ready for the new Roaring Twenties! That’s not just some pie in the sky prediction from one of those ridiculous newsletters that go on forever, never telling you anything unless you pay a small fortune to subscribe. I’m simply applying economic and demographic trends and the implication for your retirement plan and overall portfolio will be huge.
The aforementioned economic and demographic trends, the same studies that make up Surfing the Retirement Tsunami – Your Guide to Staying Afloat and Retiring Comfortably all point to very good times ahead…once we get passed a little more slogging through the mud.
Things are so slow right now because the 90 million baby-boomers are all past their peak spending years and solidly in their retirement planning or living in mode. When the large majority of the population is in retirement mode, it means that there are fewer buyers of everything: real estate, cars, appliances, etc. The result is slow economic growth, higher budget deficits and a weak currency.
After all, 65 million generation Xers cannot possibly replace the buying power of 90 million baby-boomers!
However, the future is now looking so bright, I have to wear shades. You see, the whole situation will change. Soon, the 65 million Generation Xers start to get chased, by 85 million echo-boomers or Millennials.
At that time, the zoot suit and flapper styles will make their comeback as we will be entering a new Roaring Twenties!
This will bring record growth back to America, as well as the rest of the developed world (sin Japan), sending stock and real estate prices soaring. If we get the same growth as we had as when the baby-boomers were in peak spending mode during the Clinton administration, the Dow could hit 100,000 by 2030. Probably higher.
We just have to get past the next few tough years. I know the stock market has been decent recently, and those with money have prospered. However, the economy cannot explode when the middle class and average wages are still where they were in the 1990’s. This will not improve until at least 2022.
Combine that with the fact that we are way overdue for a normal recession and subsequent bear market, and investors have to be very cautious in this market environment. There are still plenty of opportunities to make money. I just wouldn’t even try without having the proper investment platform that delivers returns, manages risk, and has an asset protection strategy in place. It’s what we do for our clients every day.
If you need help with preparing your retirement master plan, establishing a forward-looking investment tax strategy and or a second opinion on your investment portfolio, just give us a call today.