When baby boomers retire…

A question from Yahoo! Answers:

Who is going to buy all the equities when the baby boomers retire en masse?

As they start cashing in their 401k’s is the market going to crash? Or will there be sufficiently sustainable demand for equities?

Well, look at the market today. The largest buyers of equities are companies that issued them. Interest rates are still low, so companies borrow to buy stock back… Expect more of the same as baby boomers retire. Retirees will want to move their money away from stocks into bonds; companies will respond by selling them bonds and using the proceeds to buy back stock…

This entry was posted in Answers, Economics. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *